SLB: Why Measuring Your Carbon Footprint is Essential

As the push for decarbonisation grows larger, carbon accounting is evolving from a corporate responsibility into a regulatory necessity.

While many companies are familiar with tracking their overall greenhouse gas (GHG) emissions, the practice of calculating product carbon footprints (PCFs) is now gaining more and more traction.

These detailed emissions metrics are fast becoming essential tools in the quest to align with global climate goals and meet increasing regulatory demands from governments and trading blocs.

Dr Kinda Georges-Nachef, an expert in lifecycle assessment and product 'carbon footprinting', is the author of a report by SLB which looks into the growing necessity of this kind of process.

“Measuring your product's carbon footprint is becoming somewhat of a requirement,” she writes.

With stringent regulations and rising consumer expectations, the stakes are higher than ever for companies to track the emissions tied to every stage of a product's lifecycle.​​​​​​

The difference between corporate accounting and product accounting

Corporate carbon accounting and product carbon accounting are often conflated, yet their scope and purpose differ significantly.

“Understanding the nuances between corporate carbon accounting and product carbon footprint (PCF) is essential if you want to build an impactful decarbonisation strategy,” explains Kinda.

Corporate carbon accounting assesses a company's total emissions across three scopes: direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and all other indirect emissions throughout the value chain (Scope 3).

Frameworks such as the GHG Protocol Corporate Standard guide this process, helping companies manage and report emissions at the regulatory level.

However, corporate carbon accounting lacks the granularity required to target emissions reductions at the product level. This is where product carbon accounting steps in.

Governed by standards such as ISO 14067 and the GHG Protocol Product Standard, product carbon accounting examines the entire lifecycle of a specific product, from raw material extraction to disposal.

This approach offers insights into emissions hotspots and opportunities for process-level decarbonisation.

“Product carbon footprints enable companies to assess the environmental impact of individual products,” Kinda says.

“This makes it possible to identify emission reduction opportunities at the product level, something corporate carbon accounting alone cannot achieve.”

The importance of lifecycle assessments

The backbone of product carbon accounting is the lifecycle assessment (LCA), a rigorous methodology for evaluating a product's environmental impact from cradle to grave. Yet, conducting LCAs is far from straightforward.

The process demands extensive data collection across all stages of production, which can be especially challenging for industries with complex supply chains.

To simplify this endeavour, some guidelines focus on cradle-to-gate assessments, measuring emissions up to the point when a product leaves the factory.

While this approach excludes emissions from use and disposal, it serves as a stepping stone toward comprehensive lifecycle accounting.

“Using product carbon accounting, done robustly and methodically, gives tangible ways to reduce footprint. It's great to see this initiative going from strength to strength,” says Karen Spenley, UK Country Manager at Celsius Energy.

In sectors like petrochemicals, industry-specific guidelines are already making strides. The Together for Sustainability (TfS) initiative, supported by companies like BASF, aims to standardize PCF calculations within the sector.

According to Kinda, such efforts are critical to ensuring consistency and comparability across companies.

The regulatory pressures shaping the future

The regulatory landscape is accelerating the adoption of PCFs. In the United States, California's Low Carbon Fuel Standard (LCFS) mandates fuel producers to lower carbon intensity, creating financial incentives tied directly to PCF data.

Likewise, Canada's Low Carbon Fuel Standard and the European Union's Carbon Border Adjustment Mechanism (CBAM) demand detailed emissions reporting for products entering their markets.

CBAM, set to take effect in 2026, will impose taxes on the carbon content of imported goods.

“By 2026, companies importing goods into the EU will need to provide detailed product carbon footprint data,” Kinda says. 

This regulation is expected to reshape global supply chains as companies seek to reduce their emissions to remain competitive.

The competitive advantage of decarbonisation

Beyond regulatory compliance, PCFs offer a strategic edge. By identifying carbon-intensive stages of production, companies can invest in cleaner technologies, cut costs, and enhance operational efficiency.

Lower-carbon products are increasingly sought after by consumers and businesses prioritizing sustainability, enabling companies to differentiate themselves in competitive markets.

SLB's reporting is crucial in demystifying this idea. “This report highlights the growing importance of product carbon footprints (PCFs) alongside corporate accounting,” says Anubhav Shukla, Senior Cost Engineer at SLB.

“With regulations like CBAM and LCFS, PCFs are clearly becoming essential for compliance, competitiveness and meaningful decarbonisation,” he continues.

For many organisations, PCFs also play a critical role in Scope 3 emissions reporting. By choosing suppliers with lower carbon footprints, companies can reduce their upstream emissions and make tangible progress towards sustainability targets.

As Kinda astutely notes: “The twin pressures of regulatory requirements and customer demand mean that lower product carbon footprints are becoming a critical differentiator for companies.”

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