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PEFs - What is it and why do you need it?

What is PEF?

Product Emission Footprints or PEFs are granular carbon emissions data specific to a product SKU manufactured by a company. It could be a integrated chip (IC) that goes into a remote control, an 18-inch wheel that is supplied to a car, a bag of fertilizer, a particular laptop model or a passenger sedan that is assembled in a factory and exported.


Today, most companies not have granular visibility into product level carbon emissions footprint. The few that do have deployed an army of consultants to study their internal processes to document all the inputs, outputs, and energy consumed to estimate the product footprint of a single SKU. Many companies have not

  1. refreshed this data in 5+ years

  2. have not been able to scale it across all operations and factories

  3. confident that the individual numbers are accurate to make operational decisions.


In this context, PEFs become critical. They provide the most granular accurate view about the sustainability operations in a company.


Why is it important?

Companies have set bold goals

Driven by regulations, changing consumer sentiments, and investor pressure, enterprises across the world have set bold long-term sustainability goals and launched short-term actions (e.g., purchasing carbon offsets) to meet these goals.

 

Current sustainability efforts are falling short

Unfortunately, many of current short-term actions will not be sufficient to meet the long-term goals. Therefore, companies need to analyze their operations and supply chain (viz. Scope 3) to identify new operational levers (e.g., better product design) to close the gap.

 

Limited operational visibility

​Companies struggle to get accurate Scope 3 baselines because it is expensive, complex to estimate, and takes specialized resources. As a compromise, companies use industry averages even when these are inconsistent with operational reality.


Additional regulatory pressure

In addition, driven by regulatory reporting requirement, OEMs are required to roll up carbon emissions at the SKU level (PEFs) from their suppliers to report to regulatory authorities. Companies face financial penalties if they fail to do so (e.g., CBAM in Europe) in the near future.

 

Product level data creates visibility and value now

Using Product level emissions foot-prints (PEFs) companies can identify hotspots, initiate action to meet their net-zero goals. They can make correct operational decisions, monitor performance against them. Accurate and timeline reporting also reduces risk of financial penalties (e.g, CBAM) and litigation.


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