Introduction

The product life cycle accounting and reporting standard provides a consistent methodology for quantifying and reporting greenhouse gas (GHG) emissions and removals across a product’s life cycle. It supports decision-making by identifying emission hotspots and opportunities for reduction, aligning with existing GHG Protocol standards and ISO 14040/44.

Defining business goals

The standard supports a range of goals, including climate change mitigation, performance tracking, supplier engagement, and product differentiation. Companies can use inventories to identify cost-saving and reduction opportunities. For example, Swire Beverages reduced life cycle emissions of bottled water by 11% through packaging redesign, and achieved a 5–16% reduction via efficient refrigeration upgrades.

Summary of steps and requirements

The standard outlines 13 steps, from defining business goals to setting reduction targets. Requirements include applying five accounting principles, defining product scope, ensuring transparency in boundaries and data collection, calculating inventory results using GWP factors, and reporting with clarity.

Principles of product life cycle GHG accounting and reporting

The five principles—relevance, completeness, consistency, transparency, and accuracy—underpin the entire inventory process. These ensure credible, comparable, and decision-useful data across time and between organisations.

Fundamentals of product life cycle GHG accounting

The standard follows the attributional approach, attributing emissions to specific product flows. It aligns with ISO LCA standards and focuses solely on climate change impacts, not broader environmental indicators.

Establishing the scope of a product inventory

Inventories must include all applicable GHGs (e.g., CO₂, CH₄, N₂O, SF₆, PFCs, HFCs), with justification for any exclusions. Companies must define the product, unit of analysis (functional unit or reference flow), and reference flow, ensuring alignment with business objectives and product type.

Boundary setting

Inventories should be cradle-to-grave, unless justified as cradle-to-gate. Companies must include all attributable processes, disclose exclusions, and provide a process map. Life cycle stages typically include material acquisition, production, distribution, use, and end-of-life. Non-attributable processes may be included if relevant.

Collecting data and assessing data quality

Primary data is required for processes under a company’s control; secondary data may be used elsewhere. Companies must assess data quality across five indicators: technological, geographical, temporal, completeness, and reliability. Data gaps must be filled with proxies or estimates and disclosed.

Allocation

Where multiple products share processes, emissions should be allocated using process subdivision, functional unit redefinition, or system expansion. If unavoidable, allocation must reflect physical relationships; otherwise, economic or justified alternatives may be used. Recycling scenarios use either the recycled content method or closed-loop approximation, with emissions from displaced virgin material reported separately.

Assessing uncertainty

Companies must provide a qualitative statement of uncertainties and methodological choices. Types include parameter, scenario, and model uncertainty. Scenario analysis (e.g., sensitivity testing) is recommended for understanding the impact of assumptions on results.

Calculating inventory results

All emissions and removals must be reported in CO₂-equivalent (CO₂e) using 100-year GWP values. Results should be broken down by life cycle stage and type (biogenic, non-biogenic, and land-use change). Offsets and avoided emissions are excluded.

Assurance

Organisations may seek limited or reasonable assurance, internally or externally. Assurance reports must disclose scope, provider competence, and any conflicts of interest.

Reporting

Reporting must include scope, methodology, exclusions, data sources, uncertainty, and assurance details. Product comparison is not supported unless governed by a product rule with harmonised methods.

Setting reduction targets and tracking inventory changes

While optional, companies setting targets must establish a base inventory, track changes using consistent units of analysis, and disclose methodological updates. All significant changes must be justified and clearly reported.