Introduction

This report by the World Resources Institute provides a framework for assessing the greenhouse gas (GHG) impacts of products, both positive and negative, compared to a baseline scenario where the product does not exist. It responds to increased corporate interest in understanding how products influence emissions outcomes and outlines how such assessments can inform product development, investment decisions, and climate strategies.

To limit global warming below 1.5–2°C, emissions must decline by 20–45% from 2010 levels by 2030. The private sector is expected to contribute through energy-efficient and low-carbon products. Two accounting approaches are identified: attributional, which compares life-cycle emissions between products; and consequential, which measures system-wide changes caused by a decision or intervention. Most companies rely on attributional methods, although consequential methods are recommended for decision-making.

Core terms in estimating comparative impacts

Key terms include: Assessed product (subject of the impact estimate), reference product (the comparator), functional unit (common basis for comparison), and comparative impact (net emissions change). Attributional methods quantify absolute emissions for comparison, while consequential methods assess marginal system-wide effects.

Setting targets for comparative impacts

Companies have used comparative assessments to set four types of targets: Absolute (e.g., reduce emissions by X tonnes), ratio (e.g., avoided emissions are five times operational emissions), revenue-based (e.g., increase revenue from low-carbon products), and product development targets. At least 30 companies were found to have such targets active between 2014 and 2016.

While these targets can drive low-carbon innovation, their credibility is often reduced by the omission of negative impacts and outdated baseline comparisons (e.g., using data from 2001–2005). The report recommends ratio targets only when comparative and corporate emissions inventories are comprehensive and based on a consequential approach.

Accounting issues and recommendations

The report identifies key issues impacting credibility: Setting baselines, defining system boundaries, handling data quality, and avoiding selective reporting.

• For baselines, the recommendation is to choose a reference product that reflects what would likely be purchased in the absence of the assessed product. For long-lived products, future regulatory and market changes should be considered.
• When defining system boundaries, all life-cycle stages should be included where possible. Rebound and extra-boundary effects should be acknowledged, especially for consequential assessments.
• Data quality issues are addressed by recommending uncertainty analyses, sensitivity testing of key assumptions, and using the most conservative scenarios where baseline options are equally likely. Companies should collect primary data where available and evaluate data representativeness, reliability, and completeness.
• For attribution, companies should disclose that the total comparative impact reflects the collective value chain and agree on percentage shares with partners when allocating impact.
• When scaling to market size, attributional methods may overstate positive impacts if they do not account for market growth versus market share shifts. Consequential methods are better suited for this.
• To avoid cherry-picking, companies should explain why certain products were selected and disclose what portion of the total portfolio they represent. For portfolio-level aggregation, any extrapolation techniques and data limitations must be clearly described.

Summary and conclusions

While comparative assessments offer value for informing product development and climate-related decisions, there is high variability in current practices. The report concludes that consequential approaches offer more complete and policy-relevant estimates, though data constraints currently limit their broad adoption. Increased investment in data and transparent disclosure of methodologies is necessary to improve credibility and utility of comparative impact reporting.