Going beyond product category-level data

inoqo's climate methodology

Aligned with the 1.5 °C goal

+160
different
crops
+100
processing
processes
+200
territories
around the world
+100K
LCA
datasets

Goal

Problem & Motivation

In the face of the current climate and ecological crises, the F&B retail industry is receiving increasing pressure to demonstrate sustainability in their operations and product offerings. Although more organizations are committing to sustainability targets, e.g. set by the Science Based Targets initiative (SBTi) (Science Based Targets Initiative), the ability to assess the progress is limited by the challenges those organizations face when it comes to tracking the impact of their assortment. For example, assessing the environmental impact down to the ingredient level of each product (i.e. data collection and impact mapping across the whole supply chain) is a complex and resource-intensive task. Currently, most organizations use coarse category-level data which does not allow for monitoring and tracking of carbon emission reductions caused by changes along the supply chain, e.g. exchange of ingredients, their suppliers or production processes involved. inoqo solves that problem by providing a solution that goes beyond product category-level data in a highly scalable manner and with ever-increasing data quality over time.

Solution

The inoqo Product Climate Footprint (PCF) Assessment Solution is the core engine for highly scalable impact calculations. The solution is aimed at (1) large F&B retail customers who aspire to assess, optimize and report the impact of individual products and whole assortments, with the goal of reducing their negative impact over time, as well as (2) on individual consumers who want to compare the carbon footprint of F&B products as they purchase them. The inoqo solution is tailored to meet F&B industry customers where they currently are in terms of data availability. This means that publicly available product information is enough to start estimating the impact of products. The inoqo platform (the data management frontend) is built on top of the backend calculation engine and will support customers to ingest further non-public product information, for the purpose of refining the calculation results, find insights on where the largest optimisation potential can be found and track changes (i.e. impact improvements) overtime. The platform leverages cutting-edge technology including a comprehensive LCI (life cycle inventory) data library to accurately evaluate the sustainability of products in line with the latest scientific advancements. Additionally, the platform can be easily integrated into existing systems and processes, allowing retailers to quickly and efficiently assess the sustainability of their product assortment and make informed decisions to improve their environmental impact and communicate it to the consumer.

Application

The use cases of inoqo's climate assessment solution include both B2C communication, as well as internal communication (e.g. to identify hotspots and optimize the assortment). As both scenarios have different needs and requirements, we aim to prepare the data in two different ways. For B2B reporting, we select secondary data based on publicly available product information that aims to represent the ‘average’ impact estimate of each life cycle stage. Additionally, for B2C communication, we increase this average value by certain percentages for all life cycle stages, based on uncertainty ranges derived from scientific literature (Poore and Nemecek 2018) for individual product groups to account for uncertainty.

Scope

Methodological Standards

The methodological framework for “Climate” is the automated conduction of life cycle assessments (LCA) based on the ISO standards 14040/14044 (International Standards Organization 2006). Additionally, further guidance is taken from the Product Environmental Footprint (PEF) (European Commission 2021), including default data on transport modes and distances, as well as impacts arising from storing the products in distribution. Since the F&B retail industry belongs to the Forest, Land, and Agriculture (FLAG) sector, elements of the GHG Protocol Land Sector and Removals Guidance draft (World Resources Institute and World Business Council for Sustainable Development) have been incorporated, enabling the inoqo platform to report an SBTi proxy value.

Climate Indicator

The assessment focuses on the impact category of climate change, with the metric used being Global Warming Potential over a 100-year time horizon (GWP100). This metric takes into account the radiative forcing effects of GHG (Greenhouse Gas) emissions, over a 100-year time span and provides values that are compared to those of the reference gas CO2. Consequently, the carbon footprint indicator is expressed in terms of kg carbon dioxide equivalents (CO2 eq.).The latest impact assessment methodology provided by the PEF (EF 3.1 Climate change - total)is used to estimate the impact of F&B products on climate change, which in turn is based on the Sixth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC 2021). Among others, this method includes the six Kyoto Protocol greenhouse gases covered in the Corporate Value Chain Standard of the GHG Protocol (Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard: Supplement to the GHG Protocol Corporate Accounting and Reporting Standard ), i.e. carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), perfluorocarbons (PFCs), and hydrofluorocarbons(HFCs).

System Boundaries
The chosen system currently considers impacts from cradle-to-shelf, plus end-of-life (EoL) from transport, packaging and food waste at both the retailer and consumer's home, in line with the GHG Protocol Corporate and Accounting Standard (Greenhouse Gas Protocol: Corporate Value Chain (Scope3) Accounting and Reporting Standard: Supplement to the GHG Protocol Corporate Accounting and Reporting Standard 2011). All life cycle stages (agriculture, processing, packaging, transport, storage, and end-of-life) can be delivered individually, and are even further broken down into substages, allowing for the most granular insights. This allows each customer to assign the individual impact contributors to the specific Scopes, according to the GHG Protocol Corporate Accounting and Reporting Standard.

Reporting Unit
In LCA studies, a prerequisite is to define a functional unit, to which all inputs and outputs of the investigated product system are referenced to and which enables a fair comparison between products. However, the ‘function’ of food is highly debated in the community, since food is multi-functional, since it can provide energy, certain macro or micro nutrients. Consequently, the choice of functional unit can strongly influence the outcome when comparing food products. In absence of a universally agreed functional unit applicable for all food products, inoqo decided to report the calculated results per 1 kg of food product. Consequently, the reporting unit is defined as follows: ‘kg CO2e per kg of product sold at supermarket’. In the future, we might update this to a proper functional unit to reflect the consumer stage (i.e. including cooled storage at the consumer’s home, preparing food by cooking) and nutritional facts of products to provide a fairer metric for product-to-product comparison.

inoqo Impact DB
Unlike other solutions on the market, the choice has been made to create and utilize in-house proprietary LCI database for food products instead of relying on commercial LCI databases. This strategic decision enables us to cover, in a highly consistent and scientific manner, extensive array of crops, livestock, fish, and other non-agricultural raw products covering almost every geographic region worldwide. The inoqo Impact Database comprises data for 10,000+ combinations of agricultural raw products (crops, livestock, seafood) and geographical territories. Together with 100+ localizable food processing processes, the inoqo Impact Database can estimate the impact of a virtually every food ingredient on the planet based on tens of thousands data sets.

Crops
Values for all 160 primary crops found in FAOSTAT (Food and Agriculture Organization of the United Nations 2023) have been generated for nearly 200 territories, resulting in over 9,000country-specific values. This is achieved through a meticulous process involving data from FAOSTAT on yields, production areas, as well as IFASTAT data on fertilizer consumption per crop and country (International Fertilizer Association, n.d.). Moreover, data on the use of irrigation water, agricultural machinery and various other parameters sourced from various scientific literature. GHG-related field emissions, including those from fertilizer application and methane emissions from rice cultivation, are calculated based on the latest IPCC guidelines for national greenhouse gas inventories (Intergovernmental Panel on Climate Change 2019). Additionally, emissions from cropland expansion are calculated following IPCC guidelines for Land Use Change (Intergovernmental Panel on Climate Change 2003) using a statistical approach based on a 20 year time horizon.

Livestock
The livestock datasets cover both meat and milk/eggs from major suppliers to the European region, including cattle, buffaloes, pigs, goats, sheep, and chickens from the major supplying countries to Europe. Utilizing country-specific data from the FAO Global Livestock Environmental Assessment Model (‘GLEAM’) (Food and Agriculture Organization of the United Nations 2018), datasets include emissions from enteric fermentation, manure management, on-farm energy use, feed rations and pasture expansion. We also strive to calculate country-specific values for animal products for the country or retail of a certain client in light of animal products often being consumed locally.

Fish and seafood
For fish, the inoqo platform calculates values for the most relevant fish groups and species, with the distinction between farmed and fished fish, using country-specific values for the largest supplying countries for Europe. Datasets for farmed fish cover emissions arising from aquatic N2O, on-farm energy use and feed rations (MacLeod et al. 2020), while fished fish datasets cover the production, maintenance and diesel use in fishing vessels, as well as fishing nets(Newton et al. 2022). If it cannot be read from the list of ingredients if a fish is farmed or fished, an average of sourcing conditions is taken.

‘Other’ Products
Datasets for crops not explicitly listed in FAOSTAT (e.g. maple sap for the production of maple syrup), crops not produced in agricultural soil (e.g. mushrooms) or animal products not produced from livestock (e.g. honey), as well as non-agricultural food ingredients such as salt, sweeteners, and chemicals, are also added to the inoqo DB. These datasets are based on lifecycle inventories from recent scientific literature. Since these studies usually cover only case studies, geographical coverage for these products may not be as extensive as those for crops, livestock, and fish.

Food Processing Processes
The inoqo Impact Database incorporates approx. 100 different food processing processes. These include the production of vegetable oil, juice, starch, dairy products and many more. Inventory data for food processing processes were collected mainly from scientific literature. Processing datasets are adapted to the respective country of processing by applying its country-specific electricity grid mix.

Allocation Methods
An additional benefit of using a proprietary LCI database is having full control of the applied allocation principles. For the majority of multi-output processes, the preferred choice is economic allocation, using, if available, long-term market prices to share environmental burdens between co-products. To be in line with the GHG Protocol, the EoL allocation is using the ‘cut-off approach’ (i.e. 0% burden/credits for recycling at the EoL or the use of recycled content).

System Boundaries
The following GHG emission sources are considered within the system boundaries of each product system:

Agriculture (inoqo DB)
For crops:

  • Fertilizer production
  • Fertilizer application (both organic and mineral fertilizers)
  • Land use change from cropland expansion
  • Methane emissions from rice cultivation
  • Agricultural machinery production and use
  • (Energy use for) irrigation


For livestock production:

  • Feed production (including all emissions listed above for crops)
  • Enteric fermentation
  • Manure management
  • Land use change from pasture expansion
  • On-farm energy use

Processing (inoqo DB)

  • Electrical and thermal energy
  • Production of auxiliary materials
  • Tap water
  • Wastewater treatment
  • EoL treatment of non-recycled waste

Packaging

  • Extraction and processing of raw materials
  • Energy production on-site and internal waste water treatment of packaging materials
  • In case of composite packaging, only the heavier packaging material is accounted for (e.g.: inner bag for cereals is not accounted for, only cardboard box)
  • Plastics are taken at granulate production level

Transport

  • Emissions from fuel production
  • Fuel consumption by transport vehicle for all transportation stages grouped into the following transport stages:
    • supplier/farm to processing
    • processing to warehouse
    • warehouse to supermarket
  • Emissions from infrastructure use (e.g. vehicle, road)
  • The following aspects of transport are considered:
    • distance per transport mode
    • transportation mode (e.g. truck, ship, plane)

Storage

Emissions are available for warehouse (with the addition of storage at supermarket soon):

  • Emissions from electricity consumption (cooling, freezing)
  • Emissions from natural gas consumption

End-of-Life

Emissions are available for both retail and consumer stage:

  • Food waste (landfill, incineration and composting)
  • Packaging waste (landfill, incineration, and recycling)
  • Transportation to processing facility

Excluded Emission Sources

  • Agricultural field emissions not (e.g. phosphate leaching to water) or not significantly(e.g. pesticides) contributing to GWP100
  • Energy consumption for preparation of food products by consumers
  • Emissions for temperature-controlled transportation, including leakage of refrigerants
  • Country-specific estimates for all transport stages
  • Corporate activities and services (e.g. operations, sales and marketing, business travel)
  • Commute of personnel to and from the farms
  • Housing of personnel
  • Albedo changes due to cultivation of land
  • Forming of primary packaging
  • Secondary and tertiary packaging

Climate Score

inoqo’s climate score for consumer communication is based on upper boundaries regarding climate impacts published in the “Planetary health diet” report (Willet and Rockström 2019).

Scientific Advisory Board

To ensure a high standard of our methodology, our expert team is in contact with a Scientific Advisory Board, as well as LCA consultants and sustainability researchers. These include experts that have worked or are currently working for The Research Institute of Organic Agriculture (Fibl), Colorado State University or unfold consulting OG.

Dr. Thomas Lindenthal

Researcher at BOKU and FIBL
Linkedin

DI Mag. Harald Pilz

LCA Expert
Linkedin

Karin Huber-Heim

Sustainability Expert
Linkedin

Werner Kössler

Sustainability Expert
Linkedin
You asked. We answered.

Frequently asked questions

Everything you need to know about the inoqo's climate methodology.
01. What is a Product Climate Footprint (PCF)?
The Product Climate Footprint (PCF) measures the total greenhouse gas emissions associated with a product throughout its lifecycle, from the sourcing of raw materials to its end-of-life disposal. It is expressed in kilograms of CO2 equivalents per kg of product.
02. Why is PCF important?
Understanding the PCF of products helps identify areas for reducing carbon emissions, enabling more sustainable consumption and production practices. It assists us and our customers in making environmentally informed choices.
03. How is the PCF calculated?
The PCF calculation is based on the life cycle assessment (LCA) methodology, covering all life cycle stages from cradle-to-shelf, including land conversion, agriculture, production, packaging, transport, retail, and waste. The methodology aligns with the Intergovernmental Panel on Climate Change (IPCC) guidelines and considers both direct and indirect emissions.
04. What data sources are used for PCF calculations?
inoqo utilizes a comprehensive proprietary Impact Database, containing over 10,000 country-specific values for various food products, including crops, livestock, and processed food items. This database incorporates scientific research, agricultural practices, and food processing methods from around 200 areas globally.
05. How often is the PCF updated?
The PCF is recalculated on an ongoing basis to reflect the latest scientific findings, updates in databases, changes in product ingredients, or provision of primary data by suppliers. This ensures that the PCF remains current and accurate.
06. Can the PCF of a product change over time?
Yes, the PCF of a product can change due to several factors, including the provision of primary data, changes in ingredients, or updates in impact data and scientific findings. inoqo’s continuous update of its database ensures the PCF reflects the most accurate impact.
07. What are the limitations of the PCF methodology?
The current PCF methodology is aligned with the EU Product Environmental Footprint (PEF) but is not fully PEF compliant. It focuses on climate change impacts, excluding other environmental impacts like eutrophication and water use. Consumer use is not included in the system boundary, and the methodology primarily relies on secondary data.
08. How reliable are the PCF values?
inoqo’s methodology has been critically assessed by a leading LCA consultancy, ensuring that calculations, underlying assumptions, and reporting are justified. The application of a safety margin avoids the presentation of overly positive impacts and encourages suppliers to share more product-specific data.
09. What does the safety margin mean in the PCF score?
The safety margin applied in the PCF score is to prevent greenwashing by not presenting the impact of a product too positively. It encourages food suppliers to provide their primary data, leading to a more accurate and possibly lower PCF score.
10. Why can the PCF results differ from those of similar products?
Several factors contribute to variations in the PCF results for similar products, including:
a) Source of Ingredients: The geographic origin of ingredients can significantly impact the PCF due to differences in agricultural practices, climate, and transportation distances.
b) Production Processes: Variations in manufacturing processes, energy sources, and efficiency can lead to differences in greenhouse gas emissions.
c) Data Sources: The PCF relies on secondary data which can vary in scope and accuracy. inoqo’s methodology uses a comprehensive database that includes scientific research and detailed life cycle assessments (LCAs), which might differ from other databases.
d) Packaging and Transportation: Differences in packaging materials and transportation modes (e.g., air vs. sea freight) can also affect the overall PCF of a product.
e) Safety Margins: The application of safety margins to account for data uncertainties can vary between methodologies, affecting the final PCF score.
11. How are transportation and packaging accounted for in the PCF calculation?
Transportation and packaging are integral parts of the PCF calculation. The methodology considers the emissions associated with transporting raw materials to production sites, from production sites to distribution centers, and from there to retail outlets. It also accounts for the production of packaging materials and the end-of-life treatment of packaging waste. The impacts of transportation modes, distances, and packaging types are included to ensure a comprehensive assessment.
12. How does inoqo ensure the accuracy of the PCF calculations?
inoqo ensures the accuracy of PCF calculations through several measures:
a) Utilizing Reliable Data Sources: The methodology is based on scientific research, authoritative databases, and industry standards.
b) Regular Updates: The inoqo's Impact Database is continuously updated with the latest scientific findings, optimization of data, and incorporation of primary data from suppliers.
c) Critical Assessment: The methodology and its assumptions undergo critical assessments by third-party LCA experts to validate the approach and improve result quality.
d) Transparency: inoqo provides detailed explanations of its calculation processes, system boundaries, and data sources to maintain transparency and credibility.
13. Why do you make your customers' products look worse than they might be by adding a margin of safety?
The inclusion of a safety margin in the Product Climate Footprint (PCF) calculations is a deliberate choice, guided by our commitment to environmental integrity and the promotion of a more sustainable food system. The primary reasons for this approach are twofold:

a) Preventing Overly Optimistic Presentations: By incorporating a safety margin, we aim to avoid presenting the PCF of products in an overly positive light. This practice ensures that we maintain transparency with grocery retail customers, providing them with honest and conservative estimates of the environmental impact of their choices.

b) Driving the Transition to Sustainable Practices: More significantly, the safety margin serves as a powerful incentive for grocery retailers and their suppliers to supply more detailed, primary data over time. Initial calculations might make a lot of products appear to have a higher impact than they actually do. However, this methodology allows customers to still discern between high-impact and low-impact products. Importantly, as producers and their suppliers provide more specific information (such as the country of origin of ingredients), the inoqo platform can reduce the safety margin, thereby refining the PCF to more accurately reflect the product’s true impact.

The vast majority (approximately 80%) of a food product’s impact is determined by agricultural practices—how fertilizers are used, whether rainforests are cleared, or if diesel is extensively used for irrigation. Our goal is to create a strong motivation for examining these practices in detail, fostering a transition to more sustainable methods. This can only be achieved if we have a comprehensive understanding of the current impact, setting a baseline for measurable improvements.

In essence, while our methodology might initially present products as having a higher environmental impact, it is a strategic move designed to achieve a long-term vision. By encouraging the collection and sharing of detailed, primary data, we not only gain a more accurate picture of our products’ impacts but also lay the foundation for genuine, impactful changes across the entire value chain. This approach underlines our commitment to not just measure, but to improve the sustainability of our food systems, aligning with our overarching goal of fostering a healthier planet.
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