In the face of the global climate crisis, businesses and organisations worldwide are seeking ways to measure, manage, and reduce their carbon footprint. The PACT (Partnership for Carbon Transparency) Ecosystem has emerged as a groundbreaking solution to streamline the exchange of Product Carbon Footprint data across supply chains. In this post, we'll dive into what the PACT Ecosystem is and why it matters for companies striving to achieve their sustainability goals.
A life cycle product carbon footprint measures the total greenhouse gas emissions generated by a product, from extraction of raw materials, to end-of-life. It is measured in carbon dioxide equivalents (CO2e)
What is PACT?
PACT or the Partnership for Carbon Transparency is a group of organisations belonging to the WBCSD that came together in 2020 to find a solution to the challenge of accurately measuring and creating transparency in Scope 3 emissions.
What organisations are members of PACT?
Members of PACT cross industries and sectors, and represent organisations covering a wide range of supply chain partners.
- Initiatives such as the WEF and SME Climate Hub.
- Standards and Guidance like the GHG Protocol and EPD
- Targets and Disclosure Programs like Ecovadis, CDP
- Industry Initiatives: TfS, SFC, Catena-X, Digital Catapult
- Auditors: Deloitte, KPMG
- Data Providers: Ecoinvent, PRe Sustainability
- Solution Providers such as ZeroTwentyFifty
- Various Industries and Sectors:some text
- Health: Bayer, Novartis
- Automotive: Continental AG, Michelin
- Food and Tobacco: Nestle SA
- Energy: Chevron, Shell
- Chemicals: BASF, Dow
- Industrial: ABB, Schneider Electric
- Personal Goods: Unilever, Colgate-Palmolive Company, The Proctor & Gamble Company
- Basic Resources: ArcelorMittal
- Real Estate: Swire Properties
- Technology: Fujitsu, IBM, Microsoft, SAP, Siemens
- Utilities: Veolia
- Consultancies: Quantis
Who runs PACT?
PACT is run by the World Business Council for Sustainable Development (WBCSD), who, along with the World Resources Institute (WRI), are the co-convenors of the Greenhouse Gas Protocol (GHG Protocol), a leading Carbon Accounting standard that was created in 1998 and has served as a de-facto standard ever since. With this experience and knowledge, PACT is acting as the convenor of a wide and engaged community working in collaboration to establish a robust, applicable and scalable approach to PCF calculation & exchange.
Why does PACT exist?
PACT exists in order to chaperone and manage the intensive process of engaging with a wide range of industry partners and initiatives, guiding the progress of the Methodology Working Group and Technology Working Group in order to drive the exchange, alignment and integration of product-level carbon emissions and shape a global standard for Product Carbon Footprints. If you’d like to understand more about how this process works, check out PACT’s Governance page.
What is the PACT Ecosystem?
The difference between PACT and the PACT Ecosystem
- Includes all the additional organisations that aren’t exact industry players or companies, they may not directly exchange product carbon footprints but they definitely have an interest in the results produced by this activity.
- Consider that the ecosystem is all the different and varying organisations that may be involved or have an interest in PACT formatted PCFs, the Network being the various organisations involved in the actual exchange and calculation of the PCFs and then the Data Exchange Protocol being the facilitator of the data exchange and the protocol that makes it all happen. The ecosystem cannot effect change on decarbonisation without a network of organisations hosting software and systems for the exchange and calculation of PCFs, and that exchange cannot happen without the Data Exchange Protocol.
- The PACT Ecosystem should be considered as all organisations that are involved in some way with the exchange of Product Carbon Footprints for the purposes of developing the PACT Network further, the ecosystem however may contain organisations that are not PACT members, for example ZeroTwentyFifty, we are not PACT members, but we offer PACT Conformant software and solutions for organisations that have an interest in PACT. A defining characteristic of being a PACT member is that they are involved directly in the definition and development of the PACT Methodology, providing their experience and scale to inform the future and progress of a working model for the exchange of Product Carbon Footprints. All the organisations that are PACT conformant, or that exchange PACT Conformant data.
The PACT Ecosystem can be considered as the wider community that is interested in the downstream effects of PACT itself, so through the process of the Technical Working Group and Methodology Working Group, there are effects that trickle down through the system to other organisations that can then use the PCFs produced.
The PACT Ecosystem can be considered more broadly as the wider community of organisations that have an interest in the exchange of standardised, reliable, and transparent product carbon footprint data. It consists of three key components:
- The PACT Methodology: A set of guidelines and standards for measuring, calculating, and reporting product carbon footprints consistently across industries.
- The PACT Network: A collaborative network of companies, organisations, and stakeholders committed to advancing carbon transparency and data exchange.
- The PACT Data Exchange Protocol: A standardised method for sharing product carbon footprint data securely and efficiently between supply chain partners.
Examples of members of the PACT Ecosystem:
The PACT Ecosystem can be considered far more broadly than PACT itself and its members, for example, ZeroTwentyFifty is not currently a member of PACT itself, however, we are part of the PACT Ecosystem through our product, solutions and service offerings that aim to assist organisations looking to utilise Product Carbon Footprints within their supply chain and decarbonisation efforts. Furthermore, we intend to support the ecosystem through best in class Open Source solutions that enable organisations wishing to onboard or utilise the massive benefits of the PACT Methodology and Network a frictionless transition to being part of the future of product-level carbon accounting.
The PACT Ecosystem is a comprehensive framework and network designed to facilitate the exchange of standardised, reliable, and transparent product carbon footprint data. It consists of three key components:
The PACT Ecosystem is a range of organisations and initiatives that have an interest or need for the data provided by PACT.
What is the PACT Methodology?
The PACT Methodology: A set of guidelines and standards for measuring, calculating, and reporting product carbon footprints consistently across industries.
What is the PACT Network?
The PACT Network: A collaborative network of companies, organisations, and stakeholders committed to advancing carbon transparency and data exchange.
What is the PACT Data Exchange Protocol?
The PACT Data Exchange Protocol
The PACT Data Exchange Protocol: A standardised method for sharing product carbon footprint data securely and efficiently between supply chain partners.
Why the PACT Ecosystem Matters:
Enables Scope 3 Emissions Management
"Accurately quantifying and reducing emissions, particularly those in value chains (Scope 3), are key enablers for changing the global warming trajectory and avoiding the worst effects of climate change." (PACT Methodology 2.0)
Managing Scope 3 emissions is crucial for businesses to achieve comprehensive sustainability targets. The PACT Methodology provides standardised methods that make this complex task more manageable and verifiable.
CDP's 2021 Global Supply Chain Report highlights the importance of transparency to drive transformation in managing these emissions
Enhances Supply Chain Collaboration
The creation of a free and open digital network will significantly facilitate data exchange (upstream to downstream, but also downstream to upstream) and strengthen quality and credibility.
This open exchange not only promotes transparency but also fosters trust among all stakeholders in the supply chain, paving the way for more effective sustainability strategies and initiatives.
As noted by the World Business Council for Sustainable Development in their discussions on collaborative approaches.
Supports Decarbonisation Efforts
By enabling access to reliable and transparent product carbon footprint data, companies can make informed decisions to reduce their environmental impact and support the transition to a low-carbon economy.
"It is important to emphasize that the goal to accelerate decarbonisation of value chains cannot be solved by individual actors in isolation. It requires an aligned, coordinated, and open approach, driven jointly by stakeholders across all industries and value chains, including SMEs. Radical collaboration is key." (PACT Methodology 2.0)
McKinsey & Company discuss the increasing demand for sustainable products and how companies are adapting to meet these needs in their latest insights.
Facilitates Compliance and Reporting
Aligning with emerging regulations is critical as companies globally are required to disclose more detailed and standardised climate-related information. This compliance not only meets regulatory demands but also helps companies stay ahead by managing risks and capitalising on opportunities related to climate change.
"The PACT Methodology builds on the longstanding work with the World Resources Institute under the GHG Protocol to take a cross-sectoral approach to help organisations develop and exchange primary data-based product carbon footprints (PCFs) across the value chain. The requirements captured in it seek to further enhance data reliability and consistency across industries and value chains, for instance via the inclusion of a verification and assurance roadmap."
The Securities and Exchange Commission (SEC) in the United States has recently adopted rules to enhance and standardise climate-related disclosures by public companies, which underscores the global momentum towards more consistent and transparent reporting frameworks. This includes the disclosure of material climate-related risks and their impact on business strategy, as well as governance and risk management processes related to climate change). In Europe, the Corporate Sustainability Reporting Directive (CSRD) will require large companies to report their impacts on people and the planet, increasing the transparency of non-financial disclosures.
The Role of ZeroTwentyFifty:
At ZeroTwentyFifty, we are proud to be part of the PACT Ecosystem. Our software solutions are designed to help companies seamlessly integrate with the PACT Network Data Exchange Protocol, enabling them to efficiently measure, manage, and exchange product carbon footprint data. With our expertise in Scope 3 emissions management and our commitment to advancing carbon transparency, we are well-equipped to support businesses in navigating this critical aspect of their sustainability journey.
The PACT Ecosystem represents a significant step forward in the global effort to combat climate change by promoting carbon transparency and collaboration across supply chains. By understanding and engaging with this ecosystem, companies can unlock new opportunities to drive decarbonisation, meet stakeholder expectations, and contribute to a more sustainable future. Stay tuned for future posts, where we'll dive deeper into the components of the PACT Ecosystem and explore how ZeroTwentyFifty's solutions can help your business thrive in this new era of carbon transparency.
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