Green x Digital Consortium
CO2 Visualization Framework
Edition 2.0

July 29, 2024

Green x Digital Consortium
Methodology Sub-Working Group

Revision history
EditionDate

1.0

June 30, 2023

New

July 23, 2024

Updates to Edition 1① Updates based on the results of the joint POC experiment conducted from 2022 to June 2023
② Updates to accommodate revisions from Version 1 to Version 2 of the Pathfinder Framework③ Additions concerning the relationship to the Carbon Footprint Guidelines and Carbon Footprints Practical Guide issued by the Japanese government

2.0

Changes2

Contents
1. Introduction

Appendices1-1 What is the CO2 Visualization Framework?

Appendix 1 Glossary

1-2 Background and purpose

Appendix 2 Alignment with METI/MoE Carbon Footprint
Guidelines
Appendix 3 Contributions to the writing of this document

1-3 Scope of this document
1-4 Ideal form and direction of realization
1-5 CO2 visualization roadmap
2. CO2 data calculation methods
2-1 Two methods of calculating CO2 data
2-2 Product-based calculation method
2-3 Organization-based calculation method
3. CO2 data sharing method
3-1 CO2 data sharing concept
3-2 Data disclosure elements
4. Verification of CO2 data
4-1 Verification of CO2 data
4-2 Verification of Product-based CO2 data
4-3 Verification of organization-based CO2 data3

1. Introduction•••

This chapter presents how the Green x Digital Consortium aims to visualize CO2.
To the greatest extent possible, we have left a record of the various discussions on CO2 visualization conducted in the
Methodology SWG to serve as a baseline to which we can return in future. As a result, a lot of conceptual discussion is also
recorded.
Readers who are interested in practical methods for calculating and disclosing CO2 data may simply skim this chapter and proceed
to Chapters 2, 3, and 4.

1-1. What is the CO2 Visualization Framework?

What is the CO2 Visualization Framework
1-1. What is the CO2 Visualization Framework?
Green x Digital
Consortium

1-1-1. Positioning of the CO2 Visualization Framework•

The Green x Digital Consortium CO2 Visualization Framework (below,
this document) is a framework document for CO2 visualization
published by the Green x Digital Consortium.

•

It was created by the Methodology Sub-Working Group (SWG), a
sub-group of the Green x Digital Consortium’s Visualization Working
Group (WG).

‒ The Visualization WG aims to use digital technology to achieve
visualization of CO2 data throughout the entire supply chain andto establish a mechanism to appropriately reflect CO2 reduction
efforts in data.
‒ The SWG is in charge of examining methods for calculating CO2
data that are shared throughout the supply chain using digitaltechnology, as well as elements to be disclosed when data isshared.
••This document presents (1) methods of calculating CO2 data to beexchanged throughout the supply chain using digital technology, and(2) sharing methods (data quality disclosure methods). (The use ofdigital technology will be discussed in the Data Format andExchange SWG.)
In addition, this document outlines the basic concepts in relation to
the CO2 data calculation method for transportation and logistics but
leaves more detailed explanations to the guidance developed
separately by the Logistics SWG.

Visualization WG

Methodology SWG
Consider CO2 data
calculation andsharing methods, etc.

Data Format andExchange SWG

Logistics SWG

Consider data exchange
formats and exchange
methods using digitaltechnologies

Consider methods forcalculating CO2
emissions fromtransport and logistics(This document)
CO2 Visualization Framework Edition 2.0
Presents calculation methods and data quality disclosure methods for CO2
data exchanged throughout the entire supply chain using digital technologies.
(Only basic concepts are presented in relation to the calculation of CO2 data
for transportation and logistics.)
Figure 1-1-1 Positioning of the Methodology SWG and this document5

1-1. What is the CO2 Visualization Framework?

Creating a connected world
◼
◼

◼
◼

The aims of the Green x Digital Consortium’s Data Visualization Project are to use digital technology to visualize CO2 data throughout the entire supply chain and tobuild a mechanism that appropriately reflects CO2 reduction efforts in data.
In this system, the data collection, calculation, and sharing solutions used by each company in the supply chain are connected by the solutions used by the othercompanies in the same chain so as to facilitate data exchange between companies. Each company's CO2 data is calculated in a way that reflects the company's
actual emissions and reduction efforts based on common data collection and calculation methodologies and is shared through a unified data format.
Companies downstream in the supply chain will be able to measure and monitor Scope 3 emissions while reflecting the emissions status and reduction efforts ofsuppliers.
This data exchange can also be interlinked with major global frameworks and platforms, ensuring that the CO2 reduction efforts of Japanese companies receive
proper recognition overseas.

Figure 1-1-2 The connected world sought by the Visualization WG

Source: NEC6

1-1. What is the CO2 Visualization Framework?

Authors and document preparation steps
1-1-2. Authors of this document••

1-1-3. Steps involved in preparing this document

The authors of this document are shown in Figure 1-1-3. The
leader and sub-leaders of the Methodology SWG were the main
authors, with other SWG members cooperating in the study andoffering their opinions.

•

The Methodology SWG developed this document through thefollowing steps.
Date

The contributions of each company in the preparation of thisdocument are described separately at the end of this document.

1

2022
April 19

Mizuho Research and Technologies

2

May 10

NTT Data, Brother Industries

3

June 7

4

July 12

5

Aug. 96

Sept. 2072023
June 28

8

Aug. 1

9Aug. 22

LeaderSub-leaders

SWG Members

IHI,Asuene, Amazon Web Services Japan,
NTT DATA, Omron,Kajima, Canon, Sustech,
Sumitomo Electric Industries, Zero Board, TÜV SÜD
Japan,Deloitte Tohmatsu Consulting, Toshiba,
Nagase Sangyo, Nitto Denko Corporation, NEC,
Nomura Research Institute, Panasonic Pendingings,
Hitachi, PwC Advisory, PwC Consulting, Forval,
Fujitsu, Brother Industries, Mizuho Research &Technology, Mitsui, Mitsubishi Electric, Murata
Manufacturing, Yokogawa Electric

10 Nov. 15*
11

Figure 1-1-3 Document authors and co-authors

2024
Jan. 24

Issues andrequirements• Presentation of eachcompany’s issues• Summary of issues ininitial report• Summary of issues• Handling of indirect
sectors• Verification• Treatment ofcomparability• Document positioning• Identify issues toward
developing Edition 2• Discuss issues toward
developing Edition 2• Discuss issues toward
developing Edition 2

Investigation of existing
methodologies

Document preparation• Identification of existing
methodologies to beinvestigated• Preliminary methodology
investigation results (1)• Preliminary methodology
investigation results (2)• Preliminary methodology
investigation results (3)• Table of contents organization,
identification of proposed
elements• Preparation and presentation ofdraft plan aiming at completionby 1/3• Preparation and presentation ofdraft plan aiming at completionby 2/3• Draft presentation(for comment)• Revision based on comments
received, presentation of revised
draft• Presentation of first draft ofEdition 2• Presentation of second draft ofEdition 2• Presentation of third draft ofEdition 2• Presentation of final draft ofEdition 2

Figure 1-1-4 Steps involved in preparing this document* November 15: Report at Visualization WG

7

1-1. What is the CO2 Visualization Framework?

Envisaged users
1-1-4. Envisaged users•

Edition 1 of this document was intended for use by companies
participating in the Green x Digital Consortium PoC project*conducted in FY2022 and FY2023.

•

Edition 2 has been updated based on the results of the PoC projectand is expected to be widely used by members of the Green x
Digital Consortium as well as the general public.

•

Parties

Suppliers
Data sharing(providing andreceiving data)

CO2 data
calculation

The envisaged users of Edition 2 are:BuyersUse in Scope 3
calculations‒ Suppliers that calculate and share (provide) CO2 data
‒ Buyers that share (receive) and utilize CO2 data
Calculation
support‒ Solution providers supporting the calculation, sharing andutilization of CO2 data
‒ Consultant firms supporting the calculation, sharing andutilization of CO2 data

Support

Sharing
supportCalculation
supportSolution providers/Consultants‒ Assurance and verification bodies that verify and assure theresults of CO2 data calculation and utilization
Assurance andverification•

Figure 1-1-5 shows the relationships between suppliers and buyers
who calculate, share, and utilize CO2 data, the consultants andsolution providers that support them, and assurance and verification
bodies that assure and verify data reliability.
*For details, see the final report released in August 2023
(https://www.gxdc.jp/pdf/report02.pdf)

Assuranceandverification

Assurance andverification

Auditors and verification bodies, etc.
Figure 1-1-5 Envisaged users of this document8

1-1. What is the CO2 Visualization Framework?

Notes regarding CO2 data
1-1-5. Notes about the term “CO2 data"•

Unless otherwise specified, the definition of the term “CO2 data” isas follows:

CO2 data‒ The CO2 equivalent (expressed as kg-CO2e, etc.) of greenhousegas emissions (GHG emissions) specified by the IPCC (i.e., notlimited to CO2 emissions alone)

Term used in this document

Note 1‒ It assumes a lifecycle boundary for cradle-to-gate emissions
calculations, covering emissions right up to the top of the supply
chain in addition to a company’s own processes.
(The reason for adopting the cradle-to-gate method will be
explained later in 1-4-6.)

Refers to the CO2 equivalent (kg-CO2e) of greenhousegases (GHG) as defined by the IPCC•

In other words, “CO2 data” in this document corresponds tonumerical information called “cradle-to-gate GHG emissions” in theworlds of LCA (Life Cycle Assessment) and CFP (Carbon Footprint of
Products).

Lifecycle boundary for calculating emissions = cradleto-gate•

The term “CO2 data” is used in this document because:

Intention of use‒ The terms “CO2 visualization” and “supply chain CO2 visualization”
are familiar to Japanese industry; and‒ The addition of “data” captures the emphasis of the Green x Digital
Consortium on the use of digital technology.

Note 2•

To communicate the aim of the document to users
based on the expression “CO2 visualization,” which
is familiar to Japanese industry•

To capture the Consortium’s emphasis on theutilization of digital technology through theaddition of the term “data”

Figure 1-1-6 Notes and intention in using the term “CO2 data”

91-2. Background and objectives

Background (1) Supply chain CO2 visualization progress and limitations
1-2. Background and objectives

supply of unit quantities of procured products (raw materials, parts,etc.), prepared from secondary data such as industry averages andmodel estimates.

1-2-1. Background: (1) Supply chain CO2 visualization progress
and limitations•

In recent years, it has become common in Japan to comply with the
GHG Protocol in the calculation and reporting of companies’ GHG
emissions.

•

The GHG Protocol is an initiative to develop standards for the
calculation and reporting of GHG emissions, co-sponsored by theWorld Resources Institute (WRI) and the World Business Council for
Sustainable Development (WBCSD). In addition, the standards
developed are often referred to as “GHG protocols.”

•

•

•
•

The GHG Protocol has long been treated as a de facto standard, but
in practice it was mainly applied by global companies. Recently,
however, international information disclosure frameworks such as
the TCFD and the ISSB standards (IFRS S2) have required emissions
to be calculated in line with the GHG Protocol, prompting a rapid
increase in the number of companies aiming to apply thesestandards.
The GHG Protocol introduces Scope 1, 2 and 3 categories into thecalculation and reporting of corporate GHG emissions. Scope 3
covers emissions from other companies related to corporate
activities and includes companies’ procurement networks (supply
chains) (Figure 1-2-1).
However, because supply chains comprise a chain of the activities ofmany supplier companies, GHG emissions are not easily calculated.
As a result, secondary data emission factors became themainstream in the calculation of Scope 3 emissions. These describe
the amount of GHG emissions associated with the manufacture and•In practical terms, the supply chain emissions of procured products
were calculated by multiplying the company's own activities(procurement volume, etc.) by the secondary data emission factors,
utilizing LCA databases such as IDEA, eco-invent, and Gabi as data
sources.

•

Today, many more companies are calculating supply chain GHG
emissions as part of their Scope 3 emissions calculations.

•However, there is growing recognition of the limitations of thecurrent mainstream calculation method using econdary data
emission factors, namely, that because it does not use suppliers’
actual GHG emissions (primary data), it fails to take into accountsuppliers’ emissions reduction efforts.
Own company

Upstream

Downstream

Raw materials
CommutingTransport and delivery* Other Scope 3 categories : ②,③,⑤,⑥,⑧

Use of products
Fuel combustion

Electricity

Disposal of
products* Other Scope 3 categories : ⑨,⑩,⑬,⑭,⑮

Numbers in circles indicate Scope 3 categories.

Scope1：Direct emissions of greenhouse gases by business (Fuel combustion and industrial processes)
Scope2： Indirect emissions from the use of electricity, heat and steam supplied by other companies
Scope3： Indirect emissions other than Scope 1 and Scope 2 (emissions by other companies related tobusiness activities)

Figure 1-2-1 Introduction of Scope 1, 2 and 3 under the GHG Protocol
Source: Ministry of the Environment and Mizuho Research & Technologies"Towards the Calculation and Reduction of Supply Chain Emissions"10

1-2. Background and objectives

Background: (2) CO2 visualization in an era of carbon neutrality
1-2-2. Background: (2) CO2 visualization in an era of carbon
neutrality
•

•

•

•

•

•

When the calculation of “emissions = activity data × secondary
data emission factor” is used for CO2 visualization, the main meansof reducing emissions is to reduce the amount of activity (energy
and raw material procurement, etc.). Specifically, reducing
production loss and slimming down parts through improved design
were the main approaches to Scope 3 reduction.
However, in an era in which Japan aims to reduce greenhouse gas
emissions to “carbon neutral” (net zero) by 2050, efforts to reduce
activities alone are insufficient.
As long as the formula “activity data × secondary data emission
factor” is used, achieving zero emissions requires reducing activity
to zero, but this means companies ceasing their business, which is
not a realistic solution.
Attention has turned instead to the use of primary data emission
factors using primary data (data pertaining to a specific product or
activity within a company’s value chain).
If suppliers reduce emissions and downstream companies
incorporate these effects into their emissions through thecalculation “emissions = activity data x primary data emission
factior,” synergy will emerge between activity reduction andimprovements in emission factors (supplier efforts) (Figure 1-2-2).
In addition, the spread of renewable energy in recent years has
made it possible for companies to significantly reduce emissions
while maintaining their business activities. If each company in the
supply chain visualizes the effects of these efforts and provides
them as primary data emission factors to companies downstream

in the supply chain, it will pave the way for decarbonization of theentire supply chain (Figure 1-2-2).

Traditional calculation and reduction of Scope 3 emissions
Emissions

Zero emissions
require zeroactivities

Activity data
Internal dataof companies
calculating Scope 3

Target of reduction
efforts

Secondary data emission
factor
Databases

Industry averages quoted
from databases, etc.

Cannot capture the effect of
suppliers’ emissions
reductions

Calculation and reduction of Scope 3 emissions in a carbon-neutral era
Emissions

Reduction effect =Synergy between
activity reduction
and suppliers’
emissions
reductions

Activity data
Internal dataof companies
calculating Scope 3

Target of reduction
efforts

Primary data emission
factorCO2 data unique to each company
reflecting the reduction efforts ofsupplier companies

Captures the the effect of
suppliers’ emissions
reductions

Figure 1-2-2 Significance of using “activity data x primary data emission
factor”
Source: Created by Mizuho Research & Technologies

111-2. Background and objectives

Significance of addressing “activity data × primary data emission factor”
Assume that Set Manufacturer X procures Part A from a supply chain consisting of mining, refining, transportation, and assembly.
For Company X, emissions from the purchase of Part A are part of Scope 3 Upstream Category 1: Purchased Goods and Services.
If the CO2 emissions specific to each supplier A to D can be obtained from primary data, reductions can be achieved through the efforts of each supplier rather thanrelying on reducing purchase volume.

◼
◼
◼

Set Manufacturer
X

Reduction
effortMiningRefining

Transportation

Assembly

CompanyD

CompanyC

Company
B

CompanyA

Introductionof highefficiency
equipment

Introductionof highefficiency
equipment

Introductionof zeroemission
vehiclesPart A

Scope 1, 2, and 3 emissions
structure of X
Scope 3 Upstream(Categories 1-8)

EmissionsamountPart aEmissions frompurchase of Part A

Secondary data emission
factorAverageemissionsfrom extraction

Averageemissionsfrom refining

Primary data emission
factorAmount ofemissions
unique toCompany D

Amount ofemissions
unique toCompany C

C3

S1

...

Cumulative
averageemissions

CO2 data specific to each company
reflecting reduction efforts

Amount ofemissions
unique toCompany B

Amount ofemissions
unique toCompany A

C11

S2

C9

C8

C12

...

Activity data...

Emission factor(Part A manufacturing emission factors)(Amount of Part A
procured)Industry average quoted from databases, etc.

Averageemissions fromtransportation

Scope 3
Downstream(Categories 9-15)

Scope
1, 2

C1

C2

Introductionof renewableenergy*"S" stands for Scope, "C" stands for
Category

Secondary data emission factor does notreflect individual companies’ efforts

When secondary data emission factors are used for
calculation, the results of the reduction efforts ofCompanies A to D are not reflected in the data.
In order to reduce emissions from Part A, Set
Manufacturer X must reduce the amount of activity(amount purchased).

EmissionsamountWhen primary data are used for emission factors, theresults of the reduction efforts of Companies A to D arereflected in the data.
By encouraging its suppliers to make reduction efforts, Set
Maker X can achieve emissions reductions without reducing
the amount of activities (amount purchased).

MiningMiningRefining

Refining

Transport

Transport

Assembly

Assembly

Efforts of each company are reflected inprimary data emission factor
Company D

EmissionsamountCompany C
Company B
Company A

Figure 1-2-3 Significance of using “activity data x primary data emission factor”
Source: Created by Mizuho Research & Technologies

121-2. Background and objectives

SWG Discussion: (1) Discussion on the definition of primary data (1/2)•

The Methodology SWG examined existing standards to confirm
primary data definitions, identifying two main approaches: (a) ISO
14067:2018, which emphasizes direct measurement or calculation
based on direct measurement; and (b) the GHG Protocol andPathfinder Framework (covered in 1-4-3), which focus on whether
data is unique to processes, activities, and enterprises.
Methodologies andstandards

Primary data definitions

ISO 14067:2018

Quantified value of a process or an activity obtained fromdirect measurement or a calculation based on direct
measurement

GHG Protocol• Data from specific processes in the lifecycle of the
product being evaluated (Product Standard)• Data from specific processes in the studied product’s life
cycle (Scope 3 Standard)Primary data is site-specific, company-specific or supply
Pathfinder Framework
chain–specificFigure 1-2-4: Primary data definitions in major standards•

This document emphasizes alignment with PACT’s Pathfinder
Framework v2 to achieve CO2 data calculations of an internationallyacceptable data quality, defining “primary data” as “data pertaining
to a specific product or activity within a company’s value chain,” asnoted in 1-2-2.

•

The SWG also considered whether data quality standards should be
set when identifying primary data.

•

This question arises from this document’s adoption of a policy ofrecognizing both Product-based calculation (using LCA and PCF
methods on a product basis) and Organization-based calculation(extraction of organizational emissions data such as Scope 1, 2, and3 emissions through allocation to specific suppliers, etc. (see 1-4-2).
•

The CO2 data obtained from the two methodologies may differ inthe degree of specificity to the target product. For example, in thecase of Organization-based calculation, emissions data related tothe manufacturing of a product other than the target product may
be mixed in (see 1-4-2).

•

On the other hand, there is no standard for CO2 calculation that
disallows primary data based on differences in calculation methods
and data quality, even if the data is specific to a company orprocess.

•

In light of these issues, this document has adopted the following
approach:a.

Recognize site-specific, company-specific, and supply-chain
specific data as primary datab.

BUT introduce a mechanism to ensure that CO2 data users
recognize that the nature and quality of primary data willvary depending on the calculation methodology and thequality of the data used and cannot necessarily be treatedequally (continued on next page).

13

1-2. Background and objectives

SWG discussion: (1) Discussion on the definition of primary data (2/2)■ Mechanism 1: Specification of calculation criteria•

We enabled avoidance of confusion between primary data drawn
from Product-data based and Organization-data based calculations(the issue which most concerned SWG members) by making it
mandatory to disclose the methodologies and standards used in
calculations when data is shared. (For definitions of Product-data
based calculation and Organization-data based calculation, see 1-42 (1)).

product-data or organization-data.
•

In addition, this document introduced the provision that when CO2
data based on Organization-data based calculations is used for
upstream emissions from Product-data based calculations, parties
using Product-data based calculations should not treat the primarydata derived from Organization-data based calculations as primarydata (see 2-1-3 for details). This decision is based on the fact that
Organization-data based calculations are often inferior to Productdata based calculations in terms of specificity to the target product.

•

This approach avoids primary data from Product-data based
calculation and from Organization-data based calculation being
assessed as equal.

Examples of methodologies and standards on which calculations are based• PCR/PEFCR• Together for Sustainability• ISO 14067: 2018
• ISO 14040/14044• ISO 14025• ISO T/S 14027• Pathfinder Framework• 2-2. Product-based calculation method inthis document
Calculation based on product data

• GHG Protocol
Scope 3 Standard, Chapter 8• 2-3. Organization-based calculation
method in this document• Unknown■ Mechanism 2: Implementation of data quality assessment•

In addition, this document introduces data quality assessment as ameans of making CO2 data users aware that primary data does notnecessarily guarantee high data quality.

•

Similar to the approach introduced in Version 2 of PACT’s Pathfinder
Framework, with which this document seeks to align, the quality of
the activity data and emission factor data forming the basis ofemissions calculations will be evaluated on the basis of fiveindicators (see 2-2-8 (2) for details).

•

Thus, the data activity side can identify whether the data is primarydata and whether data quality is high or low.

Calculation based on organizational data

Figure 1-2-5: Avoiding confusion between primary data drawn from
Product-data based and Organization-data based calculations(See Fig. 3-1-5 for a complete listing of methodologies and standards)•

The thinking behind Figure 1-2-5 is explained in 1-4-2 (4). Figure
1-2-5 is an excerpt from the options in the referenced standards inrelation to data disclosure elements shown in Chapter 3. See
Chapter 3 for details.

•

As a result, it is possible for a downstream operator to determine
whether the primary data provided has been calculated based on

14

1-2. Background and objectives

Achieving “activity amount × primary data emission factors”
1-2-3. Purpose: Realization of “activity amount × primary data
emission factors”•

The objective of this document is to provide a supply chain CO2visualization system based on the “activity amount × primary data
emission factors” that has been discussed so far.

•

However, adopting this calculation method raises new issues. For
example, if the method of calculating CO2 data varies widely
among suppliers, CO2 data of varied quality will be distributed.
Following Gresham’s principle of bad money driving out goodmoney, there may be cases of unreasonably low calculation of acompany’s product CO2 data.

•

In order to prevent such situations, this document establishes ① a
calculation method based on primary data and ② sharing methods(methods for disclosing data quality) for CO2 data subject to dataexchange throughout the supply chain using digital technology.

•

The purpose of developing an approach to CO2 data calculation
based on primary data is to minimize as much as possible thevariations and differences in CO2 data calculation methods used bysuppliers, and to improve the data quality of CO2 data exchanged
using digital technology. Details are given in Chapter 2.

•

However, in a situation where each supplier calculates CO2 data
based on its own primary data, the CO2 data groups distributed in
the future will have a certain variation in calculation methods anddata quality. Therefore, it is necessary to establish methods forsharing CO2 data (methods for disclosing data quality).

•

The purpose of developing data quality disclosure methods is tocreate an environment in which companies downstream in the
supply chain that use CO2 data can correctly understand thequality of the data provided, as well as to encourage users to makeappropriate use of the data based on its quality. With thispreference for high-quality CO2 data, we aim to achieve a situation
where “good money drives out bad money.” Details are given in
Chapter 3.

CO2 Visualization Framework Edition 1
Establish

Establish

CO2 data calculation method(Calculation based on
primary data)

CO2 data sharing method(Data quality disclosure
method)Target effectTarget effect

Minimize differences in calculation
methods and improve the qualityof CO2 data

Communicate data quality
appropriately and encourage
utilization based on quality

Figure 1-2-5 Two methods implemented by the CO2 Visualization Framework151-3. Scope of this document

CO2 data calculated and shared by suppliers
1-3. Scope of this document•

This document focuses on supplier efforts.

1-3-1. Measures taken by supplier companies•

It describes how suppliers calculate and share CO2 data as theprimary data emission factors used by downstream companies incalculating Scope 3.

•

If downstream companies request that suppliers comply with theCO2 data calculation and sharing methodologies in this document,
they should communicate with suppliers in such a way as not toviolate the Subcontract Act and the Act on the Promotion of
Subcontracting Small and Medium-sized Enterprises.

•

Scope 3 calculation and disclosure methodologies are defined by
the GHG Protocol Scope 3 Standard. However, sufficient guidance
has not been provided for companies downstream in the supply
chain that perform Scope 3 calculations on how companies(suppliers) upstream should calculate CO2 data and what
information should be attached and submitted.

Scope of thisdocument

Scope 3 standard is supported

Supplier side:・ CO2 data calculation
method・ CO2 data sharing
methodMiningRefining

CompanyD

CO2 data

Company
C

Transportation
CompanyB

CO2 data

Set maker
X

Assembly
Company A

Scope 3 Upstream(Category 1-8)
EmissionamountCO2 data

Scope
1, 2

C1
C2

Part APart A

CO2 data*"S" stands for Scope, "C" stands for
Category

Company X’s Scope 1, 2, and 3
emission structure

Emissions from Part
A procurement

C3

S1

...

C8

C11
C9

...

Amount of activity(Procurement volume
of Part A)

Figure 1-3-1 Scope of this document = Efforts by suppliers

S2

Scope 3 Downstream(Category 9-15)

C12

...

Emission factors(Part A manufacturing emission
factors)

Source: Created by Mizuho Research & Technologies

161-3. Scope of this document

Supplier CO2 data calculation and sharing methods for Scope 3 Category 1 calculation
1-3-2. Scope 3 categories targeted•••

Scope 3 upstream areas are classified and structured into
Categories 1-8 according to the GHG Protocol. Suppliers (including
service providers) exist for each category.
Of these, this document covers methods for calculating and sharing
CO2 data of suppliers corresponding to Category 1 “Purchased
goods and services.”
This document addresses Category 1 because it has the following
characteristics:

‒
‒

•

•

It is often the largest source of Scope 3 upstream emissions,regardless of industry.
This category covers the chain of activities of many suppliercompanies across multiple industries, including manufacturing,such as the procurement, processing, and transportation of raw
materials, appropriate to the expression "supply chain" (supply
network).
(Categories 2 and 3 have similar characteristics.)

The Scope 3 upstream emissions categories are roughly divided into
1, 2, and 3, which cover the activity chains of multi-industry
supplier companies, manufacturing included, and 4, 5, 6, 7, and 8,
which cover activities in specific industries (mainly service
industries). The concepts of this document for Category 1 may be
applicable to the similar Categories 2 and 3.
For Categories 4-8, which are of a different nature, the concepts inthis document are conceptually applicable, but the provisions forprimary data collection should be considered by industry.

Categories of supply chain activities of multi-industry suppliercompanies, manufacturing included
Purchased goods andScope ofservices
thisExtraction, production, transportation (between suppliers), etc. related to document
purchased goods and services
1

2

Capital goods

Extraction, production, transportation (between suppliers), etc.
related to capital goods
Fuel and energy activities not included in3
Scope 1 and 2
Upstream emissions of purchased fuels (extraction and refining, etc.)
Upstream emissions of purchased electricity (extraction, refining,transmission loss, etc.)

Also applicable toother categories

Conceptuallyapplicable
Should be
customized byindustry

Categories covering activities in specific industries, mainly service
4

Upstream transportationand distribution

5

Procurement logistics (direct fromsupplier to company)
Logistics in which the company is the shipper

6

Business travel
Employee travel

8

Waste generated inoperations
Disposal of in-house waste outside
the company

7

Employee commuting
Employee commuting

Upstream leased assets

Operation of leased assets leased for use
by the company

Figure 1-3-2 Scope 3 upstream categories and the scope of this document
Source: Created by Mizuho Research & Technologies

171-3. Scope of this document

Calculation method for the service category
1-3-2. Scope 3 categories targeted (continued)••

transportation and storage in response to the above issues.

In particular, it has been pointed out that with the pursuit ofcooperation and consolidation further complicating transportationand storage, emissions from which are covered by Category 4, fairguidance needs to be established for this category that can deal
with various cases (Figure 1-3-3).
The Logistics SWG was established under the Visualization WG in
September 2022 to develop CO2 data calculation methods for•

When the Logistics SWG completes its methodology, guidance will
be added to this document on the utilization thereof as well as
connection in terms of CO2 data.

•

Category 5 "Waste generated in operations", Category 6 "Businesstravel", Category 7 "Employee commuting", and Category 8"Upstream leased assets" should also be organized separately inlight of the specific circumstances of each industry.

"In short, logistics = transportation +storage, but in reality, these areclassified into multiple forms and change
as the business environment changes.
In addition, green logistics is expected
to become increasingly cooperative andconsolidated in terms of transportationand distribution. Therefore, fairguidance needs to be established to deal
with various cases. "Source: Green x Digital Consortium Data Visualization Project (2022) 'Study Preparation Phase/Primary Report for Establishment of Mechanism for Visualization of Supply Chain CO2'

Figure 1-3-3 Category 4 upstream transportation and distribution issues

181-4. Ideal shape and direction of realization

Ideal CO2 Visualization Framework
1-4. Ideal shape and direction of realization••

In addition to the purposes described above, there were many
views within the Methodology SWG regarding the ideal form of thisdocument.

•

Some of these elements are clearly contradictory (1 and 2, 3 and 4,etc.).

•

The following sections describe the implementation methods
adopted by the SWG.

These can be roughly classified into the six elements below.
1

Aim for an internationallyapplicable methodology and data
quality• Don’t create guidance limited to Japan.
• Aim for consistency with internationalframeworks/platforms for supply chain CO2
data exchange to enable data exchange andcollaboration.

1-4-1

2

1-4-3

3

• Establish a mechanism to promote the use of
primary data so as to reflect the reduction
efforts of supplier companies.
• Also establish a mechanism to protect suppliercompanies’ confidential information (rawmaterial composition, suppliers, etc.).

1-4-4

Enable the participation ofdiverse businesses• Instead of enforcing detailed calculation
methods, each company should be allowed to
calculate CO2 in a realistic manner.
• Create a mechanism facilitating participationby companies with limited capabilities andthose which use other methodologies for CO2
visualization.
1-4-1
1-4-2

Achieve both primary datautilization and protection ofconfidential information

1-4-5

4

Cover emissions right up to
the top of supply chain• Data traceback will stop if there are suppliers
that do not participate in CO2 data calculationand sharing.
• Even in this situation, CO2 emissions at the
top of the supply chain should be covered.
1-4-6

Figure 1-4-1 Ideal CO2 Visualization Framework

5

Coexistence with existing
standards• There are various methodologies andstandards in the world of CO2 visualization,and many companies that perform theircalculations using them.
• The manner of coexistence and division ofroles with existing methodologies andstandards must be clarified.
1-4-7

6

Enable some level of data
analysis• While it is important to protect suppliercompanies’ confidential information, it is also
important to allow companies that use data to
analyze to some extent the emission structure
and potential for reduction upstream in the
supply chain.
1-4-8

19

1-4. Ideal shape and direction of realization

Balancing prescription and inclusiveness
1-4-1. Balancing prescription and inclusiveness•Of the ideal forms shown in Figure 1-4 -1, there is a certain degreeof conflict between "1" and "2".

1
Prescription
orientation
Specify the CO2
data calculation
methodAim for internationallyapplicable methodology and data
quality•

The former calls for a higher level of prescription in the CO2 data
calculation method (prescription orientation).

•

The latter calls for a broader scope of CO2 data to be shared interms of calculation methods and data quality (inclusivenessorientation).

•

These two contradictory orientations need to be reconciled.

•

In this document, based on the discussion within the SWG, we aim
to achieve a balance between the two orientations through thefollowing approach.

• Don’t create guidance limited to Japan.
• Aim for consistency with internationalframeworks/platforms for supply chain CO2
data exchange to enable data exchange andcollaboration.

Reciprocity
2
Inclusivenessorientation
Expand the rangeof CO2 data to besharedEnable the participation ofdiverse businesses• Instead of enforcing detailed calculation
methods, each company should be allowed to
calculate CO2 in a realistic manner.
• Create a mechanism facilitating participationby companies with limited capabilities andthose which use other methodologies for CO2
visualization.

•-

The calculation methodology recommended in thisdocument aims for a level of quality acceptable forinternational supply chain CO2 data exchange(prescription orientation).

-

In sharing, constraints will not be place on the CO2 data
to be shared, subject to appropriate disclosure ofcalculation methods and data quality (inclusivenessorientation).

In other words, this is a two-tiered approach whereby (a) hurdles
for participation in supply chain CO2 data exchange are lowered byproviding inclusiveness in data sharing while (b) internationallyacceptable calculation methods and data levels are recommended,
and companies with the necessary capacity for high-level CO2
calculation are encouraged to do so.

Figure 1-4-2 Prescription and inclusiveness in CO2 data calculation and sharing20

1-4. Ideal shape and direction of realization

Illustration: Balancing prescription and inclusivenessThis document provides a roadmap for companies that want to reduce the barriers to participation by suppliers and to calculate and share CO2 data at a high level.
Calculation and compliance methods must be disclosed in sharing CO2 data, but the origin of that data is not restricted (inclusiveness orientation).
The new CO2 calculation method presented in this document aims for an internationally accepted calculation method and data quality (prescription orientation)

Data sharing
method specified
by the GD
Consortium
CFP certified
data
CO2 data
calculation
method specified
by the GD
Consortium
Scope 1, 2, and 3
data extracted forbusiness partners

Result calculated
for Company A
Product based on
LCA calculation
systemPrescription orientation

Inclusiveness orientation

Create a new GDConsortium
CO2 data calculation
methodGD Consortium
data sharing method
determining the scope ofdata exchange

Prescribe internationallyaccepted methodologies anddata quality.

Any CO2 data can beshared by disclosing the
calculation method anddata quality.

SuMPO EPD
certified data

Figure 1-4-3 Approach to balancing prescription and inclusiveness of CO2 data calculation and sharing
Source: Created by Mizuho Research & Technologies

211-4. Ideal shape and direction of realization

Scope of CO2 data that can be shared
1-4-2. Scope of CO2 data that can be shared(1) Examples of CO2 data that can be shared•

In line with the concept presented in the previous section of not
placing constraints on the CO2 data to be shared, subject toappropriate disclosure of calculation methods and data quality,
this document also takes the position of allowing the sharing of
the following CO2 data: (Examples in Figure 1-4-3)

a.

b.

c.

(2) Product-data based calculation and Organization-data based
calculation•

As indicated on the left, this document includes CO2 data
calculated with “organization” as the target for evaluation (Scope 1,
2, and 3, etc.) in addition to CO2 data calculated with “product” as
the target for evaluation .

•In order to describe the methodology in the future, these two CO2
data are defined and named as follows (Figure 1-4-4):

Product carbon footprint conforming to methodologicalstandards (e.g., ISO 14040/14044, 14067, GHG
Protocol Product Standard, etc.) other than thosedescribed in this document (Section 2)-

Greenhouse gas emissions data under Type III
environmental labels (quantitative environmental
information on product life cycles) (the figure uses theexample of SuMPO EPD * in the SuMPO Environmental
Labeling Program **)As shown in (a) and (b) on the left, cradle-to-gate
greenhouse gas emissions for products are based on
product-related data (BOM, production site, and facility
unit data) and are called “Product-data based calculation”
or “Product-based calculation.”-

Equates to the product carbon footprint (CFP).

-As shown in (c) on the left, the amount of greenhouse gas
emissions from cradle-to-gate that is evaluated byorganization is extracted by calculating allocation bycustomer, etc., and this is called “Organization-data based
calculation“or “Organization-based calculation.”-

Equates to the method whereby Scope 1, 2, and 3
emissions are extracted and provided for each supplierorganization-based CO2 data (Scope 1, 2, and 3, etc.)
extracted from the calculation of allocation by customer,
etc.

• It should be noted that all of these correspond to so-called “cradleto-gate” CO2 data, in which emissions are traced right back to thestart of the lifecycle. The reason why this document adopts thecradle-to-gate method in principle is described later in 1-4-6.
* The name was changed from “EcoLeaf” to “SuMPO EPD” on May 15, 2024.
* * CO2 data based on the SuMPO Environmental Labeling Program may be redefined as CO2 data based on
the calculation method indicated in this document if the PCR (product category rule) equates to the productspecific rule which this document positions as the highest priority application rule.

221-4. Ideal shape and direction of realization

Illustration: Product-data based calculation and Organization-data based calculation◼
◼

“Product-data based calculation” and “Organization-data based calculation” in CO2 data calculation can be conceptualized as follows.
However, this conceptualization highlights the differences between the two, whereas in practice there are cases where it is difficult to distinguish between them in
CO2 data calculation. This will be discussed later in 1-4-2 (4).

Overview

Product-data based calculation(Product-based calculation)

Organization-data based calculation(Organization-based calculation)

Conduct a lifecycle inventory analysis ofgreenhouse gas emissions by product and service(calculation of the so-called carbon footprint of products)

Allocation calculation by customer of Scope 1, 2, and 3 data as anorganization (e.g., allocation in proportion to delivery amount)

Step 4Rawmaterial 4

Step 5Rawmaterial 5

Step 6

Rawmaterial 6

・・・

Raw
material 1

Process0

Products

Scope 3 Upstream
C1

Step 2Rawmaterial 2

Step 3Rawmaterial 3

・・・

Identify key processes in
product life cycle and total
the emissions from eachprocess

Step 1

Calculations often
use BOM,
production facility
data and otherdata related to
products andservices.

C2

C3 ・・・ C8

Scope
1・2

・・・ to Company X andExtract the amount supplied
provideCO2 data ofproducts for
Customer X* "C" stands for Category** The area of the strip
corresponds to the size ofemissions by scope andcategory

Existing
calculation
standards

PCR (Product Category Rules), PEFCR
ISO 14067, GHG Protocol Product Standard, etc.

GHG Protocol Scope 3 Standard (Chapter 8)(However, priority is placed on Product-based calculations.)

Platforms/
frameworks

Catena-x, PACT Pathfinder,
CDP Supply Chain Program

CDP Supply Chain Program(Also handles CO2 data reporting for Product-based calculations)

Accuracy

The accuracy of calculation results is generally considered to be high.

The accuracy of calculation results is generally considered to be low.

OperationalburdenThe operational burden tends to be high due to the need to collectdata for each product.

Operational burden tends to be low because some allocation methods
allow lump-sum calculation.

Specialfeatures

Figure 1-4-4 Product-data based calculation and Organization-data based calculation in CO2 data calculation
Source: Created by Mizuho Research & Technologies

231-4. Ideal shape and direction of realization

Scope 1, 2 and 3 data use also permitted(3) Discussion on Organization-data based calculation• Some argue that CO2 data based on Organization-data based
calculation and CO2 data based on Product-data based calculation
should not be allowed to be shared because of the major differences
in calculation methods and data quality.
• In this regard, the Methodology SWG notes that:‒ The CDP Supply Chain Program, an international supply chain CO2
data exchange program, has adopted reporting based on CO2 data
through the allocation of Scope 1, 2, and 3, and many companies
related to the program have already reported CO2 data based on thismethod to their suppliers.
‒ The GHG Protocol Scope 3 Standard allows suppliers to provide
organization-based CO2 data to their suppliers.*
Chapter 8 of the Scope 3 Standard notes that””Companies should avoid or
minimize allocation bycollecting more detailed data through one of the following approaches:(1) Obtaining Product-based GHG data from value chain partners following the
GHG Protocol Product Standard 2(2) Separately sub-metering energy use and other activity data (e.g., at the
production line level)(3) Using engineering models to separately estimate emissions related to eachproduct produced.”

In light of the above, the following policy shall be adopted:(1) Given that this is in widespread practice, calculation ofOrganization-based calculation and sharing of the data will beallowed to the extent that it is made explicit that this is not
Product-based CO2 data.
(2) However, Organization-data based calculation will bepositioned as a provisional response, with a phased transition
to Product-data based calculation recommended.
• The methodology for product-data based calculation is detailed in 2-2of this document, and the methodology for Organization-data based
calculation is detailed in 2-3.
• In regard to clarification of the difference between the two
methodologies, it was suggested in the SWG that in practice, there
are cases where the accuracy of Organization-data based calculation
has increased in recent years, so there is no need to make a
distinction between this and Product-data based calculation.
• However, the SWG confirmed that a gap remains between the two
methodologies, leading to the formulation of the above policy.
Because this debate will provide a point of return when similar
debates arise in future, it will be discussed further in (4).

• Furthermore, from here on, this document will primarily use theabbreviations ‘Product-based calculation’ and ‘Organization-based
calculation’.

24

1-4. Ideal shape and direction of realization

Distinguishing between Product-based and Organization-based calculation(4) Boundary between Product-based and Organization-based
calculations••

In the SWG, many participating companies pointed out that thedifference between Product-based calculation and Organizationbased calculation was narrowing in a practical business sense (see(2) from SWG discussion).

‒ The Pathfinder Framework and the product-based CO2 calculation
method described in Section 2-2 of this document•- GHG Protocol Scope 3 Standard (Chapter 8)- The organization-based CO2 calculation method described in
Section 2-3 of this document

In this context, this document adopts the following concepts:‒ Product-based calculation and Organization-based calculation
will be distinguished by the methodologies and standards
used in the calcuation.

•

Cases in which Product-based calculation methodologies andstandards are used shall be deemed Product-based calculation.

•

The main Product-based calculation methodologies and standards
are as follows:‒ Product classification rules such as PCR (Product Category Rules)
and PEFCR‒ Rules for calculating the product carbon footprint by industry‒ Cross-sectoral carbon footprint standards for products such as ISO
14067 and the GHG Protocol Product Standard‒ Standards that set out Product-based LCA frameworks andrequirements, such as ISO 14040/14044 (including the METI/MoE
Carbon Footprint Guidelines)‒ Standards for calculation, verification, and PCR preparation for the
display of Type III environmental labels, such as ISO 14025

The main Organization-based calculation methodologies andstandards are as follows:•

If these are used, or if the methodological basis of the calculation is
unknown, the calculations shall be deemed Organization-based
calculations.

•

If it is deemed that careful implementation of organisation-data
besed calculation meets the requirements for the product-data
besed calculation methodology and standards (appropriateness ofboundaries, data collection, and allocation, etc.), this too will bedeemed Product-based calculation. However, the Product-based
calculation metholdology and standard must be provided.
Examples of methodologies and standards on which calculations are based• PCR/PEFCR• Together for Sustainability• ISO 14067 : 2018
• ISO 14040/14044• ISO 14025• ISO T/S 14027• Pathfinder Framework• product-based CO2 calculation method in
Section 2-2 of this document• GHG Protocol Scope 3 Standard (Chapter
8)• organization-based CO2 calculation
method in Section 2-3 of this document• Unknown

Product-data based calculation

Organization-data based calculation

Figure 1-4-5 Product-based and organization-based
data calculation25

1-4. Ideal shape and direction of realization

Distinguishing between Product-based and Organization-based calculation(4) Boundary between Product-based and Organization-based
calculations•

Even when organizational data such as Scope 1, 2 and 3 data isused, some cases could, depending on data granularity and theappropriateness of allocation and other processing, be regarded as
Product-based calculation. The key points are the completeness of
the life cycle boundary and the validity of the allocation calculation.

•

Completeness of the lifecycle boundary: If the underlying Scope 1,
2, and 3 emissions do not include processes for which evaluation isrequired by Product-based calculation methodologies and standards,
the CO2 data obtained by these allocation calculations cannot be
regarded as Product-based calculation.

•① Compulsory
evaluation processes for Product-based calculation not
Product-based
calculation.

included in organizational data

Processes included in Scope 3
Category 1
Process 4

Rawmaterial 4

Process 5

Rawmaterial 5

Process 6

Rawmaterial 6

Process 8

Rawmaterial 7

Processes included in Scope
1 and 2
Process 1

Rawmaterial 1

Process 0

Product•

Validity of allocation calculation: Considering that most of themethodologies and standards for Product-based calculation adopt
the concept of allowing the allocation of emissions only when it
cannot be avoided by process subdivision n, etc., it is unlikely thatavoidable allocation calculations will be considered Product-based
calculation.

•

The final decision is left to third party verification, but the above
two points are considered to be important factors in determining
whether CO2 data using Scope 1, 2 and 3 data can be considered
Product-based calculation.
② Performance of avoidable allocation calculations

Calculation of emissions of specific products by allocating emissions for theentire group to the total production volume of all products in the group underconditions where data can be collected at each site.
Group
Product 1A

CompanyA
Process 2

Process 3

Rawmaterial 2

Rawmaterial 3

・・・
・・・
・・・
・・・

Processes not included in Scope 1, 2 or 3 but essential inevaluation of Product-based calculations

Base 1

Product 1A Product 1B

Base 2

Product 2B Product 2B

Company
B

Base 3

Product
3A

Product
3B

Emissions

Total group emissions=

Product 1A
Production
volumeBase 1

Base 2

Base 3×
Production of all group products

Product 1A Product 2A Product 3A
Product 1B Product 2B Product 3B

Figure 1-4-6 Two representative cases in which Organization-based calculation cannot
Source: Created by Mizuho Research & Technologies
be regarded as Product-based calculation26

1-4. Ideal shape and direction of realization

SWG discussion: (2) Boundary between Product-based and Organization-based calculation (1/2)•

In the SWG, it was pointed out that there are practical cases
where it is difficult to draw a clear distinction between the two. As
this discussion contains important points in terms of the practicalapplication of CO2 data calculation, it is introduced below.

① Closing the gap between organization data and product data
through digitization••

Organization-based calculations are generally considered to be lessaccurate than Product-based calculations because it is assumed
that Scope 1, 2, and 3 emissions will have been totalled at thecompany or consolidated group level and allocated according to
the volume of all products and services produced at the company
or consolidated group level.
Today, however, due to increasing digitization, organization data
(CO2 data for each site and line) collected to calculateorganizational emissions is often stored in systems and thus easily
accessible.

•

In such cases, emissions per site or line can be allocated by the
production of products and services produced by site or by line.
These calculations are also commonly used in Product-based
calculations.

•

If organization data is managed at the level of granularity
described above, the CO2 data obtained from the allocation
thereof will be less likely to differ from the results of Product-based
calculation.

◼ Example of Group X, which manufactures six types of products at Companies A
and B and Bases 1, 2 and 3
Group X
CompanyA

Company
B

Base 1

Product 1A Product 1B

Base 2

Product 2A Product 2B

Base 3

Product
3a

Traditional organization- levelcalculation
Product 1A =emissions

Product
3b

Allocation calculations involving emissions data
unrelated to the productTotal groupemissionsBase 3
Base 1
Base 2

Scope 1, 2 and 3 emissions
calculated on a group basis

Production of all group products

× Product 1A÷ Product 1A Product 2A Product 3A
production
volumeProduct 1B Product 2B Product 3B

Calculation of allocation within the scope of emission
Recent Organization-based
data for target products
calculation
Base 1 emissions
Product volume at Base 1
Product
Product 1A =Product 1A
Base 1
Base 2 ×
÷ Product 1A Product 2a 3a
Product
production
emissions
Product 1B Product 2b
Base 33bvolume◼ When calculating the CO2 data of Product 1A manufactured at Site 1 usingorganization- level calculation, instead of dividing the emissions of the entire
group by the production of the entire group, emissions per site and line can bedivided by production volume per site and line.

Figure 1-4-7 Refining Organization-based calculation
Source: Created by Mizuho Research & Technologies

27

1-4. Ideal shape and direction of realization

SWG discussion: (2) Boundary between Product-based and Organization-based calculation (2/2)② For SMEs, organization data ≒ product data•

In addition, many SMEs have only one manufacturing site andproduce only a small number of elements.

•

In this case, the CO2 data in the Organization-based calculation isequivalent to the CO2 data in which the emissions per site or line
are allocated by the production volume of products and services
produced at the site or line, and it is difficult to tell the difference
from Product-based calculation.

③ Changes in Product-based calculation•

At the same time, the Product-based calculation side is alsochanging.

•

Recently, the process of identifying the major processes in the
product life cycle, collecting data on each process, and calculating
total emissions recognized as characteristic of Product-based
calculation is often omitted.

•

This is due to the fact that with the enhancement of the LCA
database, secondary data emission factors that go back to themost upstream processes (mining, etc.) related to manufacturing
have been improved for many products and services.

•

In Product-based calculation, too, only the activity data of the
input/output of the company's processes should be collected, andemissions from upstream and downstream processes are
increasingly calculated by multiplying the activity data by thesecondary data emission factors obtained from the LCA database.

•This calculation method is similar to the calculation method used in
Scope 1, 2, and 3, which are the emissions of organizations,indicating that there are a growing number of cases where thedifference between Product-based and Organization-based
calculation is not clear even in the treatment of upstream
processes.
④ Boundary between Product-based calculation andOrganization-based calculation•

Given that the distance between Product-based and Organizationbased calculations is now less than previously thought, a memberof the Methodology SWG suggested that if allocation calculations
are made after Scope 1, 2, or 3 emissions have been identified at
the site or production line level, they should be considered as
Product-based calculations.

•However, it was also pointed out that since there are cases such as(1) in Figure 1-4-6, it is not possible to certify Product-based
calculation only by the implementation level of allocation.

•

In the end, the categorization of Product-based and Organizationbased calculations was based on the comprehensive criteria of
whether or not the calculation could be regarded as conforming to
the Product-based calculation methodology and standards,
including the appropriateness of determining lifecycle boundaries
and allocation.

•

In other words, CO2 data calculation along the same trajectory as
Organization-based calculation can also be regarded as Productbased calculation if it can meet the requirements of themethodologies and standards for Product-based calculation given
the appropriate allocation and boundary-setting, etc.

28

1-4. Ideal shape and direction of realization

Alignment of Product-based calculation with the PACT Pathfinder Framework
1-4-3. Alignment with international frameworks/platforms•

As confirmed in 1-4, this document aims to develop methods forcalculating CO2 data that are consistent with internationalframeworks/platforms in order to realize the ideal form “1. Aim for
an internationally applicable methodology and data quality.”(1) About Product-based calculation•

The Pathfinder Framework, a methodology for calculating andsharing CO2 data published by the Partnership for Carbon
Transparency (PACT) hosted by WBCSD, was selected as aninternational framework aiming for consistency in Product-based
calculation.

•

We chose PACT‘s Pathfinder Framework as the alignment
framework because:•

Section 2-2 provides guidance on the concept of the Pathfinder
Framework and how to apply it as a Japanese company,
positioning it as a Product-based CO2 data calculation methodthat ensures internationally acceptable data quality.

•

The Green x Digital Consortium is a member of PACT’s
Pathfinder ecosystem and regularly exchanges views with PACT.

•

This document has been reviewed and confirmed by PACT toensure consistency with the Pathfinder Framework v2 for
product-based calculations.

‒ It is operated by GHG Protocol co-organizer WBCSD and isconsidered to have considerable influence as a methodology forcalculating Scope 3 emissions.

‒ In fact, many leading supply chain data sharing platforms such as
Catena-X and many global companies participate in thisframework.
‒ It provides a methodology for suppliers creating CO2 data basedon primary data and sharing it across the supply chain using
digital technology that is consistent in purpose and means withthis document.

Figure 1-4-8 PACT Pathfinder Framework v2
Source: PACT Pathfinder Framework v229

1-4. Ideal shape and direction of realization

Organization-based calculation based on Scope 3 Standard Chapter 8(2) organization-based calculation

based on Chapter 8 of the GHG Protocol Scope 3 Standard.

•

The CDP-operated CDP Supply Chain Program is known as aninternational program for exchanging CO2 data obtained throughOrganization-based calculation, but the program does not provide
rules or regulations on data generation methodology.

•

Currently, Chapter 8 (Allocating Emissions) in the GHG Protocol
Scope 3 Standard is the only document that can be called guidancein terms of a methodology for Organization-based calculation.

•

Therefore, Section 2-3 of this document presents a methodology
for calculating higher quality CO2 data at the organization level•

However, Chapter 8 only provides recommendations and does notinclude requirements. This document also recommends a gradualtransition from Organization-based calculation to Product-based
calculation. For this reason, the Organization-based calculation
methodology presented in this document is positioned as arecommendation for improving data quality.

•

Figure 1-4-9 reflects the above based on the original Figure 1-4-3
on prescription and inclusiveness in CO2 data calculation andsharing.
Figure 1-4-9 Prescription
and inclusiveness in CO2
data calculation and sharing

Product-based
calculationof CO2 data

organization-based
calculationof CO2 data

(Figure 1-4-3 re-rendered with theaddition of Product-based andOrganization-based calculation concepts)

Product-based
calculation methodology
consistent with Pathfinder
Framework
Recommendations for
improving data quality inorganization-based
calculations

Section 2-2

Section 2-3

GD Consortium
CO2 calculation
methodInternationallyacceptable
methodology anddata quality

GD Consortium
CO2 data
sharing rules

Data sharing
assuming data
quality
disclosure

Source: Created by Mizuho Research & Technologies30

1-4. Ideal shape and direction of realization

Aim for a level that enables vertical comparison (evaluation of improvement over time)
1-4-4. Target level of CO2 visualization
The Methodology SWG had two views on what the aim should be indeveloping a method for calculating CO2 data using primary data:•‒ (1) For downstream companies that purchase similar goods andservices from different supplier companies to compare which
goods and services were provided with lower CO2 emissions(referred to as horizontal comparison in this document)‒ (2) To evaluate the degree to which CO2 reduction is progressing
over time due to the reduction efforts of supplier companies thatprovide the same products and services (referred to as verticalcomparison in this document)•

The Pathfinder Framework adopted in this document as aninternationally accepted method for calculating CO2 data takes the
position of aiming for both horizontal and vertical comparison.

•

However, because (a) horizontal comparison would requireestablishing and sharing detailed calculation conditions, which
could greatly reduce the number of companies able to participate,and (b) even if the Pathfinder Framework methodology is followed,
it would not necessarily guarantee the feasibility of horizontal
comparison, the SWG adopted the following approach:‒•For the time being, the target level of CO2 visualization should bea level that reflects supplier companies' efforts to reduce CO2
emissions through the use of primary data and enables
evaluation of CO2 reductions over time (vertical comparison).
The calculation method presented in Section 2 assumes a levelconsistent with this application.
However, this does not preclude companies using CO2 data fromperforming horizontal comparisons at their own risk. A sharing
method for communicating the data quality of CO2 data ispresented so that it can be determined whether the data is crosscomparable.
Supply Chain 1
Raw material
miningOperator 1

Material
manufacturing
Operator 1

Parts
manufacturing
Operator 1

Part A

Parts
manufacturing
Operator 2Part A

Parts fromdifferent
suppliers butwith the same
specifications

Supply Chain 2
Raw material
miningOperator 2

Material
manufacturing
Operator 2

Horizontal comparison(intercompany comparison)

Vertical comparison(evaluation over time)

Compare the emissions of similar
products from different suppliers

Evaluate CO2 data improvement
over time in products in the same
supply chain
Raw material
miningRaw material
miningMaterial
manufacturingParts
manufacturing

Part A(Supply Chain 1)

Raw material mining
Material
manufacturing
Parts manufacturing

Part A(Supply Chain 2)

Raw material
miningParts
manufacturing

Material
manufacturingParts
manufacturing

Raw material
miningMaterial
manufacturingParts
manufacturing

X year

X+1 year

X+2 years

Material
manufacturing

Part A (Supply Chain 1)

Figure 1-4-10 Vertical comparison and horizontal comparison
Source: Created by Mizuho Research & Technologies311-4. Ideal shape and direction of realization

SWG discussion: (3) Strictness of conditions enabling horizontal comparison•

As mentioned above, the SWG selected the Pathfinder Frameworkas an internationally accepted method for calculating CO2 data.

•

However, the SWG has concluded that it is too early at this point to
aim for cross-product and cross-company comparisons of CO2
data (horizontal comparison).

•This is because the conditions under which horizontal comparisons
can be made are very strict, and it is expected that evencalculations based on the Pathfinder Framework will not satisfy
these conditions.

•

For example, the international standard ISO 14067:2018, whichsets out requirements and guidelines for quantification of the
carbon footprint of products (CFP), requires that when a CFP
comparative study (horizontal comparison) is made, the calculation
is based on the same product category rule (PCR) under ISO
14027:2018. The METI/MoE CFP Guidelines take the same
approach. Compliance with the Pathfinder Framework alone does
not satisfy this condition.

■ Issues with system boundary equivalence•

To give a specific example, ISO 14067:2018 states that forhorizontal comparisons, system boundaries must be equivalent(Annex B).

•

However, while the Pathfinder Framework gives priority to theapplication of PCR, etc., as described below, CO2 data calculation
using cross-sectoral standards such as ISO 14067 is also permitted
in the absence of PCR. In this case, even if the CO2 data is basedon the Pathfinder Framework, the system boundaries between

products and between companies may not be aligned.
•

The Pathfinder Framework also specifies cradle-to-gate as asystem boundary, as described below, but this has not yet reachedthe level of a PCR specifying in detail the processes that should be
included in CO2 data calculations for different companies.

•

Based on the above discussion, the SWG concluded that it ispremature to pursue horizontal comparison under the present
circumstances, since there may be cases where calculations basedon the Pathfinder Framework fail to satisfy the conditions enablinghorizontal comparison.

■ Toward long-term realization of horizontal comparison•

However, it is expected that as the practice of CO2 data calculation
spreads, boundary setting and data collection will converge at a
certain level. By utilizing digital technology, data quality can beeasily evaluated and exchanged, thereby avoiding poor quality
data from the user side.

•

Several SWG participants expressed the view that thesedevelopments will gradually enable horizontal comparisons of CO2
data over the long term.

32

1-4. Ideal shape and direction of realization

Provision of calculation results (outputs)
1-4-5. Promotion of primary data utilization and protection ofconfidential information•(1) Provision of calculation results (outputs)•

customer.

When a supplier provides CO2 data using primary data to acompany downstream in the supply chain, the challenge is toprotect the supplier’s confidential information.

‒ What suppliers provide (share) to customers is CO2 data (output
information) from calculations using primary data.

•

Primary data for calculating CO2 data includes activity data
corresponding to inputs in supplier emissions calculations (energy
and raw material inputs) and the calculation results of emissions
corresponding to the output.

•

Downstream customers also tend to want to receive input
information so as to verify output validity, but this often comprises
data that the supplier side wants to keep confidential from the‒ The activity data (input information) used to calculate CO2 dataneed not be provided (shared).
•

Of course, if the supplier wants to provide the customer withactivity data, they are free to do so.

•This concept is consistent with the Pathfinder Framework.

Input information (no need to provide)◼
◼

This document consequently takes the following approach:

Output information (information provided to customers)◼
◼

Input information for CO2 data calculation
Comprises activity data and upstream supplierinformation, etc.

CO2 data from calculations (output information)
Emissions, calculation assumptions, data quality information,
etc.

Fuel I input

kL

Product namePower II input

kWh

CO2 emissions per declared unit

Raw material A inputkg

Raw material B input

kgPart X input

Unit

CO2 equivalent

Calculation rules/standards followed
Primary data ratio
Secondary data database used

...

...
Figure 1-4-11 Input and output information related to CO2 data calculation

Source: Mizuho Research & Technologies

33

1-4. Ideal shape and direction of realization

Image of CO2 data calculation using primary data
(2) Image of CO2 data calculation using primary data•

below) does so by multiplying their activity data (primary data in
principle) by its emission factors.

According to the arrangement on the previous page, when acompany obtains data from an upstream supplier, in principle itreceives the calculated CO2 data, not the upstream supplier’s
activity data.

•

Based on this relationship, the figure below shows the image of theCO2 data calculation assumed in this document, taking the example
of a supplier procuring fuel, power, materials, and parts.

•

The supplier calculating the CO2 data (Supplier A in the figure
Upstream suppliers•

At this time, (i) when CO2 data based on the primary data is
obtained from upstream supplier, this data will be adopted as theemission factors, and (ii) when CO2 data cannot be obtained fromthe upstream supplier, secondary data will be cited from various
databases and used as the emission factors.

Emissions structure of customer
Supplier A

Part yFuel A supplierPower B supplier

Amount of activity

Emission factors

Use primary data

Primary data recommended/secondary
data acceptable

Material C supplierPart D supplier

Fuel A
CO2 data

Part A

Power B
CO2 data

Fuel A input

×

Fuel A emission factor *Power B input

×Power B emission factor *Material C input

×

Material C emission factor

Part D input

×

Material C
CO2 data(Primary data) (Primary data) (Primary data)* There are 2 types of fuel and electric power emission
factors: (i) emission factors related to fuel combustion and (ii)emission factors related to the combustion supply chain(Figure 1-4-18). That difference is omitted here.

Customer

Database(Primary data)(Secondary data)

Scope
1, 2

Scope 3downstream

Part aPart A
CO2 data

Emissions from procurement ofPart A(Per unit amount)Part A
input volume

Part D emission factor
Part D
CO2 data

Scope 3
upstream

Part A emission factors(Emissions from theproduction of each unit)

Calculated using primary data
Used by the customer company as the emission factors for Part A

Figure 1-4-12 Image of CO2 data calculation using primary data
Source: Created by Mizuho Research & Technologies

34

1-4. Ideal shape and direction of realization

Introduction of primary data share and data quality assessment(3) Introduction of primary data share (PDS)(4) Introduction of Data Quality Ratings (DQR)•

To encourage suppliers to use primary data, this document follows
the Pathfinder Framework and introduces the calculation anddisclosure of primary data share (PDS).

•

PDS is an indicator of the percentage of CO2 data provided by asupplier to downstream entities based on primary data.

•

The PDS level enables companies downstream in the supply chain
to determine to what extent the CO2 data provided by suppliercompanies (used as emission factor) includes primary data.

•

Higher PDS values are desirable in order to reflect the reduction
efforts of upstream suppliers in the Scope 3 emissions ofdownstream enterprises. Therefore, PDS calculation and disclosure
encourage downstream companies to request upstream suppliers to
improve their PDS.

•

The PDS formula will be introduced for Product-based calculations(see Section 2-2-8 (1)) but postponed for Organization-based
calculations (see 2-3-2 (6)).
Portion of CO2 data
based on primary data
PDS
(Primary data
share)•

This document also follows the Pathfinder Framework in introducing
Data Quality Ratings.

•

By introducing technological representativeness, temporal
representativeness, geographical representativeness, completeness,and reliability as indicators, the aim is to enable data quality of CO2
data at a different point from the PDS and to help downstream
companies make decisions on data utilization (such as whether toaccept or reject data).

•

Details will be given later in Section 2-2-8 (2).

TechnologicalrepresentativenessThe degree to which the data reflects theactual technologies used in the process

Temporal
representativenessThe degree to which the data reflects theactual time (e.g., year) or elapsed time ofthe process

Geographic
representativenessThe degree to which the data reflects theactual geographic location of the process

CompletenessThe degree to which the data is statistically
representative of the process site

Reliability

The reliability of the sources used for dataacquisition, data collection methods, andvalidation procedures=
Overall CO2 data
Portion of CO2 data
based on primary data+

Portion of CO2 data
based on secondary data

Figure 1-4-13 PDS concept
Source: Created by Mizuho Research & Technologies

Emission factor
data quality
indicators

Activity
data quality
indicators

Figure 1-4-14 Five data quality assessment indicators
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v235

1-4. Ideal shape and direction of realization

SWG discussion: (4) PDS limitations•

As will be discussed later in Section 2-2-8 (1), in the calculation of
the primary data share (PDS), this document follows the Pathfinder
Framework in taking the position that the calculated CO2 data
(emissions) can be regarded as primary data only if both the activity
data and emission factors are primary data.

•

However, some members of the SWG, while acknowledging theusefulness of this concept, also pointed out that caution should be
exercised when using it.
‒ What is useful is that, in order for CO2 data to be consideredprimary data, not only the amount of activity but also the emission
factors must be primary data, so that in order to increase the PDS,
supplier companies are more inclined to seek CO2 data based on
primary data from supplier companies further upstream (fromCase 2 to Case 1, as shown in the figure).
‒ The problem is that even if the CO2 data was provided by suppliercompanies, if the emission factors used in the calculation aresecondary data, the PDS will be 0 (Case 2 in the figure).
‒ The Pathfinder Framework identifies CO2 data provided bysuppliers as a primary emission factor for downstream companies.
However, in the above situation, even for the primary data
emission unit, the PDS is 0%. There is no numerical difference
between the PDS and Case 3 in the figure where both the theamount of activity and the emission factors are secondary data.
‒ Furthermore, if the PDS can be 0% even for the primary data
emission factor, even for Case 1, there could be cases where the
PDS of the calculated emission amount is 0%.

•

Case 2 is clearly superior to Case 3 in terms of showing the actual
emissions specific to the supplier company. However, the PDS cannot

show the difference between them. Furthermore, while Case 1 is thebest case, even then the PDS may be 0%, which is the same as inCases 2 and 3. These points must be understood as PDS limitations.

Figure 1-4-15 Limitations of PDS as as indicators
Supplier company side
Activity data

×

Emission factor

Case 1: Primary data for both activity data andemission factors
Fuel A input

×

Fuel A emission factor

Power B input

×Power B emission factor

Material C input

×

Material C emission factor=

Amount of emissions
Emissions factors fordownstream companies
Amount of emissions(PDS=0-100%)

Case 2: Activity data is primary data, but emissions factors are secondary data
Fuel A input

×

Fuel A emission factor

Power B input

×Power B emission factor

Material C input

×

Material C emission factor

Amount of emissions(PDS=0%)Case 3: Both activity data and emission factors are secondary data (sameas from secondary data database)
Fuel A input

×

Fuel A emission factor

Power B input

×Power B emission factor

Material C input

×

Material C emission factor
LegendPrimary data

Amount of emissions(PDS=0%)

Secondary data

Source: Created by Mizuho Research & Technologies

36

1-4. Ideal shape and direction of realization hod

Adoption of the cradle-to-gate method
1 -4 -6. Adoption of the cradle-to-gate method

cycle assessment. However, in the calculation and exchange of CO2
data in the supply chain, since the CO2 data after shipment iscalculated by the downstream company, the supplier company is
responsible for the calculation within the scope of gate-to-gate orcradle-to-gate.

(1) What is the cradle-to-gate method?
•

To achieve the ideal form in “1-4-4. Cover emissions right up to the
top of supply chain,” this document adopts, in principle, the cradleto-gate method as the CO2 data calculation method implemented bysuppliers, as in the PACT Pathfinder Framework.

•

Using this approach, CO2 data is calculated from cradle (resource
extraction) to gate (factory gate).

•

Other methods include the cradle-to-grave method and the gate-togate method, which only covers emissions from a company’s own
direct activities from the reception of materials from suppliers to thecompany’s factory gate.

•

Company calculating
CO2 data...

...

Molding
operator B

Emissions from upstream
activities
Covers through to the top of
the supply chain

Assembly
operator A

The cradle-to-gate method is adopted over gate-to-gate because,
when the gate-to-gate method is used, if any one supplier does notparticipate in CO2 data calculation and sharing, emissions up to the
top of the supply chain will not be covered.

* Even if the gate-to-gate method is adopted, it does not apply if downstream operator
calculations complement emissions from the upstream activities of the supplier. See
Section 1-4-6.

Normally, the cradle-to-grave method is assumed in product life

Miningoperator X•

Ship toParts

Set
manufacturer

Final
products

Transportation
business
operator

Consumer
User

Waste
disposalcompanyGate-to-gate
Emissions fromdirect activities

Cradle-to-gate
Emissions from upstream activities added to emissions
from direct activities (gate-to-gate)

Cradle-to-grave

Full lifecycle including in assessment all stages from the topof the supply chain through to product usage and disposal

Figure 1-4-16 Cradle-to-gate and other systems

Source: Created by Mizuho Research & Technologies

37

1-4. Ideal shape and direction of realization

Advantages of the cradle-to-gate method (Emissions coverage to top of supply chain)(2) Advantages of the cradle-to-gate method••

The cradle-to-gate (C-to-G) approach ensures that suppliers
participating in the calculation and sharing of CO2 data will always
cover right through to the top of the supplier chain.

‒•

Assumes a supply chain with Tier 4 as the most upstream.
If companies in each tier calculate and share their C-to-G emissions, emissions will
be covered up to the top of the supply chain even if some companies do notparticipate in the data calculation.

Gate-to-gate (G-to-G) emissions from their own direct
activities

Emissions from upstream activities through to the top of
the supply chain (in the absence of upstream data, calculatedusing secondary data)

Figure 1-4-17 illustrates this idea using a simple unbranched supply
chain consisting of four tiers. In addition to G-to-G emissions,companies in each tier also calculate emissions from upstream
emission activities using secondary data. Even if some upstream
companies do not participate in the data calculation, their emissions
will be covered through to the top of the supply chain.
It can also be seen from the figure that if companies in all tiers
engage in CO2 data calculation and downstream sharing, the C-to-G
emissions data calculated and provided by the lowest tier supplier
will be the sum of the G-to-G emissions calculated by each supplier.
The more companies calculate and share CO2 data, the more
downstream C-to-G emissions reflect their actual emissions andefforts to reduce them.

Tier 3Tier 4This is because the supplier company takes on the responsibility forcalculating C-to-G emissions comprising the following components:
‒

•

◼
◼

Company D

CO2 data
calculated byCompany A
to provide
downstream

CO2 data
calculated byCompany B
to provide
downstream

CO2 data
calculated byCompany C
to provide
downstream
CO2 data calculatedby Company D toprovide downstream
Top of the supply
chain, so
C-to-G and G-to-G
are equivalent

Tier 2Company C

Company B

Tier 1Company A

C-to-G
Emissions from upstream activities(through to top of the supply chain)G-to-G
direct activity

C-to-G
Emissions from upstream activities(through to top of the supply chain)G-to-G
direct activity

C-to-G
Emissionsfrom upstream
activities

G-to-G
direct activity

C-to-G
G-to-G
direct activity

G-to-G: Gate-to-gate emission data
C-to-G: Cradle-to-gate emission data

Figure 1-4-17 CO2 data structure in the C-to-G method
Source: Created by Mizuho Research & Technologies

38

1-4. Ideal shape and direction of realization

Cradle-to-gate CO2 data calculation(3) Cradle-to-gate CO2 data calculation•

As shown on the previous page, with the cradle-to-gate (C-to-G)
method, gate-to-gate (G-to-G) emissions from direct activities andemissions from upstream activities need to be calculated. All ofthese are calculated by activity data × emission factor.

•

The calculation concept is shown in Figure 1-4-18. In the past, a
supply chain without branches was adopted for simplification
purposes, but here we present a more realistic branched supply
chain (with multiple inputs) as a model.

Fuel A supplier

Fuel A

Power B supplierPower B

Power B supplier

Material C

Part D supplierPart DIn cases whereby secondary data are used for emission factors incalculating the activity data × emission factor shown under“Emissions from upstream activities” at the lower left of the figure,the calculation method is that noted on the previous page, i.e., “inthe absence of upstream data, calculations using secondary data.”•

Naturally, the secondary data emission factor used here should
cover emissions up to the top of the supply chain. Section 2-2-6
notes which database should be used for the secondary data
emission factor.

Supplier A
Products

Uses Fuel A and Power B as energy sources to process
Material C and Part D

Emissions from upstream activities (to the top of the supply chain)
Activity data
(primary data)•

G-to-G emissions (emissions from direct activities)

Emissions factor(primary data recommended/secondary data allowed

Activity data
(primary data)

emission factor(Primary data recommendation/secondary dataalso possible)

Fuel A input

×

Fuel A emission factor (Fuel production to the top of the supply
chain)

Fuel A input

×Power B input

×Power B emission factor (Fuel production for power generation to
the top of the supply chain)Power B input

×

Material C input

×Part D input

×

Material C emission factor (Material production to the top of the
supply chain)
Part D emission factor (Manufacture of parts to the top of the
supply chain)

Fuel A emission factor (emissions during combustion)
Power B emission factor (emissions during power
generation)

While omitted in this figure, in addition to “activities x emissions factor,” processgenerated direct emissions also need to be calculated and added into the total.

Figure 1-4-18 Calculation of G-to-G emissions using the C-to-G method and emissions from upstream activities

Source: Created by Mizuho
Research & Technologies

391-4. Ideal shape and direction of realization

When suppliers can only usine the gate-to-gate method(4) Getting started with the gate-to-gate approach
•

•

•

•

Although this document uses the C-to-G method as its premise forcalculating CO2 data, the Methodology SWG pointed out that thecalculation of emissions from upstream activities required by thismethod is difficult, particularly for companies and SMEs that are
addressing CO2 data calculation for the first time.
Therefore, this document allows companies that cannot comply with
the C-to-G method to calculate CO2 data using the gate-to-gate (Gto-G) method.
However, since G-to-G CO2 data does not include emissions
upstream from the supplier, downstream companies using the datacannot cover emissions upstream in the supply chain. Since Scope 3
Category 1 is calculated up to the top of the supply chain, Category
1 is not correctly calculated when G-to-G emissions data provided
by suppliers is taken as the emission factor.
Therefore, when downstream companies use G-toG CO2 data
provided by supplier companies to calculate Scope 3 Category 1
emissions, they must calculate and supplement emissions fromupstream activities by proxy. Specifically, this means calculating
emissions from upstream activities as shown Figure 1-4-18.

Tier 2...

C-to-G
Usually, Supplier A calculates
CO2 data using the C-to-G
method and provides this tocompanies downstream

Tier 1Company
B

Company
using data

Calculation
by Company A

Emissions from upstream
activities(Full upstream coverage)

G-to-G

Data
provision

Calculation
by Company A

Suppliers that cannot use theC-to-G format are allowed to
calculate CO2 data in the G-toG format

However, companies using
data on emissions fromupstream activities should
complement this by making
calculations on behalf of theabove suppliersCompanyA

G-to-G

Data
provision

Calculation by company
using the data

Emissions from upstream
activities(Full upstream coverage)

Dataacquisition

G-to-G: Gate-to-gate emissions data
C-to-G: Cradle-to-gate emissions data

Figure 1-4-19 Cradle-to-gate method not supported
Source: Created by Mizuho Research & Technologies401-4. Ideal shape and direction of realization

SWG discussion: (5) Possibilities and issues with the G-to-G method•

In this regard, the upstream emissions data which the C-to-G
approach provides to downstream companies comprises only the
results of C-to-G emissions calculations and does not disclose trade
information, so it has an advantage in terms of confidentiality.
However, with the emergence of regulations such as the EU
Sustainable Batteries Regulation that require the presentation of
traceability information in the supply chain, there may be a limit to a
C-to-G method that does not retain traceability information for
upstream supplier companies.
Although the G-to-G method was not adopted here, it may bereconsidered in the future if a strong regulatory requirement for
traceability emerges.

...

•

In order to add Tier 2 companies' data to the Tier 1 data in the Gto-G method (Figure 1-4-20), it is necessary for Tier 1 to identify
which companies are designated as Tier 2 and to what extent theypurchase products and services—that is, to provide highly
confidential information on transactions to the network and thus risk
the leakage of confidential information.

...

•

G-to-G 3-3

EmissionsamountAdding data from Tier 3
companies requires data on
Tier 2 and Tier 3 transaction
volumesG-to-G 3-2
G-to-G 3-1

Adding data from Tier 2
companies requires data on
Tier 1 and Tier 2 transaction
volumesG-to-G 2-2

G-to-G 2-2

G-to-G 2-1

G-to-G 2-1

G-to-G 1

G-to-G 1

G-to-G 1

G-to-G 3-1

G-to-G 2-1

G-to-G 1

Tier 3-1

Tier 2-1

Tier 1G-to-G 3-2

G-to-G 2-2

Tier 3-2

Tier 2-2

G-to-G 3-3...

•

On the other hand, it was also pointed out that the accumulation of
G-to-G data on the network carries an inherent risk of leakage ofconfidential information from suppliers.

Accumulating G-to-G data in a network...

•

While the G-to-G method creates the issue of retroactive data
disruption, the idea of each company uploading its own G-to-G
emissions data to the network and aggregating that data in someform is compatible with digital technology. In addition, unlike the Cto-G method, there is no need to calculate emissions from upstream
activities and the burden on suppliers is limited. Some in the SWG
felt that the G-to-G system should become the mainstream in future.

...

•

Tier 3-3

Set
manufacturer

G-to-G: Gate-to-gate emissions data

Figure 1-4-20 Gate-to-gate method and data confidentiality issues
Source: Created by Mizuho Research & Technologies

411-4. Ideas and direction of realization

Coexistence with existing methodologies and standards
1-4-7. Coexistence with existing methodologies and standards(1) Product-specific rules(2) Sector-specific rules(3) Cross-sectoral standards(1) Pathfinder Framework approach•••

In 1-4, it was noted that clarification was needed as to how the CO2
data calculation method described in this document would coexist
with existing methodologies and standards and what the division ofroles would be. To achieve this vision, this document follows the
PACT Pathfinder Framework concept.

PACT notes that the Pathfinder Framework method of calculating
CO2 data must be read in conjunction with existing methodologies
and standards for product carbon footprint assessment. In otherwords, the Pathfinder Framework is positioned as a document thatcomplements existing methodological standards.
Those existing methodologies and standards are classified into thefollowing three categories, with their relationship to the Pathfinder
Framework as shown in the table below.

•

The approach of Pathfinder Framework v2 can be summarized asfollows:‒ Where product-specific and sector-specific rules exist, theirapplication shall always be prioritized for PCF calculation,subject to a certain degree of consistency with the Pathfinder
Framework‒ Where generic cross-sectoral standards are used, priority
shall be given to Pathfinder Framework requirements• This document too adopts this approach for Product-based
calculations (see Section 2-2).

Product-specific rules

Sector-specific rules

Cross-sectoral standards

Hierarchy

1

2

3

OutlineCarbon footprint calculation rules for specific productcategories

Carbon footprint calculation rules for specific sectors

Generic standards for carbon footprint calculation,
not limited to a specific product category or sector

Rules(Example)

PEFCR (Product Environment Footprint Category
Rules)PCR (Product Category Rules)

Together for Sustainability(Product carbon footprint guidelines for the chemicalindustry)

ISO 14067:2018
GHG Protocol Product Standard

Requirements for claiming
compliance with Pathfinder
Framework

Product-specific rules that meet Pathfinder
Framework certification criteria can be used
independently*

Sector-specific rules that conform to the Pathfinder
Framework recommended. Highlight any aspects not
fully in alignment.

If there are differences, prioritize Pathfinder
Framework requirements* Pathfinder Framework qualification criteria (safeguards) for product-specific rules are noted in Section 2-2-2.

Figure 1-4-21 Relationship between Pathfinder Framework and existing methodologies
Source: Created by Mizuho Research & Technologies based on Pathfinder Framework v242

1-4. Ideas and direction of realization

Product-specific and sector-specific rules in Japan(2) Product-specific and sector-specific rules in Japan•

When applying the Pathfinder Framework v2 approach shown in
Figure 1-4-21 in Japan, it is necessary to determine whether theapplication of product-specific rules and sector-specific rules
developed in Japan will be prioritized over the Pathfinder
Framework.

•

This requires consultation with PACT and national organizations(described below), and a conclusion has not yet been reached.

•

Product-specific rules and sector-specific rules prioritized over the
Pathfinder Framework v2 and the Product-based calculations in thisdocument will be disclosed as discussions progress.

■ Product-specific rules•

One set of product-specific rules in Japan is the set of PCRs in the
SuMPO Environmental Label Program operated by the Japan
Sustainable Management Organization (SuMPO).

•

The SWG has started discussions with SuMPO, but we have come toshare the view that a lengthy discussion is necessary on how the
SuMPO Environmental Label Program PCRs will be positioned inrelation to the Pathfinder Framework and the CO2 Visualization
Framework.

•

Consultations with SuMPO will continue. We will also review anddiscuss with PACT how to certify product-specific rules prioritizedover the Pathfinder Framework.

■ Sector-specific rules•

Sector-specific rules in Japan include the Guidelines for Calculating
the Carbon Footprint of Products in the Chemical Industry(published in March 2023).

•

Industry rules based on the METI/MoE Carbon Footprint Guidelines
are being developed.

•

Pathfinder Framework v2 requires sector-specific rules to be
developed based on ISO and the GHG Protocol, etc., but does notprovide specific criteria for determining compliance.

•

We will continue to confirm and discuss with PACT the criteria for
determining which sector-specific rules will be prioritized over the
Pathfinder Framework, like the Together for Sustainability PCF
guidelines already approved by PACT.

43

1-4. Ideas and direction of realization

Relationship to cross-sectoral standards widely used in Japan(3) Relationship to cross-sectoral standards widely used in Japan•••

Framework and Section 2-2 of this document to determine themethodological differences in calculation and sharing (data provision).

Pathfinder Framework v2 gives ISO 14067:2018 and the GHG
Protocol Product Standard as representative cross-sectoral standards,(Figure 1-4-21). In Japan, the ISO standard is frequently referenced.

•

The METI/MoE Carbon Footprint Guidelines and the separate Carbon
Footprints Practical Guide, both of which are expected to bereferenced more and more by Japanese companies in the future, also
fall under the heading of cross-sectoral standards.

The handling of product-specific rules, sector-specific rules, andcross-sectoral standards developed in Japan is shown in Figure 1-422.

•

The main differences between the main cross-sectoral standards andPathfinder Framework v2 and this document are shown in Figure 14-20. Differences from the METI/MoE Carbon Footprint Guidelines
are described separately in the Appendix at the end of this document.

When companies that have conducted CO2 data calculations using
these cross-sectoral standards claim compliance with the Pathfinder
Framework, they need to apply the methodologies in the Pathfinder
Product-specific rules

Sector-specific rules

Cross-sectoral standards

Hierarchy

1

2

3

OutlineCarbon footprint calculation rules for specific productcategories

Rules(Example)

PEFCR (Product Environment Footprint Category Rules) Together for Sustainability
PCR (Product Category Rules)(Product carbon footprint guidelines for the chemicalindustry)

Handling of calculation
rules developed in Japan
Requirements for claiming
compliance with Pathfinder
Framework

Carbon footprint calculation rules for specific industries Generic standards for carbon footprint
calculation, not limited to a specific productcategory or industry

TBD(Discussions underway with SuMPO regarding thehandling of the set of PCRs under of the SuMPO
Environmental Label Program)

TBD(Plans to hold discussions with PACT on approval ofcarbon footprint calculation rules developed bydomestic industry associations)

Product-specific rules that meet Pathfinder Framework
certification criteria can be used independently*

Sector-specific rules that conform to the Pathfinder
Framework recommended. Indicate where not fullycompliant.

ISO 14067:2018
GHG Protocol Product Standard

METI/MoE Carbon Footprint Guidelines and theCarbon Footprints Practical Guide positioned as
cross-sectoral standards
If there are differences, prioritize Pathfinder
Framework requirements

Figure 1-4-22 Relationship between calculation rules developed in Japan and the Pathfinder Framework (Addition to Figure 1-4-19)* Pathfinder Framework qualification criteria (safeguards) for product-specific rules are noted in Section 2-2-2.

Source: Created by Mizuho Research & Technologies based on Pathfinder Framework v2

44

1-4. Ideas and direction of realization

Differences between Pathfinder Framework and major cross-sectoral standards◼
◼

The differences between the main cross-sectoral standards (ISO 14067:2018 and the GHG Protocol Product Standard) and the Pathfinder Framework v2 and theProduct-based calculation methodology shown in Section 2-2 of this document are summarized below.
When companies that have conducted CO2 data calculations using cross-sectoral standards claim compliance with the Pathfinder Framework, they need to apply
the methodology in the Pathfinder Framework and Section 2-2 to the methodological differences in calculation and sharing (data provision).

Cross-sectoral standards(ISO 14067:2018 and GHG Protocol Product Standard)

Pathfinder Framework v2 andSection 2-2 Product-based calculation
methodology

Boundary setting

Cradle-to-grave principle

Cradle-to-gate

Method of allocating emissions
related to recycling

In the case of the GHG Protocol:
Open loop recycling: Recycled content method*
Closed-loop recycling: Closed-loop approximation method*

Only applicable to recycled content method*

Upstream emissions fromtransportation fuel production

Need for calculation judged according to materiality

Calculation required

Available secondary data
databases

None specified

Database safeguards and databases fulfilling said
safeguards indicated

Exemption rule (cutoff rule)

Criteria for exemption (cut-off) not specified

Less than 1% per process and less than 5%
cumulatively of total emissions

Data quality assessment

In the case of the GHG Protocol:
For five indicators: technological representativeness, temporal
representativeness, geographical representativeness, completeness,and reliability
Four-point scale (Very good>Good>Fair>Poor)

Three-point scale (Good>Fair>Poor) for fiveindicators: technological representativeness, temporal
representativeness, geographical representativeness,completeness, and reliability* Further details of the recycled content method and the closed-loop approximation method are given in Section 2-2-5 (3).

Figure 1-4-23 Methodological differences between cross-sectoral standards and Pathfinder Framework v2 and Section 2-2
Source: Created by Mizuho Research & Technologies based on ISO 14067:2018, GHG Protocol "Product Standard," and Pathfinder Framework v245

1-4. Ideal shape and direction of realization

Limitations of the cradle-to-gate method
1-4-8. Additional measures for analysing emissions upstream in
the supply chain◼
◼

As in Figure 1-4-17, assumes a supply chain in which Tier 4 is at the top.
Example of a situation in which a C-to-G data exchange is performed(1) Limitations of the cradle-to-gate method••

While “Ideal Form: 6. Allow some level of data analysis" in thisdocument requires the protection of supplier companies’
confidential information, it also suggests that companies using data
should be able to analyze to some extent the emission structure
and potential for emissions reduction upstream in the supply chain.
Following in the footsteps of the Pathfinder Framework, the C-to-G
approach employed in this document is well suited to protecting theconfidential information of supplier companies but less suited todata analysis.

•

This is because even if multiple suppliers provide CO2 data basedon primary data, that data is aggregated into one value which data
users cannot analyze.

•

The structure of C-to-G CO2 data is shown in Figures 1-4-16 and 14-17, which illustrate the internal calculation structure (G-to-G +upstream emissions) when compiling C-to-G emissions data.

••

However, only the calculated C-to-G emissions data is actuallyprovided to downstream companies, and downstream data users
cannot perform “hot spot analysis” to identify large emission
sources.
This limitation in terms of data analysis is a challenge posed by the
C-to-G approach.

Tier 3Tier 4CompanyD

CO2 data calculatedby Company C andprovideddownstream

CO2 data calculatedby Company D andprovideddownstream

Company
B

CompanyAC-to-G

CO2 data calculatedby Company A andprovideddownstream

CO2 data calculatedby Company B andprovideddownstream

Tier 1

Tier 2CompanyC

Downstream
business
operatorG-to-G

Upstream emissions

Downstream
business
operator

C-to-G
G-to-G

Upstream emissions

Downstream
business
operator

C-to-G
Upstream
emissionsC-to-G
G-to-G

G-to-G

Downstream
business
operator

Only C-to-G emissions
can be seem from thedownstream side

Not a problem
because Company D
is at the top of the
supply chain

G-to-G: Gate-to-gate emission data; C-to-G: Cradle-to-gate emission data

Figure 1-4-24 Limitations of the cradle-to-gate method
Source: Created by Mizuho Research & Technologies

46

1-4. Ideal shape and direction of realization

Gate-to-gate combination for upstream emission structure analysis(2) Using the gate-to-gate method
•

•

•

•

•

•

In order to solve the problem presented on the previous page ofbeing unable to break down C-to-G data, this document introduces
a method based on the C-to-G method that adds in G-to-G data
provision.
Specifically, when a supplier provides C-to-G data to downstream
entities, it provides (i) its own G-to-G emissions data and(ii) C-to-G emissions data provided by upstream suppliers,
withholding company names (Figure 1-4-25).

As presented in 1-4-5, the G-to-G emission data to be provided isonly the output information (emissions, etc.) for CO2 data
calculation and does not include input information (consumption of
raw materials, etc.).
Also, the upstream emission data is the sum of the upstream
emissions of the supplier as a whole, and no individual emission
data prior to the total sum is presented. For example, in Figure 14-25, Company C's C-to-G emission data is provided to Company B,
but Company B only provides upstream emission data (the sum ofemissions from Company C and Company D) to Company A, andCompany C’s G-to-G emission data is not visible to Company A.
Downstream operators will be able to identify Tier 1 suppliers withparticularly high G-to-G emissions and encourage them to reducethem (supplier engagement). It is also possible to take theapproach of requesting Tier 1 suppliers with particularly large
upstream emissions to encourage upstream suppliers to reduce
their emissions (Figure 1-4-26).
This document identifies this G-to-G combination method as arecommendation.

◼
◼

As in Figure 1-4-17, assumes a supply chain in which Tier 4 is at the top.
Each company will provide G-to-G emissions and upstream emissions in addition to C-to-G
emissions.
Tier 3CompanyC

Tier 4CompanyD

CO2 data calculatedby Company C andprovideddownstream

CO2 data calculatedby Company D andprovideddownstream

Tier 1CompanyA
Downstream
business
operator

C-to-G

CO2 data calculatedby Company A andprovideddownstream

CO2 data calculatedby Company B andprovideddownstream

Tier 2CompanyB

G-to-G(CompanyA)

Upstream emissions

Downstream
business
operator

C-to-G

G-to-G(Company
B)

Upstream emissions

Downstream
business
operator

C-to-G
Upstream
emissionsC-to-G
G-to-G(CompanyD)

G-to-G(CompanyC)

What can be seen downstream:・ C-to-G emissions
・ G-to-G emissions from direct
suppliers
・Upstream emissions

Downstream
business
operator

At the top of the supply
chain, so C-to-G and G-to-G
are equivalentG-to-G: Gate-to-gate emission data; C-to-G: Cradle-to-gate emission data

Figure 1-4-25 Cradle-to-Gate method + Gate-to-Gate method
Source: Created by Mizuho Research & Technologies

47

1-4. Ideal shape and direction of realization

Illustration: G-to-G combination method and supplier engagement◼

This page demonstrates how the G-to-G combination method is utilized insupplier engagement.

◼

Assume that Set Manufacturer X procures Parts A, B, and C from three Tier
1 suppliers—Aa, Ab, and Ac—as shown on the right. Assume that Company
X is in a situation where it is considering which supplier to choose and what
request to make as supplier engagement for reducing Scope 3 Category 1
emissions.

◼

◼

◼

◼

◼

Engagement suppliers can be selected based on the scale of the C-to-G
emissions data for the parts they supply. Priority is given to suppliers thatprovide parts with high C-to-G emissions. (In this section, the total amountof emissions related to the parts obtained by multiplying the procurement
amount, rather than the emissions of the parts alone, is the subject ofconsideration. This is what is shown in the figure on the right.)
If Parts A and B have relatively large C-to-G emissions and Part C has
relatively small C-to-G emissions, then Aa and Ab will be given priority forengagement.
Company X will next consider the content of the reduction request toCompanies Aa and Ab. At this time, G-to-G data will be utilized.
Supplier Aa whose C-to-G emission data consists of G-to-G emission data
and upstream emission data, the former of which is larger, is requested toreduce its own G-to-G emissions. Supplier Ab, whose upstream emission
data is the the larger, will be asked to request cuts from their upstream
suppliers.
In response to the request to make reduction requests to its upstream
suppliers, Supplier Ab will implement the same approach to its upstream
suppliers as X did, and it is expected that this repetition will lead to
reduction requests reaching hot spots in the supply chain.

CO2 data for Part A

Request for Supplier
Aa to reduce its own
G-to-G emissions...

SupplierA

Emissionsvolume

Upstream emissions

C-to-GemissionsvolumeLarge G-to-G
emissions

Part A

CO2 data for Part B

Request for Supplier Ab
to request that its
suppliers makereductions...

SupplierAb

EmissionsvolumeC-to-GemissionsvolumeLarge
upstream
emissionsG-to-GemissionsvolumeSet
Manufacturer
X

Part B

CO2 data for Part C

Supplier Ac not included asa target of reduction
requests

EmissionsvolumeSmall C-to-G
emissions...

SupplierAc

Upstream
emissionsG-to-GemissionsvolumePart C

Figure 1-4-26 G-to-G combination method and supplier engagement
Source: Created by Mizuho Research & Technologies

48

1-4. Ideal shape and direction of realization

SWG discussion: (6) Another G-to-G combination method not adopted (1/2)•

There are two possible G-to-G combination methods: Method (A), in
which suppliers which calculate and provide CO2 data provide only
their own G-to-G emissions data downstream; and Method (B), in
which they also provide G-to-G emissions data provided fromupstream;•This document adopted (A) but also considered (B). For future
discussion, the content of considerations on (B) is recorded below.

•

The advantage of (B) is that downstream operators can understandthe G-to-G emissions of not only the direct supplier (Tier 1) but also
upstream suppliers (Tier 2 and Tier3, etc.) (Figure 1-4-27).

•

The difficulty with (B) is that it requires a mechanism to identify
where multiple G-to-G emissions data from upstream suppliers is
located in the supply chain tree.

••

As such a mechanism, the SWG devised a numbering rule whereby
each supplier assigns a number to its direct supplier and provides Gto-G emissions data downstream with these numbers attached(Figure 1-4-28). Based on the principle that no input information isprovided downstream (1-4-5), supplier names are notcommunicated.
However, this method also places a burden on suppliers and does
not resolve the problem of the increasing complexity of dataexchange. Some SWG members also suggested that if companies
had to go to such lengths, it would be better to formally obtaintraceability. The SWG consequently decided not to adopt Method (B).

◼
◼

As in Figure 1-4-17, assumes a supply chain in which Tier 4 is at the top.
Considers a case where all suppliers provide G-to-G data in addition to C-to-G data.
Tier 4CompanyD

CO2 data calculatedby Company A andprovideddownstream

CO2 data
calculated byCompany B andprovideddownstream

CO2 data
calculated byCompany C andprovideddownstream

CO2 data
calculated byCompany D andprovideddownstream

Tier 3CompanyC

Tier 2Company
B

Tier 1CompanyA
Downstream
business
operator

C-to-G
G-to-G(No names)

G-to-G

G-to-G(No names)(No names)

G-to-G(CompanyA)
Downstream
business
operator

C-to-G
G-to-G(No name)

G-to-G(No names)

G-to-G(Company
B)
Downstream
business
operator

C-to-G
G-to-G(No names)

C-to-G
G-to-G(CompanyD)

G-to-G(CompanyC)
Downstream
business
operator

What can be seen
downstream:・ C-to-G emissions
・ G-to-G emissions fromdirect suppliers・Upstream G-to-G emissions(names concealed)

At the top of the
supply chain, so C-toG and G-to-G areequivalentG-to-G: Gate-to-gate emission data; C-to-G: Cradle-to-gate emission data

Figure 1-4-27 C-to-G method + G-to-G method
Source: Created by Mizuho Research & Technologies491-4. Ideal shape and direction of realization

SWG discussion: (6) Another G-to-G combination method not adopted (2/2)
In order to implement the G-to-G combination method B (G-to-G emission data provided from upstream is also provided downstream), a mechanism is required
to identify where multiple G-to-G emission data provided by upstream suppliers is located in the supply chain tree.
As such a mechanism, the SWG examined a numbering system whereby each supplier numbers its direct supplier (Tier 1) and provides this number downstream
attached to G-to-G emission data. This is done by each tier of suppliers, resulting in each set of G-to-G emission data being accompanied by a number and ahierarchical structure indicating its position in the supply chain.
However, this numbering system too places a burden on suppliers and does not resolve the problem of the increasing complexity of data exchange, so the SWG
decided not to adopt it.

◼
◼

◼

Branching supply chain model

Numbering of upstream suppliers

The diagram models a branching supply chain.

Each supplier numbers its direct upstream suppliers(only suppliers that provide G-to-G emission data
can do so) and provides that number downstream.

Company D
numbering

Tier 4Tier 3Tier 2Tier 1

Tier 01Company B
numbering1

Company A Company X
numbering numbering

1

1

...
Company F Company D Company B Company A Company X...

Company G

Company G

Company E
numbering

...

1

...

Company H

Company E

Company H

...

...

Company I

2

...
...

Company C

Downstream operators can see the number attached to each tierfor each supplier, which shows the branching structure of the
supply chain and the location of each supplier.
Examples:• Company D is identified as Tier 3 because of the number attached byTier 2.
• Because Company B has the same number attached by Tier 0 as
Company A, it can be seen that A is an upstream supplier.
No. attachedby Tier 0

No. attached byTier 1

No. attached byTier 2

No. attachedby Tier 3

Company A

1

―

―

―

Company B

1

1

―

―

Company C

1

2

―

―

Company D

1

1

1

―

CompanyE

1

1

2

―

Company F

1

1

1

1

Company G

1

1

1

2

Company H

1

1

2

1

Company I

1

1

2

2

Company F Company D Company B Company A Company X

2...

Number of each supplier visible to Company X

Company I

2Company E

2Company C

Source: Created by Mizuho Research & Technologies

Figure 1-4-28 Reproducing the supply chain structure by numbering upstream suppliers501-5. CO2 visualization roadmap

CO2 visualization roadmap
1-5. CO2 visualization roadmap•

In addition to delineating the goals of CO2 calculation and sharing,
the SWG discussed the importance of considering a transitional stage
based on the current situation. Specifically, the following three points
were raised.

(2) Companies that have already implemented some form ofOrganization-based calculation•

Companies that have already implemented some form ofOrganization-based calculation (i.e., calculation of CO2 data for eachproduct and transaction using Scope 1, 2, and 3 emissions) will firstwork to provide data to downstream companies in line with the data
disclosure elements described in Section 3 of this document.

•

Subsequent transition is recommended, however, to a calculation
method with higher data quality (appropriate process subdivision andallocation) as described in 2-3 and to Product-based calculation as
described in 2-2.

‒ Advances in CO2 data calculation methods‒ Expansion of tiers linked with primary data
‒ Evolution of data collection methods within companies
1-5-1. Advances in CO2 data calculation methods••

As already indicated, Product-based calculation is prioritized overOrganization-based calculation in CO2 data calculation, and when it
comes to Product-based calculation, the application of calculation
methods based on the Pathfinder Framework is recommended.

(3) Companies that have not yet begun calculating CO2 data•

However, depending on the current state of the company working on
CO2 data calculations, the route to Pathfinder Framework-compliant
calculations will vary.

For companies that have not yet started to calculate CO2 data, there
are two approaches.

•

One is first to calculate the Scope 1, 2, and 3 emissions of thecompany as an organization, then proceed to Organization-based
calculation, using that data to participate in data exchange within the
supply chain. The company would then consider moving to Productbased calculation in line with the wishes of downstream companies.

•

The other is to undertake Product-based calculation from the outset.
In so doing, it would be best to calculate CO2 data in compliancewith the Pathfinder Framework noted in Section 2.2, but where thisis difficult, the company could begin with G-to-G calculation (see 1-46 (4)). However, if a downstream company uses this data for its own
Scope 3 calculations, it must calculate and supplement emissions
from upstream activities.

(1) Companies that have already implemented some form of
Product-based calculation•

Companies that have already implemented some form of Productbased calculation will first need to share the results of their current
calculation with downstream operators in line with the data
disclosure elements described in Section 3 of this document.

•

After participating in data exchange over the supply chain, they will
likely transition to the Pathfinder Framework-based CO2 data
calculation methodology described in Section 2-2.

51

1-5. CO2 visualization roadmap

CO2 visualization roadmap
1-5-2. Expansion of tiers connected by primary data•

At the beginning of this section, Figure 1-1-2 presented an image ofall players in the supply chain calculating and exchanging CO2 data,
and this is certainly the end-goal.

•

In reality, most companies have yet to receive CO2 data based on
primary data from direct suppliers (Tier 1), so their first step in thetransition period will be to exchange data with Tier 1.

•

Next, it will be important to aim for a situation where CO2 data canbe collected based on primary data from Tier 2 and 3 upstream
suppliers via Tier 1.

•

Once connections have been created at the various points in the
supply chain to exchange data over two or three tiers, theseconnections will connect with each other, leading to a stage in whichdata linkage progresses dramatically.

real-time data collection.
•

Instead, some SWG members argued that data collection from eachin-house system/database (environmental management system,
procurement database, etc.) is necessary to calculate CO2 data inthe cradle-to-gate method of Product-based calculation inaccordance with the Pathfinder Framework, and that it is more
important to build a mechanism utilizing digital technology forcollection and aggregation.

•

Therefore, as a roadmap for CO2 visualization, it will be importantto promote cooperation with multiple systems and databases within
a company using digital technology to calculate CO2 data, while
promoting automated and real-time data collection on productionlines, etc.

•

In the future, real-time data collected by sensors will flow into
companies’ internal data connection platforms.

1-5-3. Evolution of data collection methods within companies•

Based on the theme of using digital technology for CO2 visualization,
the Green x Digital Consortium Visualization WG has discussed theideal image of automated and real-time data collection and CO2
data calculation using sensors.

•

However, in our survey of existing standards, it was confirmed thateven PACT’s Pathfinder Framework, which is at the forefront of thiswork, is still at the stage of reaffirming the traditional LCA approachof identifying the annual average value of activity data by sortingout the existing LCA methodology and standards for calculating CO2
data. It has not yet reached the stage of examining automated and52

1-5. CO2 visualization roadmap

CO2 visualization roadmap
1-5-4. Creating a roadmap for CO2 visualization•companies.

The CO2 visualization roadmap shown in Figure 1-5-1 draws on
discussions to date, prepared from the three perspectives ofprogress in CO2 data calculation methods, expansion of tiers linked
by primary data, and evolution in data collection methods within

Roadmap element

CO2 data
calculation
method•We hope that this will serve as a reference for progress in theefforts of each company.

Transitional period

Current status

Ideal image

Product-based
calculation launched

Implementing some kind of
Product-based calculation

Disclosing data quality andproviding data to
downstream businesses

Organization-based
calculation launched

Implementing some kind of
Organization-based calculation

Disclosing data quality andproviding data to
downstream businesses

Transition to
Product-based calculation
High-quality
Organization-based calculation

Calculation of Scope 1, 2, and3 emissions

Organization-based calculation+ data quality disclosure

Product-based calculation
using gate-to-gate method

Product-based calculation
using cradle-to-gate method

Implementation of Pathfinder
Framework-compliant
Product-based calculation

Not launched

Not yet implementing
CO2 calculation

Perform Pathfinder Framework-compliant Product-based calculations
Implementation of Pathfinder
Framework-compliant
Product-based calculation
Some kind of
Product-based
calculation

Pathfinder
Framework
compliance

Tiers linked with primary dat

Few primary data linkage initiatives

Connect with primary data up
to Tier 1

Connect with primarydata up to Tiers 2 and 3

Connect with primary data through to the
top of the supply chain

Data collection method

Linkage with environmental
management system, etc. (manual)

Digital linkage with eachinhouse system

Automatic data
aggregation from sensors

Real-time CO2 data calculation based on
automated data aggregation from sensors(activity)

Figure 1-5-1 Road map for CO2 visualization progress
Source: Created by Mizuho Research & Technologies

It should be noted that, as stated above in 1-1-5, "CO2" or "CO2 data" in this Roadmap (1) refers to theCO2 equivalent of greenhouse gas emissions (expressed as kg-CO2e, etc.) as defined by the IPCC, and is
not limited only to CO2 emissions; and (2) the life cycle boundary for calculating emissions is, in principle,
cradle-to-gate unless otherwise specified.

53

2. CO2 data calculation methods

2-1. Two CO2 data calculation methods

Two CO2 data calculation methods
2-1. Two CO2 data calculation methods•

This chapter presents the Green x Digital Consortium’s
recommended calculation methods for CO2 data provided bysupplier companies for downstream companies to calculate Scope 3
Category 1 emissions.

•

As shown in 1-4-2, calculation methods are presented for two typesof calculation: calculation based on product data (Product-based
calculation) and calculation based on organizational data
(Organization-based calculation).

Product-based calculation

Organization-based calculation

Conduct lifecycle inventory analysis of greenhouse gas emissions byproduct and service

Allocated calculation of Scope 1, 2 and 3 emissions data as anorganization by customer(Example: Allocation proportional to delivery amount)

Step 4Rawmaterial 4

Step 5Rawmaterial 5

Step 5Rawmaterial 6

・・・

Raw
material 1

Process0

Products

Scope 3 upstream
C1

Step 2Raw
Material 2

Step 3Rawmaterial 3C2

C3 ・・・ C8

Scope
1 and 2Extract and provide data・・・
on amount delivered toCompany X

CO2 data for
products for
supply to
Customer X

・・・

Identify key processes in the
product life cycle and total theemissions from each process

Step 1Figure 2-1-1 Overview of Product-based calculation and Organization-based calculation (Excerpt from Figure 1-4-4)
Source: Created by Mizuho Research & Technologies

552-1. Two CO2 data calculation methods

Two CO2 data calculation methods
2-1-1. Product-based calculation

2-1-2. Organization-based calculation•

Product-based calculation methods that comply with PACT’s
Pathfinder Framework are presented in 2-2 in order to realizeinternationally acceptable calculation methods and data quality.

•

We aim to achieve a situation whereby, by following this document,
companies can state that they have made calculations inaccordance with the Pathfinder Framework. We are currently
coordinating Edition 2 with PACT toward receiving approval foralignment with the Pathfinder Framework.

•

For Organization-based calculation, guidance for calculating CO2
data based on the level of data management in the digital age ispresented in 2-3 based on Chapter 8 of the GHG Protocol Scope 3
Standard.

•

Because this document takes the position of recommending a
gradual shift from Organization-based calculation to Product-based
calculation (1-4-2), the methodology of Organization-based
calculation is positioned as a recommendation to improve data
quality.

CO2 data calculation
based on product data
GD Consortium
CO2 data
sharing
guidelines
Data can beshared premisedon data quality
disclosure

GD Consortium
CO2 calculation
methodInternationallyacceptable
methodology and data
quality

Product-based calculation
method consistent with
Pathfinder Framework
Recommendations for
improving data quality inorganization-based
calculations

2-2. CO2 calculation
method based on
product data

2-3. CO2 calculation
method based onorganizational data

CO2 data calculation
based on organization data

Figure 2-1-2 Positioning in this document of the Product-based and Organization-based calculation methods (Figure 1-4-9)
Source: Created by Mizuho Research & Technologies

56

2-1. Two CO2 data calculation methods

Mixing of CO2 data calculation methods (1/2)
2-1-3. Relationship between the two CO2 data calculation
methods(1) Application priority•

activities calculated at product level.
•

In general, Organization-based calculation includes calculation toassign organizational data to target products by allocation
calculation, so calculation results are often mixed with data related
to products other than the target products. Compared to Productbased calculations, which utilize data directly related to the target
product or service, data for the target product tends to be lessspecific.

•

As noted in Section 2-3 of this document, the DQRs fororganization-based calcuation are less stringent than for Productbased calcuation.

•

Therefore, it could be considered more appropriate to use
secondary data generated through the Product-based calculation
approach than CO2 data produced through Organization-based
calculation, which is likely to remain at that level.

•

However, one view is that the CO2 data from Organization-based
calculation is superior to the secondary data produced through theProduct-based calculation approach in that it reflects the actual
situation of the supplier.

•

Based on SWG discussion, this document handles this issue asfollows: (PTO)

As noted in 1-4-2, this document affirms the following position
regarding the order of priority of Product-based and Organizationbased calculations:①②

In view of the fact that Organization-based calculation of CO2
data is widely implemented in practice, companies may
calculate and share such data to the extent that they explicitly
state that it has not been produced through Product-based
calculation.
However, we consider Organization-based calculation to be aprovisional method and recommend a gradual transition to
Product-based calculation.

(2) Mixing calculation methods•

Allowing the application of Organization-based calculation creates anissue that does not arise in the Pathfinder Framework: whether toallow a mixture of CO2 data from Organization-based calculationand from Product-based calculation.

•

First, in Organization-based calculations, the use of CO2 data from
Product-based calculations in the calculation of emissions fromupstream activities is unproblematic. The application of CO2 datafrom Product-based calculation in the calculation of Scope 3
emissions, as organizational data is permitted under the GHC
Protocol Scope 3 Standard.

•

However, problems do arise when CO2 data from Organizationbased calculation is used to calculate emissions from upstream

572-1. Two CO2 data calculation methods

Mixing of CO2 data calculation methods (2/2)(2) Mixing of calculation methods (continued)

•

•

•

a.

The use of Organization-based CO2 data for the Productbased calculation of emissions from upstream activities isconditionally permitted under two conditions:b.

Condition 1: That Organization-based CO2 data shall betreated as non-primary data (PDS=0) in Product-based
calculation.

c.

Condition 2: The DQR status of the Organization-based
calculation shall be ND (“No data to report”).

Organization-based calculation
Product-based
CO2 data

Data may be used
Organization-based
CO2 data

In other words, while it is permissible to use Organization-based
CO2 data for the Product-based calculation of emissions fromupstream activities, this will not be treated in the same way as
Product-based CO2 data in terms of the PDS and DQRs.
In this document, we have adopted the policy of not introducing
PDS as a data disclosure element for Organization-based
calculations (see 2-3-2 (6)). At present, Organization-based CO2
data is exchanged without a PDS. Downstream operators
performing Product-based calculation will supply and receive thisdata with the PDS as 0.
In addition, despite the first condition that Organization-based data
be treated as non-primary data, in the data hierarchy for Productbased calculation shown in 2-2-6, it is positioned as secondary data
if secondary data requirements can be met, and as proxy data if
they can’t.

Emissionsfrom
upstream
activity

G-to-Gemissions

Data may be used

PDS and DQR both carry over

Product-based calculation
Product-based
CO2 data

Data may be used

Organization-based
CO2 data

Emissionsfrom
upstream
activity

G-to-Gemissions

Conditional use
Condition 1: Treated as non-primary data handling (PDS=0)
Condition 2: The DQR is ND

Figure 2-1-3 Approach when Product-based and Organizationbased calculations are mixed
Source: Created by Mizuho Research & Technologies582-1. Two CO2 data calculation methods

For gate-to-gate only
2-1-4. For gate-to-gate only•

As previously noted in 1-4-6 (4), this document allows companies
that cannot comply with the cradle-to-gate method to calculate CO2
data using the gate-to-gate method.
‒

‒

•

•

Tier 2The Product-based calculation shown in 2-2 will be a gateto-gate method calculation if it is calculated for direct
activities.
The Organization-based calculation shown in 2-3 is a gateto-gate calculation if the allocation target is only Scope 1
and 2 emissions.

However, since gate-to-gate CO2 data does not include emissions
upstream from the supplier, downstream companies using the datacannot cover emissions upstream in the supply chain. Downstream
operators using that data are required to understand and utilize theimperfections of boundaries.
Ideally, downstream entities using the G-to-G data should calculate
emissions from the upstream activities of the supplier on theirbehalf.

...
C-to-G
Usually, Supplier A calculates
CO2 data using the C-to-G
method and provides this tocompanies downstream

Tier 1CompanyB

Calculation byCompany A

Emissions from upstream
activities(Full upstream cover)Dataprovision

G-to-G

Calculation byCompany A

Suppliers that cannot use theC-to-G format are allowed to
calculate CO2 data in the Gto-G format

G-to-G[Product-based
calculation]
Calculation of direct
activities
However, companies using
data on emissions fromupstream activities should
complement this by making
calculations on behalf of theabove suppliersCompany
using data

CompanyA

Calculation by company
using the data
Emissions from upstream
activities(Full upstream cover)Dataprovision[Organization-based
calculation]
Scope 1 and Scope 2
allocated

Dataacquisition

G-to-G: Gate-to-gate emissions data
C-to-G: Cradle-to-gate emissiosn data

Figure 2-1-4 When companies cannot use the cradle-togate method (Figure 1-4-19)
Source: Created by Mizuho Research & Technologies592-1. Two CO2 data calculation methods

Requirements for the calculation and sharing methods described in this document
2-1-5. Requirements for the calculation and sharing methods
described in this document•

The requirements for the CO2 data calculation and sharing method
described in this document are as follows.

•“Shall”:
Indicates which rules need to be followed

Requirement level

Productbased
calculation“Shall”✓

Organization-basedcalculation✓•“Should”:
Indicates which rules are recommendations•“May”:
Indicates an option that is permissible or allowable"Should"✓✓•

The level of requirement depends on the CO2 calculation andsharing method.

“May"

✓

✓

‒

Product-based calculations are given as “shall,” “should,” or“may.”‒

Organization-based calculations are presented as “should” or“may” because they are permitted from an inclusive
perspective.

‒

Responses to disclosure elements when sharing calculation
results are shown as either "shall" or "should" in both
Product-based and Organization-based calculations.

Response todata
disclosure
elements✓

Figure 2-1-5 Requirements for calculation and sharing methods

602-1. Two CO2 data calculation methods

PCF notation
2-1-6. Adoption of PCF notation•

Where this document has thus far referred to Product-based C-to-G
GHG emissions as Product-based CO2 data, henceforth we will
follow the Pathfinder Framework in referring to this as the Product
Carbon Footprint (PCF).

•

This is because Product-based CO2 data accords with the PCF. In
Japan, the PCF is often called the Carbon Footprint of Products(CFP) in line with ISO 14067:2018. Note that these terms denote
exactly the same concept.

Product-based
CO2 data•

Although many researchers use PCF as an abbreviation for Partial
Carbon Footprint, PCF in this document is used only as anabbreviation for Product Carbon Footprint.

organization-based
CO2 data•

organization-based CO2 data, on the other hand, is not always
disaggregated as far as emissions data for individual product units,
but rather often compiled as data per annual transaction volume(transaction value). In addition, when the data is exchanged as
emission data per product unit, this does not comply with ISO
14067:2018 and other standards for carbon footprint calculation.
(Where it can be considered compliant, it will be positioned in thisdocument as Product-based data.)

Product Carbon Footprint
(PCF)

•

Therefore, as it is not necessarily appropriate to call organizationbased CO2 data the PCF, this document will continue to use theterm organization-based CO2 data.

Hereafter referred to as "PCF"
・PCF= Product Carbon Footprint

Still referred to as organizationbased CO2 data.
・Not necessarily product unit
calculations
・Does not comply with PCF calculation
standards

Carbon Footprint of Products(CFP)

Figure 2-1-6 Use of the term PCF

61

2. CO2 data calculation methods

2-2. Product-based calculation method

2-2. Product-based calculation method

Structure of methodological explanation of Product-based calculation
2-2. Product-based calculation method
•

•

•

•

Section 2-2 presents the Green x Digital Consortium’s Productbased calculation method, which, as noted earlier, is based on
Pathfinder Framework v2. Pathfinder Framework requirements are
explained, along with guidance to help Japanese companies apply
the framework within Japan’s institutional and data environment.

Pathfinder Framework v2 chapter structure

Section 3:
Emissionsaccounting

Scope and boundary

Calculating productcarbon footprints

The explanation is organized as follows.
•

2-2-1: Pathfinder Framework v2 requirements•

2-2-2 to 2-2-8: Green x Digital Consortium rules

Existing methods andstandards‒ Section 5: Assurance and verification → Chapter 4: Verification ofCO2 data

2-2-2: Existing methods and standards(1) Positioning of existing methods andstandards(2) Quality safeguards for product-specific rules
2-2-3: Scope and boundary(1) Process to be calculated(2) Boundary(3) Target GHG and global warming potential(4) Calculation unit

2-2-4: PCF calculation steps(1) Data identification(2) Calculation(3) Allocation

This section explains how CO2 data is calculated. It corresponds to
Section 3 (Emissions accounting) and Section 4 (Data integrity) in
the Pathfinder Framework v2 (details shown on the right).
The remaining sections of the Pathfinder Framework v2 correspondto the framework in this document as follows:

Structure of this section

2-2-5: Additional guidance(1) Biogenic emissions and removals(2) Handling of transport process emissions(3) Handling of waste discharged frommanufacturing processes

Section 4:
Data
integrity

Data sources andhierarchy‒ Section 6: Data exchange → Chapter 3: CO2 data sharing
methods
Data reliability

2-2-6: Data sources and hierarchy(1) Pathfinder Framework(2) Secondary databases in Japan
2-2-7: Handling of certificates and credits,
etc.
(1) Energy certificates (purchased byconsumers)(2) Carbon credits(3) Mass balance approach
2-2-8: Data reliability(1) Primary data share(2) DQR

Figure 2-2-1 Correspondence between Pathfinder Framework v2 and this section
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v263

2-2. Product-based calculation method

Overview of Pathfinder Framework v2 requirements (1)2-2-1. Overview of Pathfinder Framework requirements•

Pathfinder Framework v2 requirements are as below.

•

The Product-based calculation methodology presented in thissection also requires parties calculating CO2 data to comply with
the Pathfinder Framework requirements.

(1) Existing
methods andstandards•

However, in order for Japanese companies to comply with therequirements of the Pathfinder Framework, interpretation andexplanation based on Japan’s unique institutional environment anddata environment are required. This is provided in Sections 2-2-2
to 2-2-8.

•

The Pathfinder Framework shall be read in conjunction with existing methods and standards for the assessment of
PCFs.

•

PCRs or sector-specific rules shall be prioritized for the calculation and allocation of PCFs.

•

PCRs shall only be considered valid if they comply with the Pathfinder Framework’s quality safeguards.

•

If multiple PCRs are applicable, companies shall follow the PCR hierarchy laid out by the Pathfinder Framework.

•

Where no regulations or product- or sector-specific rules exist, companies shall follow the Pathfinder Framework
requirements.

•

For elements not specifically addressed by the Pathfinder•

Framework, the PCF calculation shall be compliant with the sector-agnostic standards.

Source: Created by Mizuho Research & Technologies from Pathfinder Framework v264

2-2. Product-based calculation method

Overview of Pathfinder Framework v2 requirements (2)• Companies shall account for all GHGs identified within the GHG Protocol.

(2) Scope andboundary• Their respective 100-year global warming potential (including carbon feedbacks) shall be derived from the latest(IPCC) Assessment• Companies shall report cradle-to-gate PCF, comprising all upstream stages of the product life cycle up to thereporting company’s gate (including upstream transportation), excluding downstream emissions from product use
and end-of-life• PCFs shall be exchanged upstream to downstream, providing kg of CO2e per unit of analysis.

• All attributable processes shall be identified.
• Companies shall collect relevant activity data and emission factors based on identified attributable processes.

(3) Guidancefor PCFs

Accounting
for product
GHG
emissions• Manufacturing of production equipment, buildings and other capital goods, business travel by personnel, travel
to and from work by personnel, and research and development activities should not be included within theboundaries of the PCF, unless materially significant.
• Companies shall be able to exclude individual attributable processes representing less than 1% of the total
cradle-to-gate PCF.
• In aggregate, exclusions shall represent less than 5% of the total cradle-to-gate PCF emissions.
• If necessary: Allocation of emissions to outputs should follow the allocation hierarchy of the Pathfinder
Framework.

Source: Created by Mizuho Research & Technologies from Pathfinder Framework v265

2-2. Product-based calculation method

Overview of Pathfinder Framework v2 requirements (3)[Biogenic emissions and removals]• Biogenic emissions and removals associated with the following shall be calculated and included as part of
the “PCF (incl. biogenic emissions and removals)” metric from 2025 onwards:—Direct land-use change (dLUC)—Land-management-related changes (including land carbon pools and other non-CO2 emissions related toland management)(3) Guidancefor PCFs

Additional
guidance—Other biogenic GHG emissions not covered in dLUC and land management—Biogenic CO2 withdrawals•

The biogenic carbon content in the product (mass of carbon) shall be calculated and reported
separately as part of the data exchange form.

• GHG emissions associated with iLUC emissions may be calculated and reported separately as part of thedata exchange form. iLUC emissions shall not be included as part of the PCF.

• To support transparency, all of the metrics shall also be reported separately, regardless of whether they
are included in the PCF or not.
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v266

2-2. Product-based calculation method

Overview of Pathfinder Framework v2 requirements (4)[Transportation emissions]• Upstream and direct transportation emissions within the cradle-to-gate boundary, including storage, shall becalculated and included in the PCF.
• Only transportation emissions relating to the fuel—also known as well-to-wheel emissions—and the energy
consumed by storage facilities shall be included (i.e., the manufacturing of the vehicles used for the transport ofgoods shall not be included).

(3)
Guidancefor PCFs

Additional
guidance[Waste treatment and recycling emissions]• All production emissions shall be allocated to the outputs with economic value, rather than to the waste or
recyclable material itself• Emissions resulting from waste treatment as part of the production process shall be calculated and included in the
PCF of the company that manufactured the product and generated the waste.
• Emissions from the end-of-life stage of the products shall not be included in the PCF boundary.

• Since the Pathfinder Framework’s boundary is cradle-to-gate, the “recycled content” method should be used forthe allocation of emissions from recycling materials and energy recovery.

Source: Created by Mizuho Research & Technologies from Pathfinder Framework v267

2-2. Product-based calculation method

Overview of Pathfinder Framework v2 requirements (5)(4) Data
sources andhierarchy(5) Data
reliability(6) Assurance
and verification• Pathfinder Framework definitions shall be used by companies to determine the nature of activity data and emissions.
• Activity data that is used to calculate PCF shall be company-specific.
• Secondary emission factors used shall be compliant with Pathfinder Framework safeguards.
• Companies may use proxy data to bridge minor data gaps.

• Companies shall either assess the primary data share (PDS) or the data quality of the PCF until 2025; after 2025,
both KPIs shall be calculated and exchanged.
• If calculated, the PDS shall be based on both the nature of the activity data and the emission factors used.
• If calculated, the data quality ratings (DQRs) shall use the Framework’s data quality assessment matrix, excluding
any inputs representing less than 5% of the total PCF.

• Verification of the PCF shall be done by an independent third party following the considerations laid out in the
Pathfinder Framework’s roadmap.

Source: Created by Mizuho Research & Technologies from Pathfinder Framework v268

2-2. Product-based calculation method

Overview of Pathfinder Framework v2 requirements (6)(7) Data
exchange• Data owners shall exchange their cradle-to-gate PCFs alongside a set of minimum required data elements listed by
the Pathfinder Framework downstream in the value chain.

(8) Connecting
throughtechnology• Companies that have calculated their PCFs should exchange these using the Pathfinder Network.

(9)
Incorporating
Product-based
data into Scope
3 calculations• Companies should incorporate PCFs into their corporate Scope 3 footprints by multiplying the PCFs provided bysuppliers with the number of product units purchased from them.

Source: Created by Mizuho Research & Technologies from Pathfinder Framework v269

2-2. Product-based calculation method

Relationship to existing methods and standards
2-2-2: Relationship to existing methods and standards•

Pathfinder Framework requirements•

The Pathfinder Framework shall be read in conjunction with existing
methods and standards for PCF assessment.

•

PCRs or sector-specific rules shall be prioritized for the calculation
and allocation of PCFs.

•

For elements not specifically addressed by the Pathfinder
Framework, the PCF calculation shall be compliant with the sectoragnostic standards(1) Relationship to existing methods and standards•

As noted in 1-4-7, the Pathfinder Framework is intended to be usedin conjunction with existing methodologies and standards and setsout a hierarchy for the application of existing methodologies andstandards (see Figure 2-2-2).

PCRs shall only be considered valid if they comply with thePathfinder Framework’s quality safeguards.

•

PCRs or sector-specific rules shall be prioritized over the Pathfinder
Framework for the calculation and allocation of PCFs.

•

If multiple PCRs are applicable, companies shall follow the PCR
hierarchy laid out by the Pathfinder Framework.

•

Where no regulations or product- or sector-specific rules exist,
companies shall follow the Pathfinder Framework requirements.

•

Where no regulations or product- or sector-specific rules exist,
companies shall follow the Pathfinder Framework requirements.

•

The GD Consortium’s Product-based calculation in this section also
adopts this approach.

Hierarchy

Product-specific rules

Sector-specific rules

Cross-sectoral standards

1

2

3

OutlineCarbon footprint calculation rules for specific productcategories

Rule(Example)

PEFCR (Product Environment Footprint Category Rules) Together for Sustainability
PCR (Product Category Rules)(Product carbon footprint guidelines for the chemicalindustry)

Requirements for claiming
Product-specific rules that meet Pathfinder Frameworkcompliance with Pathfinder
certification criteria can be used independently*
Framework

Carbon footprint calculation rules for specific sectors

Sector-specific rules that align to the Pathfinder
Framework recommended. Highlight any aspects not fully
in alignment.

Generic standards for carbon footprint
calculation, not limited to a specific productcategory or sector
ISO 14067:2018
GHG Protocol Product Standard
If there are differences, prioritize Pathfinder
Framework requirements
Source: Created by Mizuho Research &Figure 2-2-2 Relationship between Pathfinder Framework and existing methodologies (Figure 1-4-21) Technologies based on Pathfinder
Framework v270

2-2. Product-based calculation method

Product-specific rules in Japan(2) Existing methods and standards in Japan•

In order to identify the hierarchy of existing methods and standards
shown in Figure 2-2-2 for Product-based calculations, we need to
specify what constitutes existing methods and standards in Japan.

•

This has already been outlined in 1-4-7, but is presented again
below.

Reference: PACT quality safeguards for product-specific rules•a. PCRs shall be developed in accordance with the ISO 14000
series or other cross-sectoral guidance to be considered aneligible PCR.

① Product-specific rules in Japan
•

•

•

•

b. PCRs shall be developed through a multistakeholder process
and independently peer reviewed

One set of product-specific rules in Japan is the set of PCRs in the
SuMPO Environmental Label Program operated by the Japan
Sustainable Management Organization (SuMPO).
After consultations with SuMPO, we have reached the view thatongoing consultations will be needed on how the SuMPO EPD PCRs
will be positioned in relation to the Pathfinder Framework and theCO2 Visualization Framework.
There are consequently no product-specific rules specific to Japanat present that should be take precedence over the Pathfinder
Framework and the Product-based calculation covered in thissection.

Pathfinder Framework v2 states that product-specific rules mustmeet the following quality safeguards:c. PCRs shall be reviewed at least every five years.
d. PCRs shall be applicable to the geography where theproduct is being marketed or produced.

•

The above are important requirements to be met by productspecific rules, but they are only external and do not go into
methodology.

•

Therefore, even product-specific rules that meet theserequirements may not be consistent with the calculation
methodology proposed by the Pathfinder Framework, whichassumes cradle-to-gate data exchange in the supply chain.

•

The SWG discussed whether product-specific rules should havemethodological similarities to the Pathfinder Framework in addition
to the quality safeguards described above.

•

We plan to exchange views with PACT on this point.

Consultations with SuMPO will continue.

71

2-2. Product-based calculation method

Sector-specific rules and cross-sectoral standards in Japan(2) Existing methods and standards in Japan➁ Sector-specific rules in Japan③ Cross-sectoral standards in Japan•

Sector-specific rules must be applied to PCF calculation second inorder of priority after product-specific rules.

••

In Japan, there are sector-specific rules such as the Guidelines for
Calculating the Carbon Footprint of Products in the Chemical
Industry (March 2023). In the future, sectoral rules are expected to
be developed based on the METI/Moe Carbon Footprint Guidelines.

ISO 14067:2018 and the GHG Protocol Product Standard areprominent cross-sectoral standards for PCF calculation. In Japan,
the former is often referred to.

•

The METI/MoE Carbon Footprint Guidelines and Carbon Footprints
Practical Guide were released in May 2023. The Carbon Footprint
Guidelines are also a cross-sectoral standard in the sense that they
provide a general methodology for PCF without specifying aparticular industry.

•

Companies that use these cross-sectoral standards to calculate CO2
data must comply with the Pathfinder Framework. In the case of
methodological differences in calculation and sharing (dataprovision), the methodology of the Pathfinder Framework andSection 2-2 of this document must be applied.

•

On the other hand, Pathfinder Framework v2 requires sectorspecific rules to be developed based on ISO and the GHG Protocol,
etc., but does not provide specific criteria for determining
compliance.

•

We will continue to confirm and consult with PACT on the criteria
for determining which sector-specific rules should be given
precedence over the Pathfinder Framework, as in the Together for
Sustainability PCF guidelines already approved by PACT.

•

There are consequently no sector-specific rules specific to Japan atpresent that should be given precedence over the Pathfinder
Framework and the Product-based calculation covered in thissection.

72

2-2. Product-based calculation method

Illustration: Relationship to existing methods and standards◼
◼
◼
◼

It is assumed that the Product-based calculation methodology in this section, as well as the Pathfinder Framework v2, will be used in conjunction with existing PCF
calculation methods and standards.
The hierarchy for applying existing calculation methods and standards is product-specific rules > sector-specific rules > cross-sectoral standards.
Product-specific and sector-specific rules have precedence over the Pathfinder Framework and the Product-based calculation methodology in this section. However,in Japan, approval of product-specific rules and sector-specific rules requires consultation with national organizations and PACT, which remains pending.
The METI/MoE Carbon Footprint Guidelines are a type of cross-sectoral standard.

Hierarchy

Product-specific rules

Sector-specific rules

Cross-sectoral standards

1

2

3

OutlineRule(Example)

Handling of calculation
rules developed in Japan

Requirements for claiming
compliance with Pathfinder
Framework

Product category-specificcarbon footprint calculation rule

Sector-specificcarbon footprint calculation rule

Not limited to a specific product category orindustry
General Standard for Carbon Footprint
Calculation

PEFCR (Product Environment Footprint Category Rules)
PCR (Product Category Rules)

Together for Sustainability
Product Carbon Footprint Guidelines for the Chemical
Industry

ISO 14067:2018,
GHG Protocol Product Standard

TBD(Discussions underway with SuMPO regarding thehandling of the set of PCRs under of the SuMPO
Environmental Label Program)

TBD(Plans to hold discussions with PACT on approval ofcarbon footprint calculation rules developed bydomestic industry associations)

METI/MoE Carbon Footprint Guidelines and theCarbon Footprints Practical Guide positioned as
cross-sectoral standards

Product-specific rules that meet Pathfinder Framework
certification criteria can be used independently*

Sector-specific rules that align to the Pathfinder
Framework recommended. Highlight any aspects not
fully in alignment.

If there are differences, prioritize Pathfinder
Framework requirements* The Pathfinder Framework’s safeguards for product-specific rules are as noted earlier in this section.

Figure 2-2-3 Relationship between Product-based calculation in this section and existing methodologies in the
Pathfinder Framework (Figure 1-4-22)
Source: Created by Mizuho Research & Technologies based on Pathfinder Framework v273

2-2. Product-based calculation method

Processes to be calculated: Attributable processes
2-2-3: Scope and boundary
Pathfinder Framework requirements•

Companies shall account for all GHGs identified within the GHG
Protocol•Their respective 100-year global warming potential (including
carbon feedbacks) shall be derived from the latest IPCC Assessment
Report publication•

Companies shall report cradle-to-gate PCF, comprising all upstream
stages of the product life cycle up to the reporting company’s gate(including upstream transportation), excluding downstream
emissions from product use and end-of-life•

PCFs shall be exchanged upstream to downstream, providing kg ofCO2e per unit of analysis(1) Attributable LCA approach and attributable processes•

The Pathfinder Framework v2 uses the attributional LCA approach as
the premise for the above requirements.

•

The attributional LCA approach is a method that attempts to identify
the environmental impacts that occur in relation to the product life
cycle. Specifically, the approach is to identify the processes
attributable to the product and evaluate the environmental impactof each process.

••Pathfinder Framework v2 defines attributable processes as any
processes associated with services, materials, or energy flows that
become, make, or carry a product throughout its life cycle(Appendix-1). Figure 2-2-4 illustrates this approach.
The Green x Digital Consortium’s Product-based calculation adopts

the same approach.
•See 2-2-4 for a practical approach to identifying attributableprocesses.

Attributable LCA approach
Identify attributable processes for target products andassess the environmental impact of each process
Attributable process

Services, raw materials and energy flows related to:
Becoming a productE.g. raw material manufacturing andtransportation processes

Making a productE.g. product manufacturing process energy
inputsCarrying a productE.g. product transportation energy inputs

Figure 2-2-4 Attributable LCA approach and attributable processes
Source: Created by Mizuho Research & Technologies based on Pathfinder Framework v274

2-2. Product-based calculation method

Target greenhouse gases and global warming potential(2) GHG and global warming potential① Greenhouse gases➁ Global Warming Potential (GWP)•

The first element in the Pathfinder Framework requirements
identifies the GHGs to be included in the PCF calculation.

•

The second element of the requirements identifies the Global
Warming Potential (GWP) to be applied.

•

Pathfinder Framework v2 calculates the GHGs as identified within
the GHG Protocol titled “Required Greenhouse Gases in Inventories.”•

GWP is a coefficient that indicates how many times greater thegreenhouse effect of an GHG is than that of carbon dioxide.

•

As of March 2024, the target GHGs are as follows:•

Pathfinder Framework v2 requires that this is expressed in terms of
the 100-year GWP and is derived from the latest version of the IPCC
Assessment Report publication.

•

The Green x Digital Consortium’s Product-based calculation also
adopts this approach.

•

However, where the usable secondary data emission factor
introduced in the following section meets the safeguards set out in
Pathfinder Framework v2, it is not necessary to confirm theapplication of the GWP from the latest IPCC report.

•

On the other hand, if GHG emissions other than CO2 can beascertained, application of the GWP from the latest IPCC report shallbe mandatory.

‒ CO2 (carbon dioxide)‒ CH4 (methane)‒ N2O (nitrous oxide)‒ HFCs (hydrofluorocarbons)‒ PFCs (perfluorocarbons)‒ SF6 (sulfur hexafluoride)‒ NF3 (nitrogen trifluoride)•

The Green x Digital Consortium’s Product-based calculation also
adopts this approach.

75

2-2. Product-based calculation method

Cradle-to-gate boundary(3) Boundary•

The third element in the requirements specifies the boundary of the PCF
calculation.

•

Pathfinder Framework v2 defines the PCF calculation boundary as a“cradle-to-gate PCF, comprising all upstream stages of the product life
cycle up to the reporting company’s gate (including upstream
transportation), excluding downstream emissions from product use andend-of-life."•

The reporting company's gate refers to the gate of the company
shipping the product, not the company receiving it.

•

It is important to note that, unlike the conventional method of PCF
calculation, it does not include product use or end-of-life after shipment.
The requirements are based on the idea that the downstream companies
that receive the products and CO2 data will calculate the emissions after
shipment.

•••

Emissions after shipment that are outside the boundary include
emissions from shipment logistics from the shipping gate to thecustomer. This is accounted for by the downstream companies thatreceive the products as emissions from procurement logistics.

However, in practice, there are many cases where companies on the
shipping side calculate the emissions from shipping logistics(downstream procurement logistics). In this case, the shipping company
calculates and provides the emissions from procurement logistics for thedownstream company but provides separate data from the cradle-togate PCF.
The same can be said for the emissions from the procurement logistics
of reporting companies. This point is summarized again in 2-2-5 (2).

Recycled orreused(circularity)

NatureMaterialacquisition
andpreprocessing

End-of-life

Included in Pathfinder Frameworkboundary
Not included in Pathfinder
Framework boundary

Production

Productuse

Distribution
and storage** Contains product storage andshipping processes, includingtransportation within and between
these life cycle stages...

Production(Tier 1 supplier)

Procurement
logistics(transportation andstorage)

Production(reporting
companies)

Shipping logistics(distribution andstorage)

Drayagelogistics

Cradle-to-gate
Cradle-to-gate does not include emissions from shipping logistics, although it does include emissions fromprocurement logistics and drayage logistics from suppliers.

Figure 2-2-5 PCF calculation scope and bounday in the Pathfinder Framework
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v276

2-2. Product-based calculation method

Unit of analysis: “Declared unit”(4) Unit of analysis① Adoption of a “declared unit” approach•

The fourth element in the requirements specifies the PCF unit ofcalculation.

•

Pathfinder Framework v2 requires that the final PCF inventory
results be disclosed as kg-CO2e per unit of analysis.

•

•

•

In life cycle assessment (LCA), which is the basis of PCF
methodology, it is common to define calculation and display units interms of functional units. A functional unit is a quantified reference
unit that represents the performance of a product system and is aneffective unit quantity for comparative evaluation of different
product systems performing the same function.
However, in terms of the Pathfinder Framework goal of exchanging
CO2 data from upstream to downstream in the supply chain, many
PCF calculations are for intermediate products. Comparativeevaluation of different product systems performing the samefunction is rarely carried out at the intermediate product stage. In
practice, priority should be given to obtaining emission data for the
procured product itself, and it is important to obtain emission data
for the procured product per unit volume.

•

The Green x Digital Consortium’s Product-based calculation also
adopts this approach.

③ Conversion to "per unit" using product quantity•

As of version 2.0, published in January 2023, the Pathfinder
Framework does not include “piece” as a declared unit.** Although it is expected that “piece" will be added as a declared unit in futureversions of the Pathfinder Framework this document also excludes piece as adeclared unit. This document will be updated in response to Pathfinder Framework
updates on this issue.

•

For many products, it is easier to visualize PCF content using theunit “piece” rather than “per kg”, as is the case for types of part,and how to display the PCF for products that are usually counted inpieces instead in declared units is an important issue.

•

Pathfinder Framework v2 addresses this challenge by introducing
the metric of product quantity.

•

The product quantity is the quantity of the declared unit containedin the product to which the PCF refers. For example, in the case ofparts with a mass of 5kg per piece, the declared unit is given as“kg” and the product quantity is given as “5”.

Pathfinder Framework v2 identifies “declared unit” as the unit ofprocurement per unit of volume for the product. The Product-based
calculation methodology in this section also adopts this approach.

➁ Types of declared unit•

Pathfinder Framework v2 adopts the following as declared units:
L, kg, m3, kWh, MJ, tkm, m277

2-2. Product-based calculation method

Conversion to "per unit" using product quantity③ Conversion to "per unit" using product quantity (continued)•••

Using this concept of product quantity, a PCF expressed in terms of"per kg" can be converted to "per unit." Examples are given below.
Taking the example from the previous page, if we take parts with amass of 5kg per piece, the declared unit of the part is "kg" and the
product quantity is “5”.

••20 kg-CO2e

Per unit
PCF calculation/ Pieces (= 5 kg)

PCF value per unit

Product Declared
quantity unit

Suppose that the PCF of this part is "20 kg-CO2e per unit.“**In practice, when PCFs are calculated, it is common for products (parts, etc.) thatare counted by unit to have their emissions calculated on a per-unit basis.

•

Handling of PCF data for parts with a mass of 5 kg per unit and a PCF of
20kg-CO2eAt this time, the PCF per declared unit is “4 kg-CO2e/kg”. This isbecause "PCF per piece 20 kg-CO2 e" is divided by "mass per piece
5 kg" (20÷5=4).
As a result, the data provided to downstream operators is:‒ Declared unitkg

‒ PCF per declared unit

4(kg-CO2/kg)‒ Product quantity

5 (kg/piece)

If the downstream operator is counting the parts in question by"units" and also wants to convert the PCF to "per unit," the PCF perunit can be obtained by multiplying "PCF per declared unit" by"product quantity" (below).
4 (kg-CO2e/kg) x 5 (kg/unit) =20 (kg-CO2e/unit)

20 kg-CO2e/5 kg= 4 kg-CO2e/kg

Conversion to PCF
per declared unit

PCF value per kg declared

Data exchangeusingdeclared units

Conversion to PCF
per unit(as necessary)◼
◼
◼

Declared unit
PCF per declared unit
Product quantitykg
4(kg-CO2/kg)
5 (kg/unit)

4 kg-CO2e/kg x 5 (kg/unit)=20 kg-CO2e /Figure 2-2-6 Examples of use of declared unit and productquantity in data exchange
Source: Created by Mizuho Research & Technologies782-2. Product-based calculation method

PCF calculation steps
2-2-4. PCF calculation steps•

Pathfinder Framework requirements

The following steps are used in the calculation of a PCF in the
Pathfinder Framework (see Figure 2-2-7):‒ Step 1: Data identification•

All attributable processes shall be identified•Companies shall collect relevant activity data and emission factors
based on identified attributable processes

1a Identify all attributable processes and collect primaryactivity data

1b Categorize data

1c Collect emission factors•

Manufacturing of production equipment, buildings and other capital
goods, business travel by personnel, travel to and from work by
personnel, and research and development activities should not be
included within the boundaries of the PCF, unless materiallysignificant‒ Step2: Calculation‒ Step: 3 Allocation•

Companies shall be able to exclude individual attributable processes
representing less than 1% of the total cradle-to-gate PCF•

The Green x Digital Consortium’s Product-based calculation also
adopts the same approach.

•In aggregate, exclusions shall represent less than 5% of the total
cradle-to-gate PCF emissions••

If necessary: allocation of emissions to outputs should follow the
Pathfinder Framework allocation hierarchy

The first five requirements in the Pathfinder Framework relate to
the data identification in Step 1. The sixth requirement relates tothe allocation noted in Step 3.

•

The Green x Digital Consortium’s Product-based calculation also
adopts these requirements.

•

Hereafter, this section describes the PCF calculation methodology inPathfinder Framework v2 from Steps 1 to 3 and provides additional
guidance for the Green x Digital Consortium’s Product-based
calculation.

792-2. Product-based calculation method

Overview of steps for PCF calculation
1a

Activity data: Material and energy inputs, purchased productcomponents, and other direct emissions

Identify all
attributable processes
and collect primaryactivity data

1b
Upstream activities

Direct activities

If available: Cradle-to-gate PCF(primary emission factor)1

If available: Primary emission
factors

Otherwise: Emission factors fromsecondary databases2

Otherwise: Emission factors fromsecondary databases2

Categorize
data
1cCollect
emissionfactors2

Activity data × emission factors
Activity
emissions

Activity
emissions

Calculate andadd emissions

Activity
emissions+

Activity
emissions

Directemissions

Multi-input/output unit process emissions
3

Depending on type ofprocesses3

Allocateemissions(if necessary)
From internal systems

Share PCF+

1 E.g., x kgCO2 per y tons of steel.
2 Using secondary database(s) according to agreed guidelines

From systems

3 Companies shall avoid allocation whenever possible+ Emissions from different activities
added up

PCF

Figure 2-2-7 Steps for PCF calculation in Pathfinder Framework v2

Source: Created by Mizuho Research &Technologies from Pathfinder Framework v280

2-2. Product-based calculation method

Identifying attributable processes (Step 1a)(1) Step 1: Data identification‒ Supply of power and steam, etc., to the manufacturing process① Step 1a: Identify all attributable processes and collect primaryactivity data

‒ Direct GHG emissions from the manufacturing process (other thanfuel combustion; CO2 and methane produced and emitted fromchemical reactions, refrigerant leakage, etc.)•

The first step in PCF calculation (Step 1a) is to identify all
attributable processes and collect primary activity data.

•

As noted above in 2-2-3 (1), attributable processes are any
processes associated with services, materials, or energy flows that
become, make, or carry a product throughout its life cycle.

•

The following description is based on the description in Pathfinder
Framework v2.

‒ Treatment of waste generated from the manufacturing process•

Pathfinder Framework v2 does not explicitly address the handling of
manufacturing processes for inputs that are not part of the product(submaterials and consumables). For the purposes of this document,these are considered to be attributable processes at the "making a
product" stage. However, in many cases, it is possible to exclude
them using the exemption rule described in 2-2-4 (3) below.

■ Attributable processes at the “becoming a product’ stage•

The attributable process at the “becoming a product’ stage—whichis the main process—is the upstream manufacturing of raw material
and part inputs.

•

The upstream manufacturing process for raw materials and parts is
actually a combined manufacturing and transportation process bymultiple suppliers (i.e. a supply chain). However, at this stage, thecompany performing the PCF calculation needs to know theelements and quantities of raw materials and parts procured. It
does not have to study the structure of upstream combined
processes and break them down into discrete processes.

■ Attributable processes at the “making a product” stage•

The main processes at this stage are:
‒ Production of the fuel that goes into the manufacturing process

Attributable processes at the “becoming
a product’ stage

Attributable processes at the “carry a
product’ stage

Attributable processes at the “making a
product’ stage

Direct GHG
emissions

Fuel
production
Power supply
Raw material
production

Procurement
logistics

Parts
manufacturing

Procurement
logistics

Company
performing
calculation
implementer
Drayage

CO2 production and emissions
from chemical reactions andrefrigerant leakage

Products

logistics
End-of-life

Figure 2-2-8 Example of processes attributable to manufacturing
Source: Created by Mizuho Research & Technologies

812-2. Product-based calculation method

Excluding non-attributable processes (Step 1a)■ Attributable processes at the “carry a product” stage•

The main attributable processes at the “carry a product” stage areprocurement logistics and drayage logistics.

•

Shipping logistics are not subject to cradle-to-gate PCF calculation
because emissions occur after the shipment gate.

•

In addition, the logistics for a direct supplier (Tier) to procure raw
materials, etc. from an upstream supplier (Tier 2) conceptuallybelong to the “carry a product" stage. However, since this will be
included in the PCF data provided by the supplier, it is notconsidered necessary to grasp it in practice.

■ Specifying non-attributable processes•

Although we have identified representative attributable processes,
Pathfinder Framework v2 also specifies the following as processes
to be excluded from calculation (non-attributable processes, so to
speak):‒ Manufacturing of production equipment, buildings and othercapital goods‒ Business travel by personnel‒ Travel to and from work by personnel‒ Research and development activities•

Pathfinder Framework v2 says these processes should be excluded
from the calculation unless they are "materially significant" to thetarget product. Therefore, when excluding non-attributableprocesses from the calculation, it is not necessary to justify theexclusion.

•

Of course, these processes should be included in the PCF calculation
if they are “materially significant.” No quantitative criteria formaterial significance are provided in the Framework, and it isreasonable to assume that the criteria are left to the PCF assessor.
(In discussions with PACT side, it was suggested that, similar to the
exemption rule described in 2-2 -4 (3) below, a process may beconsidered materially significant if the overall PCF is affected by 5%,
but this is not prescriptive.)822-2. Product-based calculation method

Collecting primary data (Step 1a)■ Primary data collection•

After identifying all the attributable processes cradle-to-gate, theprimary data for each process is collected.

•

This primary data c is activity data. (Collection of primary data foremission factors from suppliers will be handled in Step 1b below.)•

Figure 2-2-9 shows examples of the collection of activity data in
Pathfinder Framework v2.

•

The activity data amounts shown here are larger than usual “perproduct” figures and should be regarded as more representative ofactivity data collection by an organization, which is the original data
before conversion to activity data per product.

•

In practice, the next step is conversion to "per product" (productquantity × per declared unit) or "per declared unit".

Examples of activity data collected
Material inputs

10 tons of steel, 300 kg of aluminum

Energy inputs (purchased
electricity, etc.)

100 kWh

Purchased materials or
feedstocks

Chemical component, unit, amount

Inbound transport and storagerelated inputs

10 km transport of 10 kg of chemicalcomponents from supplier tomanufacturing site in a diesel-fueled truck

Production waste and treatment

10 kg of cardboard waste sent to landfill

Other

CO2 formed during the production process

Figure 2-2-9 Examples of primary data (activity data) collected
Source: Created by Mizuho Research & Technologies based on Pathfinder Framework v283

2-2. Product-based calculation method

Categorizing data (Step 1b)➁ Step 1b: Data categorization•

After identifying all the attributable processes and collecting activity
data for each process, in Step 1b, Pathfinder Framework v2
categorizes the collected activity data as follows:◼

Figure 2-2-10 Categorization of activity data
Categorizes activity data as it relates to the company performing the PCF
calculation as shown in Figure 2-2-8
Direct GHG
emissions‒ Data used to calculate emissions from upstream activities••‒ Data used to calculate direct activity emissions

Fuel
production

Based on discussions with PACT, this document categorizes
upstream activities and direct activities as shown in Figure 2-2-10.

Power supply

It should be noted that only the activity data collected on fuelproduction and power supply are used to calculate emissions forboth upstream activities and direct activities.
‒ Fuel production activities = fuel purchases are used to calculate
emissions from both direct fuel combustion and upstream fuelproduction.
‒ Power supply activities = power purchases are used to calculate
emissions during power generation, which are considered to beemissions from direct activities, and to calculate emissions fromupstream production of fuel for power generation.

Company
performing
calculation

Raw material
production

Procurement
logistics

Parts
manufacturing

Procurement
logistics

Process

Activity data

Drayagelogistics

Products
End-of-life

Use in calculating emissions
Upstream activities

Direct activities

Fuel production

Fuel input✓ (Fuel production)✓ (Fuel combustion)

Power supply

Power input✓(Upstream emissions
from power generation)✓(Emissions from power
generation)

Input of raw
materials and parts✓

Ton-km, etc.

✓

Raw materials andparts
manufacturing
Procurement
logistics

Fuel consumption,etc.

✓

Direct GHG
emissions

Amount ofemissions✓End-of-life

Outsourced amount✓

Drayage logistics

Source: Created by Mizuho Research & Technologies in consultation with PACT84

2-2. Product-based calculation method

Collecting emission factors (Step 1c)③ Step 1c: Collecting emission factors

100 year GWP value from the most recent IPCC report as thecharacterization factor.

Next, the emission factors for each type of activity data are collected.
•

Collect supplier-specific primary data emission factors where
possible. The primary data emission factor here must be the cradleto-gate PCF data generated on the supplier side from the top of the
supply chain to the shipping gate. Even if gate-to-gate emissions
data is provided, it cannot be used for PCF calculations.

•

If primary data cannot be obtained, secondary data on emission
factors is collected. This shall be collected from a secondary
database conforming to the safeguards described later.

•

For direct GHG emissions from manufacturing processes, use the•This framework has developed rules for calculating PCF using
Organization-based calculation (see 2-3). If the cradle-to-gate data
provided by the upstream supplier is based on Organization-based
calculation, it will be treated as non-primary data.

•

The concepts of primary data, secondary data, and alternative data
for emission factors will be discussed in 2-2-6.

Collect emission factors for each type of activity data
Process

Collection of primary data

Company
performing
calculation

emission factors fromsuppliers

Suppliers

Collection of secondary dataon emission factors if primarydata is not available

Secondary database

Figure 2-2-11 Collection and classification of emission factors

Activity data
(Example)

Emission factors collected (Example)
Upstream activities

Direct activities

Fuel production

Fuel input

Fuel production emission
factorFuel combustion emission
factorPower supply

Power input

Power generation upstream
emission factor

Power generation emission
factor

Raw materials
and parts
manufacturing

Input of raw
materials and parts

Raw materials and parts
manufacturing emission
factor

Procurement
logistics

Ton-km, etc.

Emission factor per tonne

Drayagelogistics

Fuel consumption,
etc.

Fuel combustion emission
factorDirect GHG
emissions

Amount ofemissions

GWP

End-of-life

Outsourced amount

Waste treatment emission
factor

Source: Mizuho Research & Technologies and Aenergy Creation85

2-2. Product-based calculation method

Calculation of emissions (Step 2)(2) Step 2: Calculation••

After data identification (Step 1), the next step is the calculation ofemissions using the collected data. GHG emissions resulting fromeach process are derived by multiplying the amount of activity by
the emission factor. Emissions are calculated for upstream anddirect activities, respectively. An image of the calculation is shownin Figures 2-2-12 and 2-2-13.

•

Direct GHG emissions include leaked refrigerants, CO2 andmethane produced from chemical reactions of processes, etc.
However, GHG emissions do not necessarily have to be measured.

•Pathfinder Framework v2 allows estimation of direct GHG emissions
based on stoichiometry. For CO2 and methane produced fromchemical reactions, GHG emissions may be estimated from theamount of material input and stoichiometry.

If there are direct GHG emissions from a process, these areconverted to CO2 data by multiplying the emissions by acharacterization factor and adding them to the emissions
associated with the particular activity.

‒ Example:CO2 generation from cement production(CaCO3→CaO+CO2) is estimated from limestone input based on
the relationship between 1 mol of CO2 generated from 1 mol oflimestone.

Upstream activities

Direct activities

Fuel

Emission factor

Fuel
consumption

Cradle-to-gate emission
factor(upstream activities for fuelproduction)=

×

Cradle-to-gate emission
factor(upstream activities for fuelfor power generation)=

Emissions fromupstream power
activities

Cradle-to-gate emission
factor (raw material
production)=

Emissions fromraw matetrial
manufacturing

Transport process emission
factor for transport processfrom supplier to company

=

×

Power

Power
consumptionRawmaterialRawmaterial
consumption

×

Transport
volume×Transport

Amount ofemissions

Activity data

Figure 2-2-12 PCF calculation method

Emissions fromupstream fuelactivities

Emissions fromsuppliers to thecompany

Emission factor

Activity data

Amount of emissions

Fuel

Fuel consumption

×Fuel combustion
emission factor=

Fuel combustion
emissions

Power

Power
consumption

×Emission factor at timeof power generation=

Emissions fromelectricity

Waste

Amount of waste
produced×

Waste disposal
emission factor=

Emissions fromwaste disposal

Activity data
Direct
GHGs

Amount of direct
production GHG
emissionsCharacterization factor

×

GWP

Amount of emissions=

CO2 equivalent of
direct GHG emissions

Source: Mizuho Research & Technologies and Aenergy Creation86

2-2. Product-based calculation method

Illustration: Example of PCF calculation

Emission factor is supplier-specificprimary or secondary data

Direct activities
Amount of activity

Emission factor

Source of emission factor

Amount of emissions

Heavy oil A

1

L

×

2.75

kg-CO2e/L

Act on Promotion of Global WarmingCountermeasures=

2.75 kg-CO2e

Hydrogen(Company A)

0.1

Nm3

×

0

kg-CO2e/Nm3

Emission factor provided by Company A=

0 kg-CO2e

Purchased energy

Power (Company
15
B)

kWh

×

0.443

kg-CO2e/kWh

Emission factors by power company
Company B-adjusted emission factor (residue)=

6.65 kg-CO2e

Waste

Sludge

2

Kg

×

0.216

kg-CO2e/kg

Domestic emission factor database=

0.432 kg-CO2e

Direct emission

Methane0.02

kg-CH4×

29.8

kg-CO2e/kg-CH4

IPCC AR6=

0.596 kg-CO2e

Fuel

Total

10.4 kg-CO2e

Upstream activities
Amount of activity
Raw material

Emission factor

Source of emission factor

Amount of emissions

Aluminum

5

kg

×

10

kg-CO2e/kg

Secondary data database=

50 kg-CO2e

Recycled resin(Company C)

3

kg

×

1.5

kg-CO2e/kg

PCF provided by Company C=

4.5 kg-CO2e

Plain steel

2

kg

×

2

kg-CO2e/kg

Secondary data database=

4 kg-CO2e

Motor (Company D)

1

kg

×

3

kg-CO2e/kg

PCF provided by Company D=

3 kg-CO2e

Heavy oil A

1

L

×

0.4

kg-CO2e/L

Secondary data database=

0.4 kg-CO2e

Hydrogen (Company A) 0.1

Nm3

×

0.2

kg-CO2e/Nm3

Upstream emission factor provided byCompany A=

0.02 kg-CO2e

Purchased energy

Power (Company B)

15

kWh

×

0.03

kg-CO2e/kWh

Primary upstream emission factor
provided by Company B=

0.45 kg-CO2e

Transport

Truck transport(Company E)

2

tkm

×

0.5

kg-CO2e/tkm

Domestic emission factor database=

1 kg-CO2e

Fuel

Total

Figure 2-2-13 Example of PCF calculation

63.4 kg-CO2e*Total rounded to one decimal place
Source: Mizuho Research & Technologies and Aenergy Creation87

2-2. Product-based calculation method

Applying exemption rules (Cut-off rules)(3) Exemption rules (cutoff rules)•

Before proceeding to Step 3: Allocation, we will explain the
exemption rules indicated as the fourth and fifth requirements.

•

In Japan, exemption rules are often called “cut-off rules” based on
ISO 14067:2018, etc. Since the names are different but the idea isthe same, this document will refer primarily to cut-off rules.

•

Companies should seek to incorporate all attributable cradle-to-gateprocesses into their PCF. However, there are instances where thelack of data availability or the effort and resources required to
calculate certain attributable processes can far outweigh their overall
GHG contribution to the PCF.

•

Pathfinder Framework v2 states that in such cases, companies can
exclude the processes if they disclose and justify these, based on
their degree of significance to the final PCF..

•

The specific provisions are as follows:‒ Companies shall only be able to exclude individual
attributable processes representing less than 1 percent of
the total cradle-to-gate PCF.
‒ In aggregate, the sum of excluded processes shall be lessthan 5 percent of the total estimated cradle-to-gate PCF
emissions•

In practice, companies can conduct an initial screening of the
product to identify all attributable processes and their contribution to
the total PCF. If no activity or emission factor data is available, they
can make conservative estimates.

•

Then, the exemption shall be made subject to confirmation that:(1) emissions from individual attributable processes to be excluded
represent less than 1 percent of the total cradle-to-gate PCF; and•(2) total emissions from all the attributable processes to be excluded
represent less than 5 percent of the total cradle-to-gate PCF.

PCF at initial screening

Amount of emissions from
attributable processes

For PCF calculation

Individual attribution processes
excluded from tcalculation=>Total C-t-G PCF < 1%

Amount ofemissions fromnonattributableprocesses

Total attributableprocesses excluded from
calculation=>Total C-t-G PCF < 5%

Figure 2-2-14 Relationship between attributable processes andexclusion ratios
Source: Created by Mizuho Research & Technologies

882-2. Product-based calculation method

Candidates for application of cut-off rules(3) Exemption rules (Cut-off rules) (continued)•••

As mentioned above, Pathfinder Framework v2 identifies only (1)manufacturing of production equipment, buildings and other capital
goods, (2) business travel/travel to and from work by personnel,
and (3) R&D activities as non-attributable processes, so an initial
screening of other indirect activities needs to be conducted toconsider whether to exclude them in light of the cut-off rules (Figure
2-2-16).

In the initial screening, only the approximate scale of emissions
from the pertinent activities needs to be ascertained, so an
estimation method may be used. Ensure that this is not anunderestimate.
Processes that are often excluded through application of the cutoff
rules in PCF calculations include:‒ Sales and marketing department activities

A) Leave non-attributable processes outside of the boundary(Only manufacturing equipment, buildings, and other capital goods; employee
travel/commuting; and R & D activities)

Attributable process emissions
Directbe/make/carry process
emissionsNon-attributable processes
can be left outside of theboundary without an initial
screeningIf materially significant,should be included within theboundary.

B) Apply cut-off rules to attributable processes
Conduct Review B) for indirect activities other than A)
PCF at initial screening‒ Administration department activities‒ Air conditioning and lighting at production sites‒ Storage of raw materials and products

Emissionsfrom nonattributableprocesses

Attributable process emissions‒ Wastewater treatment

Individual attribution processes excluded
from calculation=>Total C-t-G CO2 data less than 1%

Emissionsfrom nonattributableprocesses‒ Treatment of air pollutants‒ Production of secondary materials‒ Manufacture and transport of containers and packaging andtransport materials used in the procurement of raw materials‒ Packaging materials for product shipment

For PCF calculation
Total attributable processes excluded from
calculation=>Total C-t-G CO2 data less than 5%

Figure 2-2-15 Non-attributable processes and processes
excluded by cut-off rules
Source: Created by Mizuho Research & Technologies

892-2. Product-based calculation method

Illustration: Steps 1-2 in PCF calculation◼

The PCF calculation steps are illustrated based on the explanations in Steps 1a, 1b, 1c, and 2.

1a) Identify all
attributableprocesses andcollect primaryactivity data1b) Categorize
the collected
activities into
upstream anddirect activities
1c) Collectemissionfactors

Fuel

Figure 2-2-16 PCF Calculation
Steps

Power

Products

Raw material

Upstream activities (Processes upstream from your company)
Activity dataCut-off rule

Direct activities (internal processes)

Emission factor

Activity data

Fuel

Fuel
consumption<-Less than 1% of
overall PCF→

Cradle-to-gate emission factor(upstream fuel production activities)

Power

Power
consumption<-Less than 1% of
overall PCF→

Cradle-to-gate emission factor(upstream activities for fuel for power
generation)Rawmaterial

Raw material
consumption<-Less than 1% of
overall PCF→

Cradle-to-gate emission factor (rawmaterial production)

Activity data

2) Calculate
emissionsCut-off rule

Emission factor

Emissionsemission factor

Fuel
consumption<-

PCF-wide
Less than 1%→

Fuel-fired
emission factorPower
consumption<-

PCF-wide
Less than 1%→

Unit emissions during power
generation

All primary data

Primary data provided by supplier/secondary data if not available

Primary data provided by supplier/secondary data if not available

All primary data

Although omitted inthis figure, direct GHG
emissions fromprocesses other thantransport and waste
emissions and“activity data ×emission factor" must
be calculated andtotaled.

Company
performing
calculation

Activity data

Emission factor

Amount of emissions

Fuel

Fuel
consumption

×

Cradle-to-gate emission factor(upstream fuel production activities)=

Emissions fromupstream fuelactivities↓

Fuel consumption

×Fuel combustion
emission factor=

Fuel combustion
emissions

↓

Power

Power
consumption

×

Cradle-to-gate emission factor(upstream activities for fuel for
power generation)=

Emissions fromupstream power
activities

↓

Power
consumption

×Emission factor at timeof power generation=

Emissions fromelectricity↓

Rawmaterial

Raw material
consumption

×

Cradle-to-gate emission factor (rawmaterial production)=

Emissions fromparts
manufacturing→

Cut-off rule: Less than 5% of total PCF
Source: Created by Mizuho Research & Technologies and Brother Industries<902-2. Product-based calculation Methods – 2-2-4. PCF Calculation Steps

Allocation (Step 3)(4) Step 3: Allocation••

Allocation means splitting multi-input/output processes into single
output unit processes by using physical, economic, or other criteria
to partition the emissions between the product system being studied(also known as the studied product) and one or more other productsystems (also known as co-products).
For example, suppose that a production site manufactures Product 1
on Production Line 1 and Product 2 on Production Line 2, but does
not know GHG emissions on a line-by-line basis, only on a site-widebasis. To calculate emissions from the production of Product 1, thetotal emissions of the production site are divided by some index(ratio of total number of products, production value ratio, production
weight ratio, etc.) to make the appropriate allocation.

Use some index to allocate total volume tomultiple outputs

Total emissions
from Site A

E.g., allocation in terms of
production quantity

Production siteALine 1
Line 2

Product 1
Product 2

Totalemissions from
Site A

Product 1•

Pathfinder Framework v2 states that "allocation shall be avoided
whenever possible" but may be used where unavoidable.

•

The sixth requirement states: "If necessary: allocation of missions
to outputs should follow the Pathfinder Framework allocation
hierarchy."•

The Pathfinder Framework allocation hierarchy is shown in Figures
2-2-18 and 2-2-19.

Avoid allocation

Prioritize PCRs andsectoral guidance

The Pathfinder Framework has one approach toallocation, but if product-specific rules or
sector-specific rules indicate an allocation
method, this should be given preference.

Determine ratio of economicvalue

The Pathfinder Framework emphasizes the ratioof economic value to primary products inselecting indicators for allocating emissions toco-products.

Production
quantity×

Select most suitable allocation
Product 1
Production
quantity+

Product 2
Production
quantity

When more granular data can be collected,
allocation using data with coarse granularity is
not permitted.

If the ratio of the economic value of the main
product to that of the substitute product isgreater than 5, use economic allocation. In thecase of 5 or below, if there is a physicalrelationship, use physical allocation; otherwise,use economic or alternative allocation.

Figure 2-2-18 Pathfinder Framework allocation hierarchy
Figure 2-2-17 Image of allocation calculation
Source: Created by Mizuho Research & Technologies

Source: Created by Mizuho Research & Technologies based on Pathfinder Framework v291

2-2. Product-based calculation method

Illustration: Pathfinder Framework allocation hierarchy (Decision-making tree)◼
◼

The concept explained on the previous page is presented here in the form of a decision tree.
ISO 14067:2018, etc., prioritize physical allocation over economic allocation, but the Pathfinder Framework may prioritize economic allocation if there is alarge difference in economic value between outputs.

Prioritize PCRs
and sectoral
guidance

Avoid allocation

Determine ratioof economic
value

Select most suitable allocation

Yes
Apply
process
subdivision
Is process
subdivision
possible?

Yes

Follow PCRor sector-specificguidance

Yes

No

Approved
PCRs or sectorspecificguidance?

No

Is there adominant,
identifiable
substituteproduct?

Applysystemexpansion
via
substitution

Economic value
ratio of main
product tosecondary productis 5 or less

Ratio of theeconomic
value of the
co-products?
No
Economic value ratio of
the main product to thesecondary product isgreater than 5.

Yes

Is there anunderlying
physicalrelationshipbetween the
co-products?
No

Apply
physical
allocation
based onmost suitablephysicalrelationshipUseeconomic or
alternative
allocationApply
economic
allocation forco-products

Figure 2-2-19 Pathfinder Framework decision-making tree to consistently implement ISO and GHG Protocol allocation rules
Source: Developed by Mizuho Research & Technologies and Sustech based on Pathfinder Framework v292

2-2. Product-based calculation method

Requirements for biogenic emissions and removals
2-2-5. Additional guidance on PCF calculations••

Pathfinder Framework v2 provides additional guidance for PCF
calculations in relation to:(1) Accounting for biogenic emissions and removals(2) Accounting for transportation and distribution emissions(3) Accounting for waste treatment and recycling emissions
Below we introduce and explain each of these, along withadditional guidance for the Green x Digital Consortium Productbased calculation.

(1) Biogenic emissions and removals

be calculated and reported separately as part of the data exchangeform•

GHG emissions associated with indirect land-use change (iLUC)
emissions may be calculated and reported separately as part of thedata exchange form. iLUC emissions shall not be included as part of
the PCF.

•To support transparency, all of the metrics above shall also bereported separately whether they are included in the PCF or not.

•Biogenic emissions and removals have been regarded as animportant theme in PCF calculations due to the expectations vested
in "nature-based solutions" that utilize photosynthesis carried out
by organisms as a means of achieving net-zero emissions.

•Pathfinder Framework v2 also provides additional guidance on how
to handle biogenic emissions and removals in the calculation ofcradle-to-gate PCFs exchanged over the supply chain.

•

The first requirement sets 2025 as the first year for mandatory
reporting of the “PCF (incl. biogenic emissions and removals)”.
Pathfinder Framework v2 was announced in January 2023, giving
companies 2 years to prepare.

•

The following pages introduce the biogenic emissions and removals
included in PCF calculations.

Pathfinder Framework requirements•

Biogenic emissions and removals associated with the following shallbe calculated and included as part of the “PCF (incl. biogenic
emissions and removals)” metric from 2025 onwards:— Direct land-use change (dLUC)— Land-management-related changes (including land carbon pools
and other non-CO2 emissions related to land management)— Other biogenic GHG emissions not covered in dLUC and land
management— Biogenic CO2 withdrawals•

The biogenic carbon content of the product (mass of carbon) shall93

2-2. Product-based calculation method

Items to be considered in terms of biogenic emissions and removals
A) Direct land use change (dLUC)••

Emissions resulting from recent (i.e., previous 20 years) carbon
stock loss due to land conversion directly on the area of land underconsideration.
In the case of no value chain and/or data traceability to account for
dLUC, companies shall account for sLUC emissions as a proxy fordLUC.

B) Land management GHG emissions or removals

•

•

•

It covers GHGs generated from land management activities and land
during the production of food, feed, fiber and other biologicalproducts.
Land management emissions and removals include all land carbon
pools—i.e., soil organic carbon, dead organic matter, and biomass
carbon stocks—as well as other non-CO2 emissions related to land
management.
Non-CO2 sources related to land management GHG emissions
include:‒ CH4 and N2O emissions from livestock, including emissions fromenteric CH4 fermentation and manure management

waste or wastewater management, and indirect emissions frompurchased energy.
C) Other biogenic emissions•

All other biogenic GHG emissions associated with productmanufacturing and transport that are not included above.

D) Biogenic carbon•

Carbon derived from living organisms or biological processes, but
not fossilized materials or fossil sources..

E) Biogenic CO2 withdrawal•

Biogenic carbon content converted into CO2e.

F) Indirect land use change (iLUC)•

A recent (i.e., previous 20 years) carbon stock loss due to land
conversion on land not owned or controlled by the company or in its
supply chain, induced by change in demand for products produced
or sourced by the company.

‒ Non-biogenic CO2 and N2O emissions from agricultural soils andinputs, including fertilizers, pesticides, and herbicides‒ CH4 and N2O emissions from biomass burning and fires‒ CH4 emissions from rice production‒ Other CH4, N2O, non-biogenic CO2, HFCs, and PFCs emissions,
including emissions from on-site fuel and energy consumption,
fuel combustion, air conditioning and refrigerant use, on-site94

2-2. Product-based calculation method

Items to be considered in terms of biogenic emissions and removals•

The treatment of each of the elements shown on the previous
page in the PCF calculation is shown below.

dLUC emissions

Unit

Included in
PCF

Reported
separately

Mandatory

kg-CO2eYes

Yes

Yes, from 2025

Land management
GHG emissions or
removals

kg-CO2eYes

Yes

Yes, from 2025

Other biogenic
emissions

kg-CO2eYes

Yes

Yes, from 2025

Biogenic carbon
content

kg

No

Yes

Yes, from 2025

Biogenic CO2
withdrawal

kg-CO2eYes

Yes

Yes, from 2025

iLUC

kg-CO2e

No

Yes

•

The fourth requirement states that all of the metrics above shallalso be reported separately whether they are included in the PCF
or not (Figure 2-2-20).
■ Recycling biomass materials•

As described below, the Pathfinder Framework v2 and theProduct-based calculation in this document adopt the “recycledcontent” method for the allocation of emissions from recycling
materials.

•

This method stipulates that (a) emissions up to the stage ofpreparation for recycling (recovery) should be included aswaste emissions and (b) emissions from the post-recovery
recycled material manufacturing process should be included in
the emissions of the company using the recycled materials.

•

The “recycled content” method also applies in cases where
biomass materials and materials derived from waste biomass.
However, Pathfinder Framework v2 does not specificallydescribe how to deal with biogenic carbon removals or biogenic
carbon content.

•

The following approaches are adopted as interim measures inthis document:No

Figure 2-2-20 Treatment of biogenic emissions and removals
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v2•

As stated in the second requirement, biogenic carbon content is
not included in the PCF calculation because it is not yet a GHG
emission, but it does need to be passed on to downstream
operators in the data exchange.

•

This allows for an assessment of the origin (biogenic or fossil) of
carbon content when it is released into the atmosphere as a GHG
at some stage downstream in the supply chain.

•

The third requirement states that iLUC emissions shall not be
included as part of the PCF.

‒ Biogenic carbon removals shall not be passed on to theusers of recycled materials‒ The biogenic carbon content shall be reported to theusers of recycled materials•

If explicit provisions and guidance are introduced in the
Pathfinder Framework in the future, these will be followed.

95

2-2. Product-based calculation method

Accounting for transportation emissions(2) Accounting for transportation emissions

vehicles and carbon-neutral fuels, it will become impossible tograsp the actual status of emissions from vehicle movement.
(Emissions from power generation are important for electricvehicles, and emissions from fuel production and transportation areimportant for carbon-neutral fuels.)

Pathfinder Framework requirements•

Upstream and direct transportation emissions within the cradle-togate boundary, including storage, shall be calculated and include in
the PCF•

Only transportation emissions relating to the fuel—also known as
well-to-wheel emissions—and the energy consumed by storage
facilities shall be included (i.e., the manufacturing of the vehicles
used for the transport of goods shall not be included).

•

Pathfinder Framework v2 mandates that all significant upstream
and direct transportation emissions within the cradle-to-gateboundary—i.e., transportation and storage emissions related to acompany’s direct activities and distribution activities between tiersin the supply chain relating to the PCF—shall be accounted for.

•However, as explained in Step 1a in 2-2-4, it can be consideredthat the elements covered in practice are procurement logistics
from Tier 1 suppliers and transportation and storage processes indrayage logistics prior to shipment.

‒ Procurement logistics and drayage logistics for Tier 1 suppliers
are included in the cradle-to-gate PCF data provided by the
supplier

As noted in the second requirement, emissions from not justtransport but also storage processes must be included, as well as
the life cycle emissions (well-to-wheel) of fuels used in transport.



The mandatory calculation of well-to-wheel emissions was basedon the awareness that, due to the widespread use of electricOn the other hand, emissions related to construction of vehicletransportation equipment and emissions related to maintenance ofinfrastructure for transportation services (e.g., road or port
infrastructure) are outside the boundary.

Storage

Emissions related to the energy consumed
by the storage facilities

Fuel life cycle emissions(well-to-wheel)

Emissions related to well-to-tank(upstream fuel production andtransportation) and tank-to-wheel (fuelcombustion)

Vehicle construction

Emissions related to construction ofvehicle transportation equipment

Emissions related to maintenance ofInfrastructure construction infrastructure for transportation services
and maintenance(e.g., road or port infrastructure)
Included in Pathfinder
Framework boundary

Not included in Pathfinder
Framework boundary

Figure 2-2-21 Boundary of calculation for transportation emissions
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v296

2-2. Product-based calculation method

Illustration: Accounting for transport process emissions•

The Pathfinder Framework calculates all significant upstream and direct transportation emissions within the cradle-to-gate boundary.

•For emissions related to transportation, emissions data calculated based on the Guidelines for CO2 Visualization in Logistics
developed by the Logistics SWG can be converted into product units (see next page).
Transportation within the company= Direct activities

Upstream transportation

Tier 1
suppliers

Warehouse

Delivery and storage transportation

Logistics warehouse

・・・

・・・

Transportation further
upstream from Tier 1
suppliers= Transportation between
tiers
Included in the PCF
data calculated andprovided by suppliers

Transportation
to the company=
Transportation
between tiers

Transportation
by othercompanies

Inhousetransportation

Shipping transportation= Tier-to-tier transport

Shipping transportation= Tier-to-tier transport

Factory*Calculated regardless of in-house transportation
or transportation by other companies
Subject to calculation

Figure 2-2-22 Concept of transportation targeted in transport process emissions

Excluded from calculation

Source: Created by Mizuho Research & Technologies

972-2. Product-based calculation method

Accounting for storage and transport emissions① Accounting for storage emissions••

Storage facility emissions are calculated by multiplying thepercentage of the total area that is covered by the reference
product with the total energy consumption of the storage facility.

Primary data for fuel available?

Should no information be available on the total energy usage of the
facilities, companies may use industry benchmarks based on thesite’s total floor area.

And/orYes

No

And/orVerified emission factor
from third party
available?
Yes

Areaproduct
GHG emissionsstorage =× Energy consumptionsite × Emission factorEnergy type
Areastorage site

② Accounting for transport emissions•

Calculatetransportation
emission factora(CO2e/t-km) andapply to massand distance data

Calculate
product-specificemission factor(CO2e/t shipped)
and apply tomass data

Apply emission
factor to primary
mass (and/or
distance)
data

Figure 2-2-23 Selection of transport emission
calculation method

Calculation of product transportation emissions depends on theavailability of data on fuel consumption, mass, distance, and loadfactor.

No
Obtain relevant
emission factor
from secondary
database
and apply to
primary mass
(and/or distance)datasecondary
database

Source: Created by Mizuho Research & Technologies from Pathfinder Framework v2•

Figure 2-2-23 shows how Pathfinder Framework v2 chooses themethod for calculating transport emissions.

•This is how Pathfinder Framework v2 calculates storage andtransport emissions.

•

The prevalent unit of measure used for calculationand exchange oflogistics emissions is ton-km, reflecting the mass of the shipment(in tons) and distance transported.

••

The Pathfinder Framework v2 refers to the Global Logistics
Emissions Council (GLEC) Framework and GHG Protocol standards
for further guidance.

In addition, the GxD Consortium Logistics SWG is developing
detailed guidelines for the calculation of storage and transportation
emissions (Guidelines for CO2 Visualization in Logistics). This
guidance will be consistent with the GLEC framework.

•

However, it does not assume that emissions are provided on a
product-by-product basis, so conversion to a product-by-productbasis is required to calculate PCF (Figure 2-2-24 on the next page).

982-2. Product-based calculation method

Illustration: Calculation of logistics emissions per product unit

In order to calculate emissions on a product-by-product basis, thetotal transportation chain emissions of the target cargo (received
from the logistics operator) must be divided by the product-byproduct value.

Amount ofactivity

TCE
_A2

TCE
_A3

TCE
_A4

TCE
_B1

TCE
_B2

TCE
_B3

a1

a2

a3

a4

b1

b2

b3

×

× ×

×

× × ×

α1

α2

α3

α4

β1

β2

β3

=

•

EmissionfactorTCE_A1=Here, the product unit means not only the unit but also themeasurement unit such as the weight (kg) or capacity (L, m3) which
is determined by the properties of the cargo and corresponds to the
product quantity × the declared unit introduced in 2-2-3.

※

Tier N+1
shipper=•

Covered by logistics operator B=

Therefore, the shipper will convert the emissions of the entire
transportation chain (all transportation processes from the shipper
to the consignee) obtained from the logistics (site) operators into
product units.

Covered by logistics operator A

A1

A2

A3

A4

B1

B2

B3

Amount ofemissionsTier Nconsignee∑
End-to-end
emissions÷𝒆𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 𝒑𝒆𝒓 𝒕𝒓𝒂𝒏𝒔𝒑𝒐𝒓𝒕 𝒄𝒉𝒂𝒊𝒏[𝒌𝒈𝑪𝑶𝟐𝒆]

Emissions per product unit [kgCO2e] =*TCE: transport chain element=•

Logistics companies’ calculations of emissions per product areconsidered optional. This is because, in many cases, it is not thelogistics (site) operator who can ascertain the product unit of the
cargo but the shipper of the cargo.

Transport chain=•

In the Guidelines for CO2 Visualization in Logistics under preparationby the Logistics SWG, logistics companies will present a method for
calculating total emissions for the entire transportation chain (alltransportation processes from shipper to consignee).

=

•

=

𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒑𝒓𝒐𝒅𝒖𝒄𝒕 𝒖𝒏𝒊𝒕𝒔

Convert to per product unit bydividing total emissions by
number of products

Shipper

Figure 2-2-24 Framework for calculating product-unit emissions
Source: Created by Mizuho Research & Technologies based on the Guidelines for
CO2 Visualization in Logistics

99
99

2-2. Product-based calculation method

Waste treatment and recycling emissions(3) Waste treatment and recycling emissions•

Pathfinder Framework requirements•

All production emissions shall be allocated to the outputs witheconomic value, rather than to the waste or recyclable material itself•

Emissions resulting from waste treatment as part of the production
process shall be calculated and included in the PCF of the company
that manufactured the product and generated the waste•

Emissions from the end-of-life stage of the products shall not be
included in the PCF boundary•

Since the Pathfinder Framework’s boundary is cradle-to-gate, the“recycled content” method should be used for the allocation ofemissions from recycling materials and energy recovery•

The first requirement prohibits the allocation of emissions frommanufacturing processes between output products and waste.
According to the allocation hierarchy in 2-2-4, such allocations should
not be made, but this requirement was added as a reminder.

•

The second requires that emissions from the treatment of waste
generated by a manufacturing process be included in the PCF of the
product output from the manufacturing process. This concept ispresented in Step 1a in 2-2-4, and this requirement is the basis for it.

•

The third requires that emissions from the end-of-life stage when the
product is disposed of after shipment not be included in the PCF. Thisidea has also been presented in the cradle-to-gate boundary
discussion in 2-2-3.

The fourth requirement specifies the handling of emissions andeffects associated with waste recycling, which is the first reference tothis.

① Waste recycling•

There are three approaches to accounting for waste treatment andrecycling emissions:A) Accounted for by the company that generated the wasteB) Accounted for by the company using the recycledmaterials/energyC) Shared by both•

Pathfinder Framework v2 recommends the “recycled content” method(B) as a suitable concept for the cradle-to-gate boundary (continued
on the next page).

100

2-2. Product-based calculation method

Recycled content method① Waste recycling (continued)••

Pathfinder Framework v2 states that the recycled content methodshould also be used for energy recovery.

•

The application of the recycled content method is arecommendation, and the use of other methods is not prohibited,
but Pathfinder Framework v2 states that if other methods are used,
this should be communicated during data exchange.

•

Pathfinder Framework v2 recommends the recycled content method
because it is suitable for the cradle-to-gate boundary.

The recycled content method shall be as follows:‒ The amount of waste discharged up to the stage of preparation
for recycling (recovery) shall be subject to calculation by thewaste discharging side.
‒ The amount discharged from the recycling material manufacturing
process after recovery is subject to calculation on the recycling
material utilization side.

‒ The cradle-to-gate boundary can capture the effect of choosing
recycled materials (recycled materials often have lower cradle-togate emissions than new materials) as a reduction in upstream
activity emissions.

Emissions included in PCF of Product X

Waste

Waste
treatment

Product
X
Company A

Materialforrecycling

Recovery stage‒ However, since the amount of emissions after shipment is outside
the boundary, the reduction effect of recycling after disposal of
the product (e.g., reduction of new material use materials insociety) cannot be recorded. Therefore, the closed-loop
approximation method, which aims to account for this effect,cannot be applied (Figure 2-2-26).

Company B

Amount of emissions
calculated by emitter•

The following benefits have also been noted:‒ It is applicable even if the supply chain is complex.

Amount of emissions
recorded by recycledmaterial user

‒ The secondary data emission unit is also calculated using therecycled content method, making it easy to obtain data.

Recycling stage

Company C‒ Consistent with Scope 3 calculation (does not include avoided
emissions not allowed in Scope 3 calculation)

Figure 2-2-25 Recycled content method
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v2101

2-2. Product-based calculation method

Reference: Explanation of closed loop approximation method•

The “closed loop approximation method” (also called “0-100”) is anothertypical method alongside the recycling inclusion method.

•

The concept of closed-loop approximation is as follows:‒ Even if recycled materials are actually included in the raw materials
input, the environmental impact is calculated assuming that all theraw materials are new.
‒ Account for 100% of the environmental impact of the recycling
process and the indirect environmental impact reduction effect ofrecycling at the post-use processing stage (on the recycled material
generation side)‒ Instead of accounting for all emissions before used products arerecycled into recycled materials, new material inputs can be deductedby the amount of recycled materials obtained from the recycling
process.

Raw material
procurement(virgin material)

Product
manufacturing

All recycled materials are counted as
virgin materials on the assumption thatthey are of the same quality as virginmaterials.

Indirect load
reduction
benefits

Since the calculation method assumes a closed loop recycling route, theraw materials input at the raw material procurement stage and therecycled materials obtained by recycling must have the same quality.

•

The Pathfinder Framework and the GxD Consortium envisage theexchange of CO2 data from upstream to downstream in the supply
chain on a cradle-to-gate basis, which is why applying the closed-loop
method would be difficult, since upstream entities would not havevisibility over the waste treatment processes at the end of life stage ofmaterials, and would therefore struggle to include the load reduction
effect retroactively upstream in the closed loop approximation method.

•

Closed loop approximation is often considered an option for cradle-tograve full-life carbon footprints* but this is why it is not recommended
in the Pathfinder Framework.
* For example, in the GHG Protocol Product Standard and the MET/MoE Carbon Footprint Guidelines.

Producttransport

Product use

Recycled
materials
Negative amount calculated
as a load reduction effect

Waste

Waste
treatment

End-of-life
product recovery

Recoveredmaterials

Recycled
processing

Recoveredmaterial
processing

Waste emitter records throughto recycling processing load

Figure 2-2-26 Closed loop approximation
Source: Created by Mizuho Research & Technologies from the GHG Protocol Product Standard102

2-2. Product-based calculation method

Accounting for waste treatment emissions➁ Accounting for waste treatment emissions

Reference: Linking production waste and the PCF■ Waste treated by the company that generates it•

The amount of waste generated during production and theamount sent for external processing are often identified andmanaged on a site-by-site basis rather than organized in relation
to individual products. However, Pathfinder Framework v2 requires
emissions from the treatment of waste generated during
production to be included in PCF calculations, so the amount ofwaste generated during production and the amount of waste
treated need to be linked to the PDF.

•

In the GxD Consortium PoC project (2022-June 2023), thefollowing two methods were presented as examples of linking
methods.

•

Calculate using primary activity data on waste type, composition,and type of waste treatment activity (incineration or landfill).

•

Companies may use waste treatment emission factors calculated
based on internal primary data. However, internal emission factors
should be verified by an independent auditor.

•

If no primary emission factors are available, emission factors
derived from accepted secondary sources can be employed.

■ Generated waste sent to a third party for waste treatment•

Waste treatment facilities should calculate their waste treatment
emissions, develop emission factors, and verify and communicate
these to the company that generated the waste in instances where
the waste is not recycled (or to the company making use of therecycled material in instances where it is).

•The waste treatment facility may share primary data with thecompany that generated the waste. This involves collecting certified
emissions data from waste treatment companies and allocating thecorresponding emissions to the products in question.

•

If companies do not have access to primary data from waste
treatment facilities, they shall estimate waste treatment emissions
using primary activity data on the waste type and composition andsecondary emission factors according to the type of waste
treatment and disposal.

A) Top-down approach (allocation from total)•

Method of allocating the amount of waste generated andtreated throughout the site to products produced at the siteB) Bottom-up approach (utilizing loss ratio)••

Utilize product-specific loss ratios measured for costaccounting, etc., a method that assumes that the losses gostraight to waste

Please regard these as potential methods of linking productionwaste and the PCF. Which method is more appropriate, or whether
a third or fourth method exists, will need to be considered on acase-by-case basis.

103

2-2. Product-based calculation method

Defining the data hierarchy
2-2-6. Data sources and hierarchy
Pathfinder Framework requirements•

Pathfinder Framework definitions shall be used by companies todetermine the nature of activity data and emissions•

Activity data that is used to calculate PCF shall be companyspecific•Secondary emission factors used shall be compliant with
Pathfinder Framework safeguards•

Companies may use proxy data to bridge minor data gaps••

Pathfinder Framework v2 specifies definitions and hierarchies for
activity data, emissions factors, and emissions data. The GxDConsortium Product-based calculation takes the same approach.

Pathfinder Framework v2 provisions are described below, alongwith additional guidance on their application in Japan.

guidance categorizes into primary, secondary, and proxy data
(Figure 2-2-27).
•

The Pathfinder Framework recommends that companies directly
measure GHG emissions or calculate GHG emissions based on
both primary activity data and emission factors (“best case”).

Data
type

Activity data

Emission factor

ExamplePrimary

Site- or supplier-specificdata directly measured,
collected, or calculated

Calculated based oncompany-owned primaryactivity data or provided
by a supplier for aprocess under theircontrol

Direct GHG combustion
emissions or wellcharacterized emission
factors based on
stoichiometry

Emission factors derived
from secondary sources

Default factors, regional
industry averages,
literature studies,government statistics,
financial data, andenvironmentally extended
input-output databases

Extrapolated, scaled-up, or customized data.
Data from similar processes used as a stand-in for a
specific process, e.g., based on geography, outdated
data

Customizing amount ofmaterial consumed by aprocess from anotherproduct’s life cycle
Using electricity gridemission factors from one
region for another region
with similar generation
mix

Secondary

Data not directly collected,
measured, or calculated
based on specificcompany production data

(1) Defining the data hierarchy① Define the data hierarchy•

For a PCF calculation to take place, two types of data are
required: activity data and emission factors. Both of these can bederived from different sources, which the Pathfinder Framework

Proxy

Figure 2-2-27 Data type definitions
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v2104

2-2. Product-based calculation method

Hierarchy in the combination of activity data × emission factors② Select primary data•

Companies shall prioritize the collection of primary activity andemissions data (Figure 2-2-28).

•

In some cases, further polishing and aggregating of the data may
be required to refine the emissions estimate.

•

Modeling tools are often used to estimate GHG emissions. The
results of a model that uses primary data as an input are also
considered primary data.

The principle is that activity
data is primary data

Data
type

Priority is given to primary data foremission factors. Use of the PCFs
provided by suppliers is recommended
for raw materials.

Activity data source

Emission factor source

Energy a

EnergyMaterial

Material

For on-site production: inhouse/primary③ Select secondary data
< Activity data >•Activity data used to calculate Product-based GHG emissions shallalways be company-specific.

•

However, the Pathfinder Framework acknowledges that there may
be instances where company-specific process-based data may not
be available (e.g., where there is no traceability in the value chain).

•In these instances, companies may resort to using spend-based
data and EEIO emission factors for their PCF calculations (“worst
case”), bearing in mind this will reflect negatively in their data
quality assessment scores.

Best
case

In-house/processbased data

For purchased electricity:
supplier-specific or via acertification mechanism (e.g.,guarantees of origin)
For other purchased energy:
supplier-specific or wellcharacterized emission
factors based on
stoichiometry

Supplier-specific(e.g., via
Pathfinder
Network)

Best
caseb

In-house/processbased data

Secondary process-based sources

worst
case

In-house/spend data

EEIO databases and data proxies

a: Electricity, heating/cooling, steam.
b: Prevalent approach in practice.

Figure 2-2-28 Data hierarchy for activity data and emission factors
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v2105

2-2. Product-based calculation method

Available secondary data emission factors< Data on emission factors>•

To ensure the use of verified and credible secondary emission
factors while still allowing for flexibility in the data sources used,
the Pathfinder Framework defines a series of safeguards that
secondary emission factors shall comply with if they are to be used
for the calculation of PCFs (Figure 2-2-29).
1. Documentation••

Databases not listed in Figure 2-2-30 can also be used for PCF
calculations if the safeguard compliance in Figure 2-2-29 isconfirmed.

Data included in the secondary emission factor shall be validated
in line with globally recognized LCA principles.*The emission factor source should ensure transparency byproviding information on key methodological (i.e., LCA modelingapproach, aggregation and allocation approach, if any) and data(time period, geography, technology, representativeness)elements.

Database

SectorLink

EcoinventAll

https://ecoinvent.org/

GaBi (thinkstep)All

https://gabi.sphera.com/international/
databases

GLEC database

Transportation

2. Management
and maintenance•If life cycle inventory databases are used, they shall be periodicallymaintained and updated with the latest data sets.

Official national emission
factor databases

All

Example:US EPA Database
https://cfpub.epa.gov/ghgdata/invent
oryexplorer/

3. Choice ofmodeling•

The modeling of the secondary emission factor shall be consistent
with the methodological principles of the Framework (e.g.,
attributional approach).

PEF

All

https://www.openlca.org/productenvironmental-footprints-pefs-inopenlca/

UNEP Global LCA Data AccessNetworkAll

https://www.globallcadataaccess.org/* More information on validation of databases can be found in Section 2.3 of the Global Guidance
for Life Cycle Assessment Databases (2011).

Figure 2-2-29 Safeguards for secondary data emission factor
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v2••

Databases of secondary data emission units accepted under
Pathfinder Framework v2 are shown in Figure 2-2-30. These
databases have been verified for safeguard compliance and do notneed to be checked again.

Figure 2-2-30 Examples of secondary emission factor databases
accepted under the Pathfinder Framework
Source: Created by Mizuho Research & Technologies from Pathfinder Framework v2106

2-2. Product-based calculation method

Positioning of secondary data emission factor databases in Japan(2) Positioning of secondary data emission factor databases in
Japan
•

•

What would happen if the provisions of Pathfinder Framework v2
regarding secondary data emission factors (safeguards, available
databases) were applied to secondary data emission factor
databases in Japan?

•

SHK emission factors fit the definition of an official nationalemissions factor database in Figure 2-2-30, so they are considered
to be part of a database certified as usable by Pathfinder Frameworkv2.

•

However, there are caveats when using the SHK scheme’s
secondary data emission factors for fuel and electricity for PCF
calculations based on Pathfinder Framework v2 and the GxDConsortium Product-based calculation:

The thinking behind the GxD Consortium Product-based calculation
methodology is described below.

① IDEA•The National Institute of Advanced Industrial Science andTechnology’s "IDEA" (Inventory Database for Environmental
Analysis) is one of the most widely used secondary data emission
factor databases in Japan.

•

IDEA is included in the UNEP Global LCA Date Access Network(https://www.globallcadataaccess.org/search) in Figure 2-2-30 andis therefore considered a database certified as usable by Pathfinder
Framework v2.

‒ The secondary data emission factor for fuel and power under the
SHK scheme does not include upstream emissions.

‒ The secondary data emission factor for power in the SHK scheme
adopts a different approach to the application of certificates andcredits from Pathfinder Framework v2.
‒ There are many types of secondary data emission factors for
power in the SHK scheme, and the choice must be made in linewith Pathfinder Framework v2.

② SHK (accounting, reporting and disclosure) scheme emission
factors•

The SHK scheme for GHG emissions accounting, reporting anddisclosure (which takes the first letter of the Japanese terms foraccounting, reporting, and disclosure) under the Act on Promotionof Global Warming Countermeasures provides a range of emission
factors (secondary data emission factors in the terminology of thisdocument) to support GHG emissions calculation by companies, andthese are used by many Japanese companies.

•

This document lays out conditions for using emission factors fromthe SHK scheme in product-level calculation (see overleaf).

1072-2. Product-based calculation method

Caveats when using secondary data emission factors in the SHK scheme (1)② SHK scheme emission factors (continued)•

At present, a realistic method for complementing emissions fromupstream activities would be to specify the type of fuel and, in thecase of power, the type of generated fuel to be extracted from thepower supply structure of the purchase menu, and then refer to theemission data for the production stage of the fuel from secondary
data emission factors such as IDEA.

■ Caveat 1: Upstream emissions not included•

The first point to note is that the SHK scheme's secondary data
emission factor for fuel and electricity covers only combustion andpower generation and does not include upstream emissions.

•

Both Pathfinder Framework v2 and the Product-based calculation
methodology in this document include emissions from upstream
activities (such as fuel manufacturing processes) of fuel and powerpurchased within the boundary (Figure 2-2-12).

•

Emissions from upstream activities of fossil fuels, such as coal,heavy oil, diesel oil, gasoline, and city gas, tend to be relatively
small relative to emissions during combustion, so it is expected thatthey can be excluded in many cases by applying the cut-off rules.

•

Therefore, when using the fuel and power emission factors in the
SHK scheme, it is necessary to either (a) supplement the upstream
activity emissions or (b) confirm that the upstream emissions can be
excluded in light of the cutoff rule and use the current SHK emission
factors.

•

On the other hand, carbon-neutral fuels such as hydrogen andammonia have zero emissions during combustion, while upstream
emissions may reach a certain level depending on the production
method. With regard to these fuels and the power generated fromtheir generation, it is assumed that emissions from upstream
activities cannot be excluded in some cases.

Figure 2-2-31 Boundary of fuel and power emission factors in SHK scheme•

METI is also developing a guide for obtaining fuel and power
emission factors that comply with the Carbon Footprint Guidelines,
which will include the calculation of emissions from upstream
activities. Once the guide is published, it should be much easier tocomplement upstream emissions.Companies implementing Productbased calculation should also refer to this when complementing
upstream emissions.

Upstream activity

Direct activity

Emission factor

Emission factor

Fuel

Cradle-to-gate emission factor(Upstream activities for fuelproduction)

Power

Cradle-to-gate emission factor(Upstream activities for fuelfor power generation)

Outside scope of SHK emission factors

Fuel

Fuel combustion emission
factorPower

Emissions per unit ofpower generation

Inside scope of SHK emission factors

Source: Mizuho Research & Technologies and Aenergy Creation108

2-2. Product-based calculation method

Caveats when using secondary data emission factors in the SHK scheme (2)② SHK scheme emission factors (continued)■ Caveat 2: The application method for certificates and credits is
unique to Japan.
•

The second point to note is that the SHK scheme allows adjustmentof power emission factors (emission factors of power companies)
using certificates and credits, and the application concept differsfrom Pathfinder Framework v2.

•

There are two specific differences:
A) Factor adjustment using offset credits is allowedB) When using energy attribute certificates such as non-fossil
certificates for factor adjustment, a slightly different formula to
the GHG Protocol is adopted.

•

The GHG Protocol Scope 3 Standard and Product Standard on which
the Pathfinder Framework is based do not allow offset credits to be
applied (Issue A).

GHG Protocol
Scope 2 GuidancePower company emission
factors under the SHK scheme

Offset credit

• No

• Yes

Method ofcalculating emission
factors whenenergy attributecertificates are used

• Apply certificate attributes(emission factor attributes)
to that power in units ofpower• Adjust emission factor by
applying a corresponding
reduction amount to theamount of power-derived
emissionsFigure 2-2-32 Differences between the GHG Protocol and the SHK scheme
for power emissions factors
Source: Created by Mizuho Research & Technologies•

In addition, where the GHG Protocol Scope 2 guidance applies theattributes of certificates (emission factor attributes) to purchased
power by unit of power consumption (kWh), in the SHK scheme,
the reduction effect of the application of the certificate (difference
from the national average coefficient) is converted into t-CO2 andsubtracted from emissions from power generation (Issue B).

•

PACT assumes compliance with the GHG Protocol for power
emission factors. To enable the use of emission factors forpurchased electricity under the SHK scheme for Product-based
calculation, the manner in which differences from the GHG Protocol
are handled becomes important. This document accordingly adopts
the following approach on this point:– Given that power emission factors under the SHK scheme are
noted by CDP-Worldwide Japan as not identical to the GHG
Protocol Scope 2 guidance approach but still acceptable toaccount for Scope 2 emissions, they are interpreted as being
emission factors consistent with the GHG Protocol to some extent,
and may consequently be used for Product-based calculation.

– Where emission factors that are highly compliant with the GHG
Protocol can be obtained,* it is recommended that these beapplied with priority over SHK scheme factors.
*The guide being developed by METI for obtaining fuel and power emission factorsthat comply with the Carbon Footprint Guidelines will recommend a method similar
to the GHG Protocol for offsets and energy attribute certificates.

109

2-2. Product-based calculation method

Caveats when using secondary data emission factors in the SHK scheme (3)② SHK scheme emission factors (continued)

noted that they are not identical to “contract-based emission
factor” compliant with GHG protocol but still acceptable to accountfor market-based emissions.
(In addition, given the issue noted in (A) on the previous page,eliminating factor adjustment using offset credits is
recommended.)■ Caveat 3: Factor selection required•

The third point to be noted is that the SHK scheme presents power
emission factors in multiple ways, so companies must select theappropriate option.

•

At the present time (March 2024), the SHK scheme provides twoemission factor units (emission factors by power companies): a basic
factor and an adjusted factor. A new basic factor is also underconsideration.
Basic emission
factor• Emission factor based on the power supply structure of power
supplied by a retail power utility before environmental valuetransactions such as non-fossil certificates are reflected

Adjusted emission
factor• The basic emission factor reflects the trading of environmental
values such as non-fossil certificates. Also reflects factor
adjustment with offset credits.

New basic
emission factor(Under review)• The basic emission factor reflects the trading of environmental
values such as non-fossil certificates. Factor adjustment by offset
credit is not included.

Source: Created by Mizuho Research & Technologies based on Appendix 3 of the 7th Meeting of the
Review Committee on Calculation Methods for the Greenhouse Gas Emissions Accounting, Reportingand Disclosure System

The selection of multiple power emission factors provided by the SHK
scheme is in accordance with GHG Protocol Scope 2 emission
calculation practices accepted in Japan’s CDP reporting.
‒ Currently, Japanese companies use “national average emission
factors” to account for the location-based Scope 2 emissions and“adjusted emission factors” by retail power provider to account forthe market-based Scope 2 emissions‒ Regarding adjustment emission factors, CDP Worldwide-Japan

Pathfinder Framework v2 makes no direct reference to therelationship between location-based or market-based emission
factors in Scope 2 accounting and primary or secondary emission
factors for purchased electricity in PCF quantification. However, basedon the data type definitions it gives in Table 5 (Figure 2-2-27 in thisdocument), the “adjusted emission factor” for each retail power
utility corresponding to the market standard equates to primary data,
and the “national average emission factor” for the government
statistics corresponding to the location standard equates tosecondary data.

•

This document adopts the same correspondence.
SHK scheme
power emission
factorFigure 2-2-33 Power emissions factors under the SHK scheme••

GHG Protocol
Scope 2 Guidance

National average
emission factor
Adjusted emission
factor by retail
power utility=

Pathfinder
Framework v2=

Location criteria

Secondary data

(reporting based on
location)==

Market criteria(contract-based report)

The practice of CDP
reporting in Japan

Primary data

Based on data typedefinition

Figure 2-2-34 Correspondence between SHK scheme power emission
factor, the GHG Protocol, and Pathfinder Framework v2

Source: CDP Worldwide-Japan document, based on Pathfinder Framework v2. Creating Mizuho Research & Technologies

1102-2. Product-based calculation method

Positioning of "3EID"② SHK scheme emission factors (continued)③ 3EID■ Caveat 3: Factor selection required•

3EID (Data Book for Environmental Impact Units Based on InputOutput Tables) is an emission unit database based on Input-Output
Tables developed and operated by the National Institute forEnvironmental Studies. It is a type of EEIO (EnvironmentallyExtended Input-Output, Enhanced Input-Output Model).

•It is also registered in the Ministry of the Environment’s “Emissions
Factor Database for Calculation of Greenhouse Gas Emissions ofOrganizations through Supply Chains” and is widely used to
calculate Scope 3 emissions by Japanese companies.

•

Pathfinder Framework v2 positions EEIO in the data hierarchy as theworst case, on a par with proxy data (Figure 2-2-28).

•

It is possible to apply the 3EID in PCF calculation, but it should be
noted that this will sit lower in the data hierarchy than secondary
data based on process data such as IDEA.

•

It should be noted that the new basic emission factor underconsideration may be regarded as an emission factor with a highdegree of compliance with the GHG Protocol in terms of eliminating
factor adjustment by offset credits.

•

Regarding this matter, this document's policy will be determinedbased on whether the new basic emission factor will berecommended in Japanese business's CDP reporting as more GHG
protocol-aligned emission factors.

111

2-2. Product-based calculation method

Handling of energy attribute certificates (purchased from consumer companies)
2-2-7. Handling of certificates and credits, etc.
••

Although this section does not correspond to a chapter of thePathfinder Framework, below is an explanation of three elements
which companies should take into consideration in terms ofenvironmental value in their PCF calculation and data exchange:‒ Energy attribute certificates (purchased from consumer
companies)‒ This arrangement follows the concept of Table 6 in Pathfinder
Framework v2 (Figure 2-2-28 of this document).
•

Unbundled certificates purchased by a company can also be applied
together to specific locations and specific manufacturing lines.
However, the same energy attribute certificate shall not be applied
twice at this time.

•

The reason for limiting certificates that can be applied together tospecific lines and products to unbundled certificates is that theamount of certificates included in power menus purchased fromretail electric utilities is difficult for consumer companies to grasp
and difficult for third parties to verify.

‒ Carbon credits‒ Mass balance approach(1) Energy attribute certificates (purchased from consumer companies)•••

Some energy attribute certificates, such as FIT non-fossil certificates,
allow a consumer company to adjust its own emissions factor for
power purchased directly and separately. A energy attributecertificate that is purchased in a form that is not bundled with such
power is called an unbundled certificate.
As described above in 2-2-6 (2) (2), this document does not requireconversion to the GHG Protocol method (applied to purchased power
in units of kWh, which is the attribute of the certificate) in the caseof the power emission factor under the SHK scheme but rather
allows the SHK method (applied by converting the reduction effectof applying the certificate into t-CO2).
On the other hand, the method of application of the unbundledcertificate on the consumer side can be selected. Therefore, it ismandatory to apply the GHG Protocol. That is, it is obligatory toapply the certificate attribute (emission factor attribute) topurchased power in units of power (kWh).

At this time, the emission factor when the unbundled certificate isapplied is positioned as primary data (because it is the emission
factor specific to the purchased power).

Figure 2-2-35 Applying unbundled certificates together
Apply certificate only for somelocations and some transactions

Example: Certificate purchased for 40%
of power consumption at site

January

April

July

OctoberLine ALine BLine CLine DLine E=>Line A has zero emissions from purchased power
per yearLine B purchased for May-July has zero
emissions from power

Source: Created by Mizuho Research & Technologies1122-2. Product-based calculation method

Handling of carbon credits(2) Handling of carbon credits•

Pathfinder Framework v2 is not designed to be used to quantify
GHG savings from offsets for carbon credit accounting. Offsets due
to carbon credits are also excluded from the Product-based
calculation in this section.

past actual emission amount and the current actual emission
amount) and is therefore excluded from the calculation of PCF andScope 1, 2, and 3 emissions based on the accumulation of actual
value.
•In the future, however, there will be carbon credits for removing
GHGs from the atmosphere. These carbon credits are proof of
performance and their inclusion may be allowed in calculations of
PCF and Scope 1, 2 and 3 emissions.

•However, if the data provider applies carbon credits, the amount ofcarbon credits used may be provided as reference information in
addition to the unapplied product emissions.

•

It should be noted that current carbon credits are mainly based on
the baseline-and-credit system, which is often referred to as "offset
credit."•

It is anticipated that the treatment of carbon credits for removal will
be reflected in the Pathfinder Framework after being specified in theLand Sector and Removals Guidance currently under development.

•

In the baseline-and-credit system, the difference between theemissions in scenarios that did not occur due to non-implementationof initiatives called the baseline and the actual emissions after
implementation of initiatives is credited. This difference is not theactual actual reduction amount (e.g., the difference between the•

The inclusion of carbon removal will help to reflect the idea ofcarbon credits when the Pathfinder Framework is revised.

Cross-product category rules
PACT
Pathfinder
Framework
Handlingof carbon
credits• Not designed to use
offsets

GHG Protocol
Product Standard• Offsets not coveredby the productlifecycle inventory

ISO 14067:2018

Product category specific rules
PEFCR
IT equipment• Carbon offsets mustnot be included• No mention if
offsetting by carbon
offset, etc., may be
included
Figure 2-2-36 Handling of carbon credits

Source: Compiled by Mizuho Research & Technologies based on various documents

SuMPO
PCR

EPD international
PCR• Offsetting by carbon
offset, etc. shall not
be included• No mention if
offsetting by carbon
offset, etc., may be
included113

2-2. Product-based calculation method

Mass balance approach(3) Concept of the mass balance approach••

The Pathfinder Framework does not define a mass balance
approach such as mixing biomass and non-biomass feedstocks andassigning biomass feedstock by weight to specific products of a
product.

< Mass balance approach >•When biomass raw materials are used, biogenic carbon is distributed by weight.

Bio 100%
raw material A

5g

Therefore, we have followed Pathfinder Framework v2 in not
adopting a mass balance approach in our Product-based calculation.

Bio 0%
raw material A

95g•

Bio 5%
poduct B

Bio 5%
product B

・・・

100g
=>Biogenic carbon: 5 g

Biogenic carbon is also allocated to by-products and waste.
Bio 100%
raw material A

100g•

Bio 5%
product B

Bio 100%
Product B

99g

Bio 100%
waste

1g

100g
=>Biogenic carbon: 100 g

The mass balance approach distributes biogenic carbon by weight to specificproducts.

Bio 100%
raw material A

5g
Bio 0%
raw material A

95g

Bio 100%
product B

Bio 0%
product B

5g=>Biogenic carbon: 5 g

Bio 0%
product B

・・・

95g

Figure 2-2-37 Mass balance approach
Source: Created by Mizuho Research & Technologies

1142-2. Product-based calculation method

Introduction of primary data share and data quality ratings
2-2-8. Data reliability‒ Initially, companies shall calculate and report, as part of PCF dataexchange, on at least one of the above metrics.

Pathfinder Framework requirements‒ From 2025, both metrics shall be reported by companies.

•

Companies shall either assess the primary data share (PDS) or thedata quality of the PCF until 2025; after 2025, both KPIs shall becalculated and exchanged•

If calculated, the PDS shall be based on both the nature of theactivity data and the emission factors used•

If calculated, the data quality ratings (DQRs) shall use theFramework’s data quality assessment matrix, excluding any inputs
representing less than 5% of the total PCF•

Pathfinder Framework v2 introduces the following indicators toincrease the use of primary data to track, report and improve data
quality:•

The idea is to ensure a fuller picture of both the quality of the PCFs
and the amount of primary data being used to calculate them.

•

The Product-based calculation in this section also introduces thesame definitions and adopts the same requirements for PDS and
DQRs.

•

The provisions of Pathfinder Framework v2 for these two indicators
are described below, along with additional guidance from the GxDConsortium on their application in Japan.

‒ Primary data share (PDS):
Percentage of PCF emissions that were calculated using primaryactivity and emissions data

‒ Data quality ratings (DQRs):
Quantitative score for five data quality indicators based on thedata quality matrix•

Pathfinder Framework v2 also notes that:115

2-2. Product-based calculation method

PDS calculation method(1) Primary data share•

To create visibility on the share of primary data in PCF calculations,the PDS in each data set should be determined and exchanged
across the value chain.

•This can be done by calculating the percentage of the total GHG
emissions (CO2e) that is derived using primary data.

•

The supplier's individual PDS for all inputs received is multiplied by
the respective emission ratio (%) of the product's output to PCF,
and the sum is calculated to be the downstream shared PDS.

PDS PCF Part 1%

PDS PCF product%Company A
Company C

PDS PCF Part 2

Company D%

Company B

PDS PCF product = (PDS PCF part 1 x emissions to PCF ratio (%)) + (PDS PCF part 2 x emissions to PCF ratio (%))

Part of PCF based on primary data（CO2e）

PCF（CO2e）••= 𝑃𝐷𝑆𝑃𝐶𝐹 (%)

Companies are encouraged to include an explanation on primarydata sharing with a view to helping to increase the amount ofprimary data flowing through their systems and to assist eachother in ensuring a more accurate PCF.
In the following pages, as representative examples of PCF
calculations, we will illustrate how the PDS is calculated in Japan’s
data environment based on calculations of emissions from fuelcombustion, power use, and raw material procurement.

Weighted PDS components, %Source: Created by Mizuho Research & Technologies from
Pathfinder Framework v2

Amount ofemissions

Percentageof emissions

PDS

Nature of the data

Part 1

4 kg-CO2e40%0%Secondary data

Part 2

3 kg-CO2e

30%

40%

Supplier-supplied PCF

Fuel 3

2 kg-CO2e20%

0%Secondary data

Power 4

1 kg-CO2e

10%

100%

Primary data

Product PDS 22% =40%X0%+30%X40%+20%X0%+10%X100%
Figure 2-2-38 Calculation method and example of PDS calculation
Source: Created by Mizuho Research & Technologies

1162-2. Product-based calculation method

Illustration: Calculation of primary data on emissions from fuel combustion◼

Emissions from fuel use are also considered primary data if both combustion use (activity) and the fuel combustion emission factor are primary data.

◼

For the fuel combustion emission factor, the emission factors in databases such as the SHK list and IDEA are considered as secondary data because they arecalculated as the average nationwide value. Therefore, emissions calculated using these data are treated as secondary data even if the activity data is primary
data.

◼

The primary data are the emission factors provided by suppliers and the factor calculated per unit (kg or m3) by specifying the amount of carbon contained fromthe fuel composition information and assuming that the total amount of CO2 is generated by combustion. At present, however, there are very limited cases inJapan where fuel suppliers provide combustion emission factors specific to the fuel they sell.

◼

The PDS is determined by the activity data and emission factor. The activity data is treated as 1 if it is primary data, 0 if it is not primary data such as secondary
data, and the PDS is calculated by multiplying it by the PDS of the emission factor. In the case where the primary unit of emission is secondary data as in Case 3,
since the PDS is 0%, the PDS of the emission amount is also considered as 0%.

Activity data
Fuel
Case 1

Emission factor

Amount of emissions

PDS

Fuel consumption

×Emission factor at time of fuel combustion=

Fuel combustion
emissions

PDS

Primary data×

Primary data
(fuel-specific value provided by supplier)=Primary data

1× PDS unit of fuel combustion
emissionsPrimary data
(emission factor calculated from fuelspecific carbon content)=

Primary data

1× PDS per unit of fuel combustion
emissions=

Secondary data

0%

Case 2

Primary data

×

Case 3

Primary data

×

Secondary data
(databases such as SHK scheme and
IDEA)

Figure 2-2-39 Approach to primary data in calculating fuel combustion emissions
Source: Created by Mizuho Research & Technologies

1172-2. Product-based calculation method

Illustration: Calculation of primary data on emissions from power use◼

Emissions from power use are also considered primary data if both power use (activity data) and the emissions factor from fuel combustion are primary data.

◼

Because the SHK scheme’s national average factor and the factors from databases like IDEA are national averages, they are considered secondary data. The
factor at time of power generation specific to the procured power is considered primary data. This includes the factor by power company under the SHK scheme.
However, since the concept of PDS differs by type, it is summarized in the table below.

◼

In the case of a zero-emission menu such as renewable energy, the primary data is 100% because the secondary data does not enter, but since the emission
amount is 0, the result is PDS = 0%.

◼

If secondary fuel data is used in the calculation of emissions from thermal power generation included in the power menu, this part is treated as secondary data
(PDS = 0%). If primary fuel data is used, that portion is treated as primary data.

◼

Unbundled certificates are treated as primary data. However, since the emission amount is 0, PDS = 0% as in the renewable energy menu.

Powerconsumption

Power

Case 1Primary data

××Emission factor at time of power generation
Primary data(factor by menu for emission factors by power
utilities under SHK scheme: renewableenergy/zero emission menu)=

Emissions from power

PDS=

Primary data0%
(because emissions = 0)
1× PDS per unit of power generation(Primary data on fuel combustion inthermal power generation)

Case 2

Primary data

×

Factor by menu for emission factors by power
utilities under SHK scheme: includes thermal
power generation

Case 3

Primary data×

Primary data
(Unbundled certificates)=

Primary data0%
(because emissions = 0)Case 4

Primary data

×

Secondary data(nationwide average factor in SHK scheme,
IDEA)

=

Secondary data0%

Primary data

0%
(Secondary data on fuel combustion inthermal power generation)

Figure 2-2-40 Approach to primary data in calculating emissions from power use
Source: Created by Mizuho Research & Technologies118

2-2. Product-based calculation method

Illustration: Approach to primary data on emissions from raw material production◼

For raw materials, emissions are calculated using cradle-to-gate emission factors.

◼

In the case of a cradle-to-gate PCF with emission factors provided by suppliers, the PDS of the emissions is determined according to the the PDS used in calculating
the PCF.

◼

In order to identify the PDS in downstream companies’ PCF calculations, suppliers need to provide PDSs.

◼

If the cradle-to-gate emission factor is used in an LCA database such as IDEA, the emission amount is secondary data.

Activity data
Raw material
Case 1

Emission factor

Raw material
consumption

×Primary data×

Cradle-to-gate emission factor(Raw material production)
Primary data

Secondary data

Amount of emissions==

Primary data

×

Secondary data
(databases such as IDEA)

Primary data

Secondary data

PDS
1 x PDS per unit of raw
material emissions

The primary data ratio of emissions
depends on the primary data ratio of thecradle-to-gate PCF provided by the supplier

Emission factor in cradle-to-gate PCF provided bysupplier includes primary and secondary data

Case 2Emissions from raw material
production=

Secondary data

0%

Figure 2-2-41 Approach to primary data in calculation of raw material production emissions
Source: Created by Mizuho Research & Technologies

1192-2. Product-based calculation method

Five data quality assessment indicators(2) Data quality assessment•

Pathfinder Framework v2 identifies the significance of Data Quality
Ratings (DQRs) as follows:•

The quality levels against which each indicator shall be assessed are
1— Good, 2—Fair, and 3—Poor.

‒ With companies able to calculate their PCFs using several datatypes, DQRs provide data users with a better understanding of theoverall integrity of the data and the resulting PCF.

•

This matrix shall be used by companies to derive quantitative DQRs
for each of the indicators. Companies shall include in the assessment
any contribution that represents at least 5 percent of the overall PCF.

‒ Understanding the quality of the data allows companies to identify
key secondary data sources that should be improved or replacedwith primary data in order for companies to be able to track the
impact of emissions reduction plans more accurately.
•‒ Technological representativeness: The degree to which the data
reflects the actual technology(ies) used in the process‒ Temporal representativeness: The degree to which the data
reflects the actual time (e.g., year) or age of the process‒ Completeness: The degree to which the data is statistically
representative of the process sites‒ Reliability: The level of confidence in the sources, data collection
methods, and verification procedures used to obtain the data aredependable.

Indicator of amount ofactivity‒ Geographical representativeness: The degree to which the data
reflects the actual geographic location of the processes within theinventory boundary (e.g., country or region)

Factor indicator

Once the GHG calculations for the PCF have been completed, thecompany undergoing data quality assessment shall calculate a DQR
for the following five indicators:

Data quality
indicators

1—Good2—Fair

3—PoorTechnologicalrepresentativenessSame technology

Similar technology (basedon secondary data
sources)

Different or unknown
technology

Temporal
representativenessSame reporting year

Less than 5 years oldMore than 5 years old

Geographic
representative-nessSame country or country
subdivision

iSame region or subregion

Global or unknown

Completeness

Activity data collected
for all relevant sites for
specified period

Activity data collected for<50% of sites for
specifiedperiod or >50% of sites
forshorter period

Activity data collected for<50% of sites for shortertime period or unknown

Reliability

Measured activity data

Activity data partly basedon assumptions

Financial data or
nonqualified estimate

Figure 2-2-42 Data quality matrix for Pathfinder Framework v2
Source: Created by Mizuho Research & Technologies and Sustech based on Pathfinder Framework v2120

2-2. Product-based calculation method

Data quality assessment method(2) Data quality assessment (continued)•

To facilitate clarity and transparency, companies shall report the
ratings of each data quality indicator separately.

•

No integration across data quality indicators.

•

If a company produces the studied product in more than one site, it
shall define the DQRs using the weighted average of production
volumes of the respective sites.

•

The contributions of the different PCF components (i.e., material
and energy inputs) to the final DQRs are determined via a weighted
average based on their emissions contribution to the total PCF.

DQR index = (DQR part 1) + (DQR part 2) + (DQR part 3)×

𝑃𝐶𝐹𝑝𝑎𝑟𝑡 1
𝑃𝐶𝐹𝑡𝑜𝑡𝑎𝑙×

𝑃𝐶𝐹𝑝𝑎𝑟𝑡 2
𝑃𝐶𝐹𝑡𝑜𝑡𝑎𝑙×

Data quality
indicators

Part 1

Part 2

Part 3

Total DQR

GHG contribution tototal PCF

25%

30%

45%

100%

Technologicalrepresentativeness

2

1

1

1.25

Geographicalrepresentativeness

1

3

1

1.60

Temporal
representativeness

2

3

3

2.75

Completeness

1

1

1

1.00

Reliability

2

3

2

2.30

𝑃𝐶𝐹𝑝𝑎𝑟𝑡 3
𝑃𝐶𝐹𝑡𝑜𝑡𝑎𝑙

Figure 2-2-43 Example of data quality assessment
Source: Created by Mizuho Research & Technologies based on Pathfinder Framework v2121

2-2. Product-based calculation method

SWG discussion: (7) Difference between Pathfinder Framework and existing LCA (1/3)•

The PCF calculation in the cradle-to-gate boundary presented by
the Pathfinder Framework differs in some respects from theexisting LCA and carbon footprint calculations based on the full life
cycle (cradle-to-grave). The SWG discussed and identified the gaps.

••

This discussion is presented here as an appendix because it may be
helpful to study existing LCA/CFP when calculating a Pathfinder
cradle-to-gate PCF for the first time.

Product Standard

Pathfinder Framework v2

Defining Business Goals (Chapter 2)

No description of calculation steps because these areautomated① Calculation steps•

While the PCF calculation steps are described briefly in the
Pathfinder Framework, the overall organization of the Pathfinder
Framework is similar to the carbon footprint approach.

•For example, the figure on the right shows a comparison with thecalculation steps in the GHG Protocol Product Standard as anexisting LCA calculation method.

•••

Because the Pathfinder Framework clarifies the setting ofprerequisites, the calculation steps are limited to a few elements.
Pathfinder Framework v2 identifies uncertainty analysis as a data
disclosure element but does not require that it be performed (see3-2). Therefore, there is no mention of the method of
implementation. This may be because the Pathfinder Framework
prioritizes the use of primary data and does not assume lowuncertainty data collection.
Existing standards should be consulted when performing
uncertainty analysis.

Uncertainty analysis is not required, but the quality of the PCF dataneeds to be evaluated (see 2-2 -8).

Principles of Product Life Cycle GHG
Accounting and Reporting (Chapter 4)
Fundamentals of Product Life Cycle GHG
Accounting (Chapter 5)
Establishing the Scope of a Product
Inventory (Chapter 6)

Disclosure on a declared unit basis and not stated in
calculation steps

Boundary Setting (Chapter 7)

Defined as cradle-to-gate in the Pathfinder Framework,
not included in calculation steps

Collecting Data and Assessing Data Quality(Chapter 8)

Calculation Step (1) Data Identification

Allocation (Chapter 9)

Calculation Step (1) Data Identification, Calculation
Step (3) Allocation

Assessing Uncertainty (Chapter 10)

None: Uncertainty analysis is not mandatory, but data
quality should be assessed

Calculating Inventory Results (Chapter 11)

Calculation Step (2) Calculation

Assurance

Pathfinder Framework also defines implementation
separately

Reporting

PCF must be shared downstream

Figure 2-2-44 Comparison of PCF calculation steps in existing LCA (ProductStandard) and the Pathfinder Framework
Source: Created by Mizuho Research & Technologies1222-2. Product-based calculation method

SWG Discussion: (7) Difference between Pathfinder Framework and existing LCA (2/3)② Data collection method for each process•

The existing LCA and Pathfinder Framework differ in how they retrospectively collect activity data for upstream processes.

Data
collection

Data collection

Fuel

Fuel
Existing

Raw material

Raw material

Power

Existing product LCAs collect activity data
for each upstream process and calculate
and total individual emissions.
On the other hand, the Pathfinder
Framework does not collect data on
upstream processes, but rather hascompanies use a cradle-to-gate PCF to
calculate the amount of their own activities(such as raw material procurement)
provided by suppliers. In recent years, there
have been an increasing number of cases
where the LCA database has not been used
for product LCA.

SupplierA

Power

Products

Raw material

Raw material

Emissions from direct activities

Emission factor

Supplier B

Emissions from direct activities

Emissions from direct activities

Fuel

×

Emission factor

Fuel

×

Emission factor

Fuel

×

Emission factor

Power

×

Emission factor

Power

×

Emission factor

Power

×

Emission factor

Company
calculating
CO2 data
Fuel
Raw material supply chain

Supplier provides thecradle-to-gate PCF
emission factor for thematerial
Supplier
providing
PCF

Power

Supplier A

Products

Raw material...

Pathfinder
Framework

×

Power

...

...

Emissions from direct
activities
× Emission factor
Fuel

Fuel

...

...

Supplier C...

product LCA

Data collection

Fuel

Power

SupplierD

Power

Company
calculating CO2
data

Upstream emissions related to
raw materials
Raw material

Emissions from direct activities

Emission factor

Fuel

×

Emission factor

From the supplier

Power

×

Emission factor

×

Figure 2-2-45 Differences between existing LCA and Pathfinder Framework approaches to primary data collection

Source: Created by Mizuho Research & Technologies1232-2. Product-based calculation method

SWG discussion: (7) Difference between Pathfinder Framework and existing LCA (3/3)③ Coexistence of LCA with data exchange in the Pathfinder
Framework
In ① and ②, we confirmed the differences between LCA and thePathfinder Framework, but they can be said to be equivalent to
Product-based calculation of cradle-to-gate emissions.

•

Step 4Rawmaterial 4

Step 5Rawmaterial 5

Step 5Rawmaterial 6

Step 1Rawmaterial 1

Step 2Rawmaterial 2

Step 3Rawmaterial 3

Process 0

Products

Rawmaterial 8

Both LCA- and Pathfinder Framework-based emissions factor canbe used, and they coexist (see figure on the right).
However, among the differences between LCA and the Pathfinder
Framework is the information passed downstream (see “3. CO2
data sharing method”).

Raw materialX

A secondary database may be used for the calculation.

Raw material
X

Cradle-to-gate emission factor calculated using the Pathfinder Framework
methodCradle-to-gate emission factor calculated using the existing LCA
methodRaw material
X

Cradle-to-gate emission factor cited from a secondary database・・・•

Own company

Tier 1

・・・•

The Pathfinder Framework is designed to pass the cradle-to-gate
PCF downstream from the supplier. This cradle-to-gate PCF does
not necessarily have to be calculated according to the Pathfinder
Framework, and it can be used even if it is calculated with the LCA
method.

・・・

Rawmaterial 7・・・•

Tier 2

Figure 2-2-46 Coexistence of LCA with Pathfinder Framework in
PCF calculation
Source: Created by Mizuho Research & Technologies

1242. CO2 data calculation method

2-3. Organization-based calculation method

2-3. Organization-based calculation method

Positioning of Organization-based calculation
2-3. Organization-based calculation method

Organization-based calculation comprises allocating the results of Scope 1, 2,
and 3 emissions calculations by customer (or byproduct delivered to eachcustomer).

2-3-1. Positioning of Organization-based calculation•

The Green x Digital Consortium aims to eventually link data at the productlevel, but considering the current situation in which it is difficult for allcompanies to support Product-based calculations, the Consortium will allow
Organization-based calculations in the transitional period.

•

The GHG Protocol Scope 3 Standard allows suppliers to provide supplierswith CO2 data, including primary data, by calculating and reporting the
portion of their Scope 1, 2, and 3 emissions attributable to activities
targeted at a particular supplier (Chapter 8).

•

The Green x Digital Consortium follows this approach and positions it as thebasic concept of Organization-based calculation. In other words,

Upstream Company A
Scope 3 Upstream C1-8
C1

C2

C3 C4

・・・ C8

Scope 1 and2

Allocate and supply the portion of delivery to Company X•

Companies that have not been able to calculate their Scope 1, 2, and 3
emissions must first calculate these using the Ministry of the Environment’s
materials on supply chain emissions calculation before engaging in
Organization-based calculation. (The next page presents the flow of thecalculation of Scope 1, 2, and 3 emissions and examples of data used for
Scope 3 calculation.)

Downstream Company X

Calculation of allocation of
Scope 1, 2, and 3 emissions
as an organization
by customer

C1

CO2 data ofproducts for
Customer X

Company A
product
emissions

S3 Upstream C1-8C2 C3・・・ C8

S1・2

Supplied to Company X* "S" stands for Scope and "C" stands for
Category** The size of the strip corresponds to the size of emissions for eachscope/category.

Figure 2-3-1 Organization-based calculation

Source: Created by Mizuho Research & Technologies

1262-3. Organization-based calculation method

Reference: Outline of calculation method for Scope 1, 2 and 3 emissions◼

◼

Companies that have not been able to calculate Scope 1, 2,
and 3 emissions need to calculate these using the Ministryof the Environment’s materials on supply chain emissions
calculation prior to conducting Organization-based
calculations.
This section presents an excerpt from the calculation
method, showing the flow of calculation of Scope 1, 2, and3 emissions (supply chain emissions) and examples of data
used for Scope 3 calculation.
<Step1>
Establish
calculation
targets<Step2>
Confirm the scopeof calculation<Step3>
Classifiy Scope 3
activities by
category<Step4>
Calculate eachcategory

•

•

•

•
•
•

Determine the scale of the company's Scope 1,
2, and 3 emissions and set calculation
objectives such as identifying emissions to be
reduced in the supply chain.

When calculating Scope 1, 2, and 3
emissions, consider the corporate groupas a company.

Every activity in the supply chain isbroken down into 1-15 categories.

Determine your calculation policy, taking into
account the purpose of calculation
Organize data collection elements and collectdata
Calculate emissions from activities andemission factors based on the collected data.

Figure 2-3-2 Flow of Scope 3 emission calculations

Scope 3 Category

Applicable activities (examples)

Emission factor (example)

1

Purchased products
and services•

Procurement of raw materials, outsourcing of
packaging, procurement of consumables•

Emissions per quantity

2

Capital goods•

Expansion of production facilities•

Emission factor per capital goods price bycapital formation sector

3

Fuel and energy
activities not includedin Scopes 1 and 2•

Upstream processes for the fuel being procured(mining, refining, etc.)
Upstream power procurement (mining and refining
fuel used for power generation)•

Emission factor by procurement volume byfuel and energy type4

Transportation anddelivery (upstream)•

Procurement logistics, lhorizontal flow, shipping
distribution (where the company is the shipper)•

Emission factor by means of transport

5

Waste from business•Transport and treatment of waste (excluding
valuable waste) outside the company•

Emission factor at the time of treatment by
type of waste

6

Business trips•

Employee travel•

Emission factor per travel expense

7

Employee commuting•

Employee commuting•

Emission factor per commuting allowancepayment

8

Leased assets(upstream)•

Operation of leased assets held by the company•

Emission factor by energy type9

Transportation anddistribution(downstream)•

Shipping transportation (after the shipper's own
transportation), storage in warehouses, retail sales•

Emission factor by means of transport

10

Processing of soldproducts•

Processing of intermediate products by business
operators•

Emission factor by energy type11

Use of sold products•

Use of the product by the user•

Emission factor of energy used during
operation

12

Disposal of soldproducts•

Product transportation and disposal at the time ofdisposal by the user•

Emission factor at the time of treatment foreach type of waste

13

Leased assets(downstream)•

Operation of leased assets owned by the company
as a lessor and leased to others•

Emission factor by energy type14

Franchise•

Activities that fall under Scope 1 and 2 of the
franchisees organized by the company•

Emission factor by energy type

15

Investment•

Investments in stocks, bonds, and project finance•

Emission factor per share of the investee(annual Scope 1 and 2 emissions/total
number of shares issued by the investee)•

Figure 2-3-3 Scope 3: Activities and emission factors by category
Source: Compiled from the Ministry of the Environment and Mizuho Research & Technologies, “Calculation and Reduction of Supply Chain Emissions"127

2-3. Organization-based calculation method

Methodology of Organization-based calculation
2-3-2. Methodology of calculation
Today, it is possible to collect data using sensors and to manage it
in a precise manner using digital technology.

•

In other words, with Organization-based calculation:

•

‒

‒

it has become possible not only to make rough calculations forthe allocation of the whole corporate group’s total Scope 1, 2,
and 3 emissions; but also to
calculate the amount of emissions from specific group companies
and sites that manufacture specific products.

•

In light of this situation, the Green x Digital Consortium proposes amore detailed calculation method based on the Scope 3 Standard
allocation method.

•

During the transitional period, the results of Product-based andOrganization-based calculations are expected to be mixed in the
supply chain. Since the results of the Organization-based
calculation are regarded as substitutes for the results of the
Product-based calculation, it is necessary to adopt the Pathfinder
Framework and the provisions for Product-based calculation aspart of the Organization-based calculation to bring the two
approaches to calculation as close as possible.

•

In light of the above, this section presents the Green x Digital
Consortium's methodology for Organization-based calculation of
the following elements.

(1) Scope 1, 2, and 3 data review
Presents points to consider when using Scope 1, 2, and 3 emissions data for
Organization-based calculations(2) Boundary
Presents the Consortium’s approach to boundary-setting in Organizationbased calculation based on the Pathfinder Framework’s cradle-to-gate
formula and the attributional LCA approach(3) Allocation
Proposes a method for making more detailed calculations by collecting
detailed activity data (process subdivision) based on Chapter 8: Allocating
Emissions in the Scope 3 Standard(4) Declared unit
Provides options for declared units in Organization-based calculation (bycustomer and by product)(5) Handling of credit and energy attribute certificates
Presents the results of discussion on the feasibility of applying purchased
energy attribute certificates and carbon credits in addition to the results ofOrganization-based calculation to achieve low carbon emissions(6) Indicators of data reliability
Presents an Organization-based calculation methodology for PDS and
DQRs, which are indicators of the reliability of the calculated PCF

1282-3. Organization-based calculation method

Scope 1, 2, and 3 data review (1/2)(1) Review Scope 1, 2, and 3 data•

Organization-based calculation calculates emissions by customer
and product by allocating Scope 1, 2 and 3 emissions alreadycalculated.

•

However, the Scope 1, 2, and 3 emissions used as the basis forcalculating emissions at the organizational level are not calculated
for the purpose of understanding emissions by customer andproduct. Therefore, it is desirable to review the purpose andboundary of the calculation (i.e., what emissions are excluded) inadvance when using the data for provision to customers.

••

The guidance states that when providing a portion of Scope 2
emissions to downstream entities, emissions data calculated using
either approach may be provided, but the approach used should becommunicated (Appendix B).

•

It is advisable to consider whether to allocate Scope 2 emissions on
a location-based or market-based basis before implementing
Organization-based calculation.

■ Confirm IDEA license used to calculate Scope 3 emissions•

IDEAv2 (for calculating supply chain greenhouse gas emissions) canbe used free of charge by companies that have obtained permission
from the Ministry of the Environment to calculate Scope 3
emissions.

•However, the MOE’s IDEAv2 may be used only for the purpose of
calculating an organization’s own Scope 3 emissions andOrganization-based calculations may not be conducted using the
Scope 3 emissions calculation results and supplied to customers as
CO2 data.

•

If Scope 3 emissions are calculated using IDEAv2, the Scope 3
emissions must be updated by replacing the emission factor withdata based on the paid version of IDEA, etc., to avoid violation of
the IDEA license before Organization-based calculation is performed.

The main points to note are as follows.

■ Confirm excluded emissions•

Some emissions may be excluded from Scope 1, 2, and 3
calculations.

•

Whether or not the excluded emissions include emissions that areimportant to products and services for the customer providing theCO2 data determines whether Organization-based calculation cancalculate appropriate CO2 data for that customer(see Figure 1-4-6).

•

It is recommended that emissions excluded from Scope 1, 2, and 3
calculations be identified prior to any allocation calculationss.

■ Review Scope 2 calculation method•

Scope 2 emissions are calculated using two approaches—locationbased and market-based—based on the GHG Protocol Scope 2
Guidance.

1292-3. Organization-based calculation method

Scope 1, 2, and 3 data review (2/2)(1) Review Scope 1, 2, and 3 data (continued)

methods). Pathfinder Framework v2 states the application of therecycled content method is a recommendation (should).

■ Verify conformance with Pathfinder Framework requirements•

As noted above, organization-based emissions calculations tooshould be conducted to the greatest extent possible using amethodology similar to the Pathfinder Framework and the Productbased calculation described in this document.

•

Companies should check whether they are using the closed-loop
approximation method in their calculation of Scope 3 emissions.

[Upstream emissions from transportation fuel production]•

Upstream emissions from transportation fuel production are notincluded in the minimum boundary of Scope 3 Category 4, so thisemission might not be counted in Scope 3 emissions. Pathfinder
Framework v2, on the other hand, requires this emission to be
included in the boundary.
In calculating Scope 3 emissions, companies should check how
upstream emissions from transportation fuel production are
handled.

•

Therefore, it is important to check whether any part of the Scope 1,
2, and 3 emissions data used in Organization-based calculation was
calculated using a methodology not consistent with the Pathfinder
Framework or the Product-based calculation methodology.

•

Figure 1-4-23 can be used to assist this review. It summarizes the
key differences between the Pathfinder Framework v2, ISO
14067:2018, and the GHG Protocol Product Standard. Despite
differences in the targeted organizations and products, the Scope 3
Standard, in principle, adopts the same approach as the ProductStandard in its methodology for estimating GHG emissions.
Therefore, many of the differences shown in the figure can be seen
as differences between the methodology of Scope 1, 2 and 3
emissions calculation and that of Pathfinder Framework v2.

••

While the Scope 3 Standard does not set requirements forsecondary data databases to be used, Pathfinder Framework v2
specifies examples of databases that may be used (Figure 2-2-30)
and safeguards.

•

Typical examples are shown on the right.

••

These elements should be revised in line with the Pathfinder
Framework concept, taking into account the status of yourcompany’s handling of Scope 1, 2 and 3 emissions calculations.

In calculating Scope 3 emissions, companies should check whether
they are databases not permitted by Pathfinder Framework v2.

[Secondary data databases that can be used][Allocation method for recycling-related emissions]•

The recycled content method is recommended for Scope 3
Category 5 calculation, while use of the closed-loop approximation
method is also permitted (see 2-2-5 (3) for more on the two130

2-3. Organization-based calculation method

Boundary (1) Cradle-to-gate in the Scope 1, 2 and 3 framework(2) Boundary① Cradle-to-gate in the Scope 1, 2 and 3 framework•

This document, like the Pathfinder Framework, in principle adopts
the cradle-to-gate method as the CO2 data calculation method to be
implemented by supplier companiesn.

•

The cradle-to-gate method is also adopted for Organization-based
calculation.

•

The correspondence between the Scope 1, 2 and 3 framework used
to calculate an organization's emissions and cradle-to-gate is asfollows:

Scope 1: Direct emissions of greenhouse gases by business (fuel combustion andindustrial processes)
Scope 2: Indirect emissions from the use of electricity, heat and steam supplied byother companies
Scope 3: Indirect emissions other than Scope 1 and Scope 2 (emissions by othercompanies related to business activities)‒ Scope 1 and 2 correspond to gate-to-gate••‒ Scope 3 upstream (Categories 1-8) corresponds to emissions fromupstream activities

Emissions fromupstream
activities

Therefore, in Organization-based calculations, emissions data for
the upstream portion of Scope 1 and 2 and Scope 3 upstream(Categories 1-8) are allocated to each customer using the proceduredescribed below. (Category 4 is where the company excludes theshipper’s outbound logistics.)(To the top of the supply
chain)

However, if all of Scope 1 and 2 and the upstream categories (1-8)
of Scope 3 are included in the boundary in Organization-based
calculation, the boundary will be different from the Product-based
calculation. The extent to which boundaries are included will be
described later in (2) Determination of Scope 1, 2 and 3 boundaries.

Gate-to-gate* Figures in circles are in the
Scope 3 category.

(Emissions from direct
activities)

Cradle-to-gate
Emissions from upstream activities added to direct
activity emissions (gate-to-gate)

Figure 2-3-4 Correspondence between Scope 1, 2, and 3 and cradle-to-gate
Source: Created by Mizuho Research & Technologies based on the Ministry of the Environment/Mizuho
Research & Technologies "Towards Calculation and Reduction of Supply Chain Emissions"131

2-3. Organization-based calculation method

Boundary (2) Determination of Scope 1, 2 and 3 boundaries(2) Boundary② Determination of Scope 1, 2 and 3 boundaries••

The Pathfinder Framework is based on an attributional LCA approach,whereby all attributable processes (any processes associated withservices, materials, or energy flows that become, make, or carry a
product throughout its life cycle) must be included within the PCF
boundary to calculate emissions. Conversely, non-attributableprocesses that are not related to product manufacturing(manufacturing of production equipment, buildings and other capital
goods, business travel by personnel, travel to and from work by
personnel, and research and development activities) are indirect
activities and should consequently not be included within theboundary unless materially significant.
In addition, Pathfinder Framework v2 introduced exemption rules(cut-off rules) that allow the exclusion of individual attributableprocesses deemed insignificant because they represent less than 1
percent of the total cradle-to-gate PCF, as long as the sum of
excluded processes in aggregate is less than 5 percent of the total
estimated cradle-to-gate PCF emissions.

•

The boundary for Product-based calculation observes the same
approach to non-attributable processes as Pathfinder Framework v2(see Sections 2-2-4 (1) (1) ① and 2-2-4 (3)).

•

Organization-based calculation also adopts this approach, withprocesses that are deemed to to constitute insignificant indirect
activities excluded from the calculation. However, products deemedmaterially significant should be included within the boundary.

A) Non-attributable processes lie outside of the PCF boundary
Include all attributable processes within theboundary

Emissions from attributable processess
Emissons from processes directly associatedwith becoming, making or carrying a product

Emissionsfrom nonattributableprocesses

Emissions from capital goods, businesstravel, commuting, and R&D, etc.,
should not be included within theboundary unless materially significant
Products deemed materially significant
should be included within the boundary

With reference to the exemption rules, “less than 5% of
total CO2 data" may be used as a criterion for determining
material significance.

B) Application of exemption rules to attributable processes
Total C-to-G emissions(Scope of 100% based on exemption rule)

Emissions from attributableprocesses

Calculated as CO2 data

See Figure 2-2-14

Individual processes excluded from
calculation n the attribution process⇒ Less than 1% of total C-to-G emissions

Emissionsfrom nonattributableprocesses

Total processes excluded from calculation as attributableprocesses=>Less than 5% of total C-to-G emissions

Figure 2 -3 -5 Approach to Boundaries and Calculation Targets in
Organizational Basis Calculation
Source: Created by Mizuho Research & Technologies1322-3. Organization-based calculation method

Boundary (2) Determination of Scope 1, 2 and 3 boundaries(2) Boundary② Determination of Scope 1, 2 and 3 boundaries (continued)•••

Applying the concept on the previous page specifically to Scope 1,
2, and 3 emissions, Scope 3 Categories 2, 6, 7, and 8 are
generally considered to be non-attributable processes. Each ofthese may also be included within the boundary if deemedsignificant, but should not be included otherwise.
Scope 1, Scope 2, and the remaining Scope 3 categories are
attributable processes. It may be determined on a case-by-casebasis based on the cut-off rules that some or all of these processes
are indirect activities and should can consequently be excluded
from calculation. (One example is Scope 2 office building lighting.)
However, the above does not apply where PCR, etc., deem thatindirect activities should be included within the boundary.

A: Attributable process
N: Non-attributable process

When calculating and sharing the DQR noted in Section (6) ②, werecommended that companies confirm the DQR for each process
when determining which processes to include in the calculation.

Downstream Company B(Customer)

Upstream Company A
S3 Upstream C1-8
C1
A

C2
N

C3 C4 C5A A A

C6 C7 C8
N N
N

S1+2
A

BecomeS3 Upstream C1-8
N

Total emissions of attributable processes

C1

Emissionsfromdeliveredproducts

C2

S 1+2

C8

・・・

Make
Carry

•

Data provision

Make* "S" stands for Scope and "C" stands for
Category

Figure 2-3-6 Relationship between attributable processes andScope 1, 2, and 3 emissions
Source: Created by Mizuho Research & Technologies1332-3. Organization-based calculation method

Allocation(3) Allocation
Currently, Chapter 8: Allocation, of the GHG Protocol Scope 3
Standard is the only document that can be called guidance for an
Organization-based calculation methodology (see 1-4-3 (2) in thisdocument). Therefore, the allocation calculation methodology hereis based on Chapter 8 of the Scope 3 Standard. (Although
Pathfinder Framework v2 provides its own allocation decision tree,
which t differs from the decision tree in Figure 2-3-7, we willcontinue to reference the Scope 3 Standard GHG Protocol for our
Organization-based calculation.)•

Section 8 of the Scope 3 Standard divides the allocation procedure
into two stages: avoiding and minimizing allocation and performing
allocation.

•

‒

‒
•

•

methodology presented here should be regarded as arecommendation for improving data quality.

Step1.
Avoid orminimize
allocation

The advance of digitization has made process subdivision easier, so
as an allocation methodology in Organization-based calculation, weshow how to (1) avoid and minimize allocation and (2) perform
allocation when process subdivision is carried out.
However, as noted in Section 2-1-2, in light of the Green x Digital
Consortium’s positioning of Organization-based calculation, theYes
No need toallocatenoFirst, to avoid and minimize allocation, companies willcollect more detailed activity data (process subdivision)and try to avoid or minimize allocation if possible.
If allocation is still unavoidable, it will be performed.

Can activity data such as for energy usedin product manufacturing be measured in detailthrough process subdivision?

Step2.
Perform
allocationis there an underlying physicalrelationship betweenthe studied product,co-product(s) and theiremissions contributions?

Yes
Use physicalallocationNo

Use economic
allocation or otherrelationships

Figure 2-3-7 Scope 3 Standard allocation decision tree
Source: Produced by Mizuho Research & Technologies from Scope 3 Standard GHG Protocol

1342-3. Organization-based calculation method

Avoiding and minimizing allocation (Process subdivision)(3) Allocation•

Allocation is a calculation method that divides the emissions of a
facility or system among the various outputs thereof.

For example, in the case of an organization with multiple
manufacturing sites, the common process might be the production
activities of the entire organization (the sum of the production ofmultiple sites), and the sub-processes might be the production
activities of each site.

•

Therefore, if the amount of emissions from one output among
multiple output is to be obtained through an allocation calculation,
the emissions data for other output will be mixed in.

‒ It is also possible to define the production activities of the entire
site as common processes and the production activities of eachproduction line within the site as sub-processes.

•

Consequently, the Scope 3 standard, like the Product-based
calculation standard, recommends that allocation be avoided
whenever possible:•① Avoiding and minimizing allocation (Process subdivision)‒

Allocation is necessary in situations where there is at least one
common process that has multiple valuable products as inputs or
outputs and for which it is not possible to collect data at theindividual input or output level.

‒

However, more detailed data should be collected and companies
should avoid or minimize allocations wherever possible by, forexample, using process subdivision to measure activity datasuch as energy use.
(Scope 3 Standard 8)•

Process subdivision is the act of dividing the common process that
produces multiple outputs into sub-processes corresponding toindividual products.

•

At this time, the accuracy of calculation results will differ
significantly if the emissions from the common process (total
production of multiple sites) are allocated to all products ofmultiple sites and if the emissions from the sub-processes(production of each site) are allocated to the products of each site
(as illustrated in Figure 2-3-8 on the next page).

•

Following the Scope 3 Standard 8 at left, this document also
recommends the following in organizational-level calculation:‒

To improve the accuracy of calculation results, process
subdivision should be performed prior to the allocation
calculation and organizations (companies, facilities, productionlines, etc.) that are not related to the products for a certain
business partner should be excluded from the emissions covered
under the allocation calculation.

135

2-3. Organization-based calculation method

Illustration: How process subdivision affects allocation◼
◼
◼

Assumes a situation in which Product A1 emissions are calculated using Organization-based calculation. Product A1 is assumed to be manufactured only at the company's site (Site 1).
Left figure: No process subdivision: Product A1 emissions are calculated based on Scope 1, 2, and 3 emissions data for the entire organization.
In other words, emissions of fuel and raw materials, etc., that are not directly related to the production of Product A1 are also used to calculate Product A1 emissions.
Right figure: Process subdivision. Accuracy in calculating Product A1 emissions through allocation improved by more pinpointing of the amount of activities related to the production of
Product A1.
Allocation with process subdivision

Allocation without process subdivision

Organization

Organization

Allocation for
calculating
emissions of
Product A1(entireorganization)

Site 1Site related tothe manufactureof Product A1

Site 1Site related tothe manufactureof Product A1

Collection of more granular activity
data (equivalent to process
subdivision)
Identification of site data related to
Product A1 manufacturing.

Site 2Site 2

Allocation for
calculating
emissions of
Product A1(Site 1)

As a result of process subdivision, productallocation is minimized and the accuracy of theallocation calculation is improved.

Calculation of Product A1 emissions (allocation)
Fuel A
Power A

Site 1Rawmaterial A

Fuel B
Power B
Raw
material B

Site related tothe manufactureof Product A1

Allocation of Product A1 also includes
Fuel B which is not actually related tothe manufacture of Product A1
Product A1
Product A2

Fuel allocatedto Product A1
Input volume

Site 2

Fuel A
Product B1
Product B2

Fuel
B

=
Production volume
Product A1

Calculation of Product A1 emissions (Allocation)

Only fuel related to the manufactureof Product A1 is used for Product A1
allocation.

Site 1
Fuel A
Power A

Site related tothe manufactureof Product A1

Product A1
Product A2

Rawmaterial A

Input volume

Product
B1

Product
A2
Product
B2=
Production volume

Site 2
Product A1

Fuel B
Product B1

Product
A1

Fuel allocatedto Product A1Power B
Raw
material B

Figure 2-3-8 Process subdivision to avoid and minimize allocation

Product B2

Fuel A
Product
A1

Product
A2

Source: Created by Mizuho Research & Technologies

1362-3. Organization-based calculation method

Performance of allocation(3) Allocation•② Performance of allocation

This document organizes the recommendations of the Scope 3
Standard into three areas:

This document uses the recommendations of the Scope 3 Standard
in performing allocation calculations:‒‒If avoiding allocation is not possible, companies should first
determine total facility or system emissions, then determine themost appropriate method and factor for allocating emissions.

Factors used for allocation should best reflect the causal
relationship between product manufacturing andemissions.

‒‒Companies should select the allocation approach that bestreflects the causal relationship between the production of theoutputs and the resulting emissions; results in the most accurate
and credible emissions estimates; best supports effective
decision-making and GHG reduction activities; and otherwise
adheres to the principles of relevance, accuracy, completeness,consistency and transparency.

The factor used for allocation should be one consistentfactor (e.g., production volume, production value) for
each allocation calculation.

‒

The sum of the results of the allocation and the total
amount before the allocation should match.

•‒

Companies may use a combination of different allocation
methods and factors to estimate emissions from the various
activities in the Scope 3 inventory. However, for each individual
facility or system, a single, consistent allocation factor should be
used to allocate emissions throughout the facility or system.

‒

The sum of the allocated emissions for each output of a systemshould equal 100 percent of emissions from the system. The useof multiple allocation methods for a single system can result inover-counting or under-counting of total emissions from thesystem.

•Consistency in the factors used for allocation only needs to beensured by allocation calculation.

•

For example, if process subdivision yields emissions for Sites A andB, respectively, and allocations are performed for the products ofeach site, there is no need to use the same allocation factor for
Sites A and B.

(Scope 3 Standard Chapter 8)137

2-3. Organization-based calculation method

Declared units in Organization-based calculation: Yen also allowed(4) Declared units•

As with Product-based calculation, Organization-based calculation
uses declared units to present CO2 data. However, caution should
be exercised in the application of declared units in Organizationbased calculation, as there are unique challenges that differ fromthose in Product-based calculation.

■ Calculation of allocation to specific products
Supplier Scope 1, 2 and 3 emissions
Scope 3 Upstream C1-8

C1

C2

C3 C4

・・・ C8

Scope 1 and 2
CO2 dataof Product A① Include the currency unit "yen" in the declared unit

As described above in 2-2-3 (4), the declared units used in Productbased calculations are L, kg, m3, kWh, MJ, tkm and m2.

•

For Organization-based calculation, the currency unit "yen" is added.

•

This is because “yen” is often used as a factor for allocating Scope 1,
2 and 3 emissions calculated as an organization to specific products
or transactions with specific customers.

••

Specifically, the yen is used as the allocation factor when thefollowing calculations are performed:‒

If the allocation is to a specific product, multiply Scope 1, 2, and3 emissions by product price (yen)/total sales (yen)‒In the case of allocation to transactions with specific customers,
Scope 1, 2, and 3 emissions are multiplied by the amountdelivered to the customer/total sales.

■Calculation of allocation to transactions with specific customers
Supplier Scope 1, 2 and 3 emissions
Scope 3 Upstream C1-8
C1

C2

C3 C4

・・・ C8

Scope 1・2

[Shipments by customer ÷ total
sales] x Scope 1, 2 and 3
emissions
CO2 data fromtransaction with
Customer X
CO2 data fromtransaction with
Customer Y...

The Pathfinder Framework does not include currency as a declaredunit. Note that the use of the declared unit “yen" is permitted only
when applying this document's Organization-based calculation
methodology.

CO2 dataof Product B...

•[Product price÷total sales]
X Scope 1, 2 and 3 emissions* "C" stands for Category

Figure 2-3-9 Yen may appear in allocation calculations in
Organization-based calculation
Source: Created by Mizuho Research & Technologies1382-3. Organization-based calculation method

Declared units in Organization-based calculation: Expansion of concept of product quantity (1/2)(4) Declared units② Applying the concept of product quantity to transaction quantity•

In Organization-based calculation, CO2 data is calculated in units ofspecific products, but CO2 data is often calculated in units oftransactions with specific customers (Figure 2-3-9).

•

Organization-based calculation applies an extended version of theconcept of product quantity used as a set with declared units.

•

In Product-based calculation, "product quantity" is defined as "theamount of a declared unit contained in a product referred to in the
PCF" (see 2-2-3 (4)). The PCF corresponds to Product-based CO2
data.

•

In the case of the former (CO2 data calculated in units of specified
products):
The definition of "product quantity" in Product-based calculation canbe applied as is.

•

For example, when CO2 data for a product weighing 5 kg per unit
(20 kg-CO2e per unit) is expressed per declared unit “kg”, theproduct quantity” is “5”. By multiplying the CO2 data expressed per
kg by the product quantity, the unit quantity of the product can beconverted into CO2 data per unit.

•

For example, if CO2 data (1kg-CO2e) for a product costing 1000 yen
per unit is expressed per declared unit of yen, the product quantity
is 1000. By multiplying the CO2 data expressed per yen by productquantity, the unit quantity of the product can be converted to CO2
data per unit.

CO2 data
per unit

20 kg-CO2e /Pieces
CO2 data per unit

Divide by product quantity (=5)

CO2 data
per declared unit(= 5 kg)
Product
quantity

Declaredunit

Multiply by product quantity (=5)

4 kg-CO2e/kg ← 20 kg-CO2e / 5 kg
CO2 data value per declared unit (kg)Figure 2-3-10 Product quantity in Product-based calculation
Source: Created by Mizuho Research & Technologies

CO2 data
per unit

1 kg-CO2e / Piece (= 1000 yen)
CO2 data per unit

Divide by product quantity (=1000)

CO2 data
per declared unit

Product Declared
quantity unit
Multiply by product quantity (=1000)

0.001kg-CO2e/JPY = 1kg-CO2e/ 1000 yen
CO2 data value per declared unit (kg)Figure 2-3-11 Product quantity in Organization-based calculation(1) Calculation on a per product basis
Source: Created by Mizuho Research & Technologies1392-3. Organization-based calculation method

Declared units in Organization-based calculation: Expansion of concept of product quantity (1/2)(4) Declared units② Applying the concept of product quantity to transaction quantity(continued)•

In the latter case (CO2 data calculated in units of transactions withspecified customers):
The concept of "product quantity" is extended to transaction
quantity (transaction value).

•

Assume the following fictitious case:•‒

Assume Supplier A with sales of 10 million yen (10 million yen)and Scope 1, 2, and 3 emissions (Scope 3 upstream only) of
100,000kg-CO2e (100,000kg-CO2e)‒Company A delivers 100 elements of various products to
Customer X, and the total amount of transactions reached 2
million yen (2 million yen) per year.

‒

Company A was asked by Company X for CO2 data
corresponding to its own (Company X) procurement activities.

‒

Company A gave up using Product-based calculation to calculate
CO2 data for each of its 100 products and opted to use
Organization-based calculation to calculate CO2 data in units ofthe total value of transactions with Company X.

At this time, in the Organization-based calculation, the CO2 data canbe calculated in units of the total quantity of transactions with
Company X by multiplying the Scope 1, 2, and 3 emissions ofCompany A by the “total quantity of transactions with Company X ÷total sales”: 100,000 kg-CO2e/company-wide × 2 million yen/Total
quantity of transactions with Company X ÷10 million yen/Company=20,000 kg - Total quantity of transactions with CO2e/X•

The CO2 data value per total transaction quantity (2 million yen)with Company X is calculated as 20,000 kg-CO2e. However, in orderto show the CO2 data value per yen declared unit during dataexchange, it is necessary to divide by 2 million, which is thetransaction volume in yen units to make 0.01 kg-CO2e/yen (20,000
÷2 million). In addition, when the CO2 data value per yen unit isreturned to the value per total transaction quantity, it is multipliedby 2 million, which is the transaction quantity in yen units.

•

In this calculation, 2 million, which is the volume traded in yen units,
plays the same role as product quantity on the previous page. The
introduction of a new index called transaction quantity in addition to
product quantity will complicate data exchange, so product quantity
will be replaced with transaction quantity when exchanging CO2
data on transaction basis.
CO2 data
per total vaue oftransactions with
Company X

20,000 kg-CO2e / 2 million yen
CO2 data per transaction

Divide by transaction quantity(2 million)

CO2 data
per declared unit

Transaction
quantity

Declared unit

Multiply by transaction quantity(2 million)

0.01kg-CO2e/yen = 20,000 kg-CO2e/yen = 2
million yen
CO2 data value per declared unit (kg)*The data disclosure element for “transaction quantity" in the figure is not a new figure but rather
substituted for "product quantity”

Figure 2-3-12: Product quantity in Organization-based
calculation ② Calculation by transaction unit

Source: Created by Mizuho Research &Technologies1402-3. Organization-based calculation method

Handling of credits and energy attribute certificates(5) Handling of credits and energy attribute certificatesindicated the same policy regarding the handling of carbon credits.

•

The procedure for calculating CO2 emissions data for delivery
destinations from Scope 1, 2, and 3 emissions data by process
subdivision and allocation calculation has been presented in (3)above.

••SWG members discussed the possibility of applying additionalpurchased electricity certificates and carbon credits to the CO2 dataobtained from Organization-based calculations to reduce carbon
emissions.

② Handling of energy attribute certificates•

In light of the GHG Protocol standards and guidance related toOrganization-based calculation, this document presents anapproach to credit and energy attribute certificate processing that
does not violate the rules.

① Handling of carbon credits•••

Current GHG protocol provisions do not permit reductions in Scope
1, 2 and 3 emissions using carbon credits.
Therefore, even if carbon credits are applied (amortized) to theCO2 data in the Organization-based calculation and offset, theeffect is not reflected in the Scope 3 calculation of the downstream
company that received the data. It can be concluded that theapplication (amortization) of carbon credits is ineffective for the
purpose of contributing to the reduction of Scope 3 emissions bydownstream businesses.

We will continue to closely monitor trends in the GHG Protocol in
relation to the handling of carbon credits and update this in the
Organization-based calculation as appropriate.

•

Energy attribute certificates are allowed to be used when the GHG
Protocol’s Scope 2 Guidance uses a market-based approach to
calculate Scope 2 emissions. The Scope 2 Guidance states thatwhen providing Scope 2 emissions data to recipients, emissions
data calculated using either the location-based approach or themarket-based approach may be provided.

•

From the above, it can be concluded that energy attributecertificates can be reflected in the CO2 data provided to thecustomer by:a.

Adopting a market-based approach and reflecting
energy attribute certificates in the company‘s Scope 2
emissions calculation results;b.

Disclosing the use of the market approach to suppliers;andc.

Supplying the allocation results for Scope 2 emissions
data.

The GHG Protocol is currently reviewing its rules, but the draft GHG
Protocol Land Sector Carbon Removal guidance has already141

2-3. Organization-based calculation method

Handling of credits and energy attribute certificates(5) Handling of credits and energy attribute certificates② Handling of energy attribute certificates (continued)•

The method shown on the previous page is a general method for
applying energy attribute certificates. However, SWG members
also discussed whether or not the following energy attributecertificates can be applied.
‒ The GHG Protocol takes the view that the reduction effect ofemissions from energy attribute certificates is achieved by
overwriting the attributes of purchased power withattributes such as renewable energy power held by thecertificate side (Scope 2 Guidance). In many cases, power
contracts are made on a site basis, and the minimum unit
for overwriting power attributes by energy attributecertificates is also often on a site basis.
‒ In the application of certificates of electricity at each site, isit possible to achieve 100% renewable energy by applying
them only to electricity supplied to specific production lines
or products manufactured at certain times?

••

The GHG Protocol does not provide explicit guidance on theapplicability of such certificates. The Pathfinder Framework also
makes no mention of this issue.

In the PoC phase of this project, we tested the above based on the
preliminary proposal which we made in Edition 1.0. Based on thefact that no negative opinions or improvemen suggestions wereraised during PoC testing, we have adopted the policy of allowing
the application of energy attribute certificates for power input tospecific production lines or products manufactured at a given timein accordance with the Edition 1.0 proposal as follows:‒

Allow the intensive application of energy attributecertificates for power input to specific production lines or
products manufactured at a given time.

‒

However, there shall be no double counting of energy
attribute certificates and the total number of certificatesapplied shall be equal to the total number of certificatesprocured.

‒

Only unbundled certificates (purchased separately from
actual power) purchased directly by consumer companies
can be used for this process.

*The reason why certificates that can be applied intensively to specific lines and products arelimited to unbundled certificates (certificates purchased separately from actual power) is because
the amount of energy attribute certificates included in the electricity menu purchased from retailelectricity providers is difficult for consumer companies to understand and for third parties toverify.

Certificates applied for some sites andsome transactions only

Example:Certificates purchased for 40% of
power consumption

January

April

July

OctoberSite A
Site B
Site C
Site D
Site E=> Site A has an annual Scope 2 of 0,
Scope 2 for May-July at Site B is 0, etc.

Figure 2-3-13 Application of certificates to some sites and periods
Source: Created by Mizuho Research & Technologies1422-3. Organization-based calculation method

SWG Discussion: (8) Cases in which double counting of certificates is easily overlooked•

This document permits the application of unbundled certificates tocertain production lines and products, provided that double
counting is strictly prohibited.

•

However, SWG members pointed out that there are cases where
double counting is easily overlooked, and suggested that awarenesshad to be raised in this regard.

•
•

•

•

•

One such case is where supplier companies perform both Productbased and Organization-based calculations.
For example, if one customer specifies Product-based calculation
and another specifies Organization-based calculation, the same
supplier will use Product-based calculation and Organization-based
calculation depending on the customer.

In such a case, information management concerning the applicationof certificates is likely to be complicated. Even if dual counting
within the scope of Product-based calculation or within the scope ofOrganization-based calculation is avoided, there may be cases
where certificates are used in both Product-based andOrganization-based calculation.
To prevent such double counting, a procedure could be established,for example, in which certificates are first applied to Product-based
calculation and the remaining certificates are applied toOrganization-based calculation.
In any case, it must be understood that simply checking for double
counting within one calculation method is not sufficient to prevent
double counting, so proper procedures need to be established.

Product-based calculation

Certificate application

STEP 1:
1 million kWh certificate applied
for Product-based calculation

renewableenergycertificates
10 million
kWh

1 million
kWh forproducts

Total emissions 4000t-CO2(0 t-CO2 after renewable energy application)

Customer A

Company

Organization-based
calculation
9 million kWhfororganizations
STEP 2:
9 million kWh of renewable energy must
be used (prorated, if necessary).
* Certificates can only be applied toOrganization-based calculation after thecompletion of application to Product-based
calculation.

400t-CO2

Customer B

In the current Organization-based calculation, 10 million kWh and 9 million kWh are not
managed separately. Power use before and after the application of certificates for multiple
organizations and products needs to be managed within the company.

Figure 2-3-14 Example of a procedure for preventing double counting of certificateswhen both Product-based and Organization-based calculations are both used
Source: Mizuho Research & Technologies and NTT Data Group

143

2-3. Organization-based calculation method

Postponement of adoption of PDS(6) Data reliability indicators••

Indicators such as primary data share (PDS) and data quality ratings(DQR) were introduced for Product-based calculation to indicate thedata quality of CO2 data (2-2-8).

•

•

•

In addition, for Organization-based calculation, the results of thecalculation of the PDS differ depending on the choice of calculation
method, even for the same transaction or product. In the case of
Figure 2-3-15, it is possible to increase the PDS value by avoiding
process subdivision.

•

Given the above, it would be premature to introduce PDS into
Organization-based calculation at present. We will wait for progressin international considerations on PDS calculation methods.

Organization-based calculation adopts the following policy for these
indicators:‒

PDS will not be adopted at this time.

‒

DQR calculation and sharing is recommended, and an approach
will also be introduced to address issues specific to Organizationbased calculations.

① Postponement of adoption of PDS•

which method is adopted, making it difficult for data users tointerpret and utilize them.

When an organization calculates Scope 1, 2, and 3 emissions, it cancalculate the PDS using the same calculation method as Pathfinder
Framework v2 and Product-based calculation in this document.
However, some companies use a PDS calculation method that differsfrom that of the Pathfinder Framework. Some companies deem
acquired emission data to be 100% primary data because it isprovided by a specific supplier in the CDP reporting and others. This
departs from the Pathfinder Framework method (Figure 1-4-15),
which has a PDS of 0 in some cases even for data provided bysuppliers.
It is expected that there will be some resistance on the part ofcompanies to pursuing the Pathfinder Framework method in place of
the alternative method which is currently the mainstream. Even if
both methods are acceptable, the PDS values differ depending on

Without process subdivision
PDS 100%
PDS 100%
PDS
PDS

Raw material
A1
Rawmaterial A20%

Raw material
B10%

Raw material
B2

Even where the same data is received from a supplier, depending on whether
the company has its own process subdivision, the PDS results passed on to
the downstream operator will differ

Sites related to
manufacturing
Product A

Product A

PDS 50%Sites related to
manufacturing
Product B

Product B

PDS 50%Sites related to
manufacturing
Product A

Product A

PDS 100%

Product B

PDS

With process subdivision
PDS 100%

Raw
material A1

PDS 100%

Raw
material A2

PDS

0%

Raw
material B1

PDS

0%

Raw
material B2

Sites related to
manufacturing
Product B

0%

Figure 2-3-15 Effect of process subdivision on PDS calculation
Source: Created by Mizuho Research & Technologies

1442-3. Organization-based calculation method

DQR for Organization-based calculation (1/2)(6) Data reliability indicators(2) DQR calculation and sharing•

This is because, while there is another DQR method, it is not as
popular as the alternative PDS method. We also want to avoid themixing of the two methods in disclosure.
The DQR indicators and evaluation criteria adopted are shown in
Figure 2-3-16.

•

As noted above in Section 2-2-8 (2), the emission factor indicators
are technological representativeness, temporal representativeness,and geographic representativeness, while integrity and reliability
are indicators for amount of activity.

••

Like the Pathfinder Framework, Product-based calculation defines
DQR calculation and sharing as a requirement, while Organizationbased calculation defines it as a recommendation.
The concept of addressing issues specific to Organization-based
calculation is described on the next page.

Indicator of amount ofactivity•

Factor indicator•

For the DQR, Organization-based calculation will also introduce thethe Pathfinder Framework method for indicators and evaluation
criteria.

Data quality
indicators

1—Good2—Fair

3—PoorTechnical
representativenessSame technology

Similar technology (basedon secondary data
sources)

Different or unknown
technology

Temporal
representativenessSame reporting year

Less than 5 years oldMore than 5 years old

Geographic
representativenessSame country or country
subdivision

Same region or subregion

Global or unknown

Completeness

Activity data collected
for all relevant sites for
specified period

Activity data collected for<50% of sites for
specifiedperiod or >50% of sites
forshorter period

Activity data collected for<50% of sites for shortertime period or unknown

Reliability

Measured activity data

Activity data partly basedon assumptions

Financial data or
nonqualified
estimate

Source: Developed by Mizuho Research & Technologies and Sustech based on Pathfinder Framework v2

Figure 2-3-16 Data quality matrix for Pathfinder Framework v2(Figure 2-2-42)145

2-3. Organization-based calculation method

DQR for Organization-based calculation (2/2)(6) Data reliability indicators② DQR calculation and sharing (continued)
•

•

•

•

•

The problem with introducing DQR into Organization-based
calculation is that decisions need to be made on:(a) Whether the DQR at the time of calculation of will be retained(a) Whether reevaluation will be carried out from the viewpoint of
the products and transactions to be calculated.
In Organization-based calculation, Scope 1, 2, and 3 emissions areallocated to a specific product or transaction through an allocation
calculation, but this allocation calculation results in the inclusion ofemissions data not directly related to the target product ortransaction.
When calculating Scope 1, 2, and 3 emissions as an organization,
DQR is highly regarded if the production data for the products
manufactured by the company is appropriately collected. However,
DQR (technological representativeness, etc.) will be
underestimated if it is evaluated as the mixed data for the CO2
data for target products and transactions (see Figure 2-3-17).
Although it would be best to replace the DQR with aproduct/transaction perspective rather than an organization
perspective through allocation, this is likely to be an extremely
onerous process. We have accordingly taken the position that DQR
need not be replaced with a product/transaction perspective rather
than an organization perspective.

Assume that different products will be manufactured on Production Lines A and B
at the site where Company X is locatedCompany X

Production LineA

Manufacture

Production LineB

Manufacture

Scope 1, 2 and 3
emissions ofCompany X

Scope 1, 2 and 3 emissions of Company X

Amountofactivity

Production
Line B

Amountofactivity

Original
unit

Original
unit

Product B

Allocation calculation through Organizationbased calculation

Calculation of Scope 1, 2 and 3 emissions

Production
Line A

Product A

Line AemissionsamountLine AemissionsamountLine BemissionsamountLine Bemissionsamount

Where products and data have been properly collected,
the DQR for Scope 1, 2 and 3 emissions is highly
regarded.

Alllocation

Product A

Alllocation

Data on Line B
not related to
Product A
production ismixed in.

When CO2 data for Product A is obtained by allocationof Scope 1, 2, and 3 emissions, data for other products
is mixed in. Therefore, the DQR of the mixed portion
should be reevaluated downward.

Figure 2-3-17 Replacement of DQR arising from allocation calculation
Source: Created by Mizuho Research & Technologies

Based on the above considerations, the DQR calculation method
for calculation based on organizational data is shown in Figure 2-318.

146

2-3. Organization-based calculation method

Illustration: DQR calculation method in Organization-based calculation◼

The DQR calculation method in Organization-based calculation has five indicators, but in this figure, it is expressed as one indicator for simplified representation.)*"S" stands for Scope and "C" stands for Category

Step 1: Set boundary

Scope 1 and 2

Scope 3 Upstream C1-8
C1 (Category 1)① Three levels of quality assessment of activities andemissions factors for all processes for Scope 1, 2
and 3 emissions included in the boundary

Manufacturing
process

Amount ofemissions

1,500

1

200

1

...

...

500

1

Step 2: Allocate by transaction value, etc.* andcalculate DQR
Allocate (determine the amount of emissions after allocationfor each process)Some processes not involved in customer transactions will
also be mixed in, but none of the DQR values by process will
be revised after allocation.
Company

Production

Input

Raw material A

Production Line A

Product A

Raw material B

Production Line B

Product B

Production Line Z

C5

C6

C7

C8

C1 (Category 1)
Amount ofemissionsC2

1

Raw material B

40

1

...

C5

C6

C7

C8

...
100

DQR

Power (JP)

2,000

1

Power (US)

3,000

1

Power (EU)

500

2

S2

S1
Manufacturing
process

300

Raw material Z

C4

DQR

Raw material A

...

C3

Amount ofemissions

Scope 1 and 2

Scope 3 Upstream C1-8

Manufacturing
process

S2

S1

1

Amount ofemissions

DQR

Power (JP)400

1Power (US)600

1Power (EU)100

2

Customer
Allocate 20% of emissions to customers
accounting for 20% of sales

...

...

...
Raw material Z③*Case assumption:
Products A and B delivered tocustomers; 20% of thecompany's total sales.

C4

Manufacturing
process

Raw material B

Raw material Z

C3

DQR

Raw material A

...

②

C2

Product Z data not related to customertransactions is mixed in, but DQR is not updated

Product Z

Calculate the DQR for CO2 data using a weighted averagebased on contribution to emissions.

Figure 2-3-18 DQR calculation based on organizational data

Calculate DQR for CO2 datausing a weighted average basedon contribution to emissions

DQR (CO2 data)
Source: Created by Mizuho Research & Technologies1472-3. Organization-based calculation method

Indirect data quality assessment by allocation level(6) Data reliability indicators◼ Group X, which manufactures six kinds of products, consists of Companies A and
B and Sites 1, 2 and 3.

③ Indirect data quality assessment by allocation level
•

•

•

•

In this document, "allocation level" is introduced as an additional
disclosure element for downstream operators to estimate the data
quality of CO2 data in Organization-based calculations.
In the FY 2022-2023 PoC project, many companies commented that,in order to estimate the quality of CO2 data in Organization-based
calculation, they needed to know to what extent process subdivision
was carried out and, conversely, to what extent a coarse allocation
calculation was made.
In Organization-based calculation, Scope 1, 2 and 3 emissions as anorganization are allocated to specific products and transactions
through process subdivision and allocation calculations.
There is a big difference in reliability between a calculation that
subdivides Scope 1, 2, and 3 emissions into processes by production
site and allocates site emissions by site production amount (value),and a calculation that allocates the Scope 1, 2, and 3 emissions of
the entire group by the production (sales) of the entire group.
To clarify this, businesses that choose Organization-based
calculation are required to disclose the allocation level (group,company, site, building, etc.) (see 3-2-2 below).

Group X
Company A

Site 1

Product 1a

Product 1b

Site 2

Product 2a

Product 2bSite 3

Product 3a

Product 3bCompany B

Emissions from other companies within the group andother sites within the company are mixed in.

1. Allocation level: By group

Total group emissions
Product 1a=emissions

Site 3Site 1

Production of all group products

×

Site 2

Product 1a

production
volume÷Total group emissions
Product 1a=emissions

Site 2Site 1Site 2

Product 1a=Site 1emissions
Site 3

Product 2a

Product 3a

Product 1b

Product 2b

Product 3b

Product output of Company A

×Product 1a

production
volume÷

Product 1a

Product 2a

Product 3a

Product 1b

Product 2b

Product 3bEmissions of other products from the same site are
mixed in.

Site 1 emissions

In summary, Organization-based calculations measure thequality of CO2 data by considering both the allocation leveland each DQR indicator.

Product 1aEmissions from other sites within the company are
mixed in.

2. Allocation level: By company

3. Allocation level: By site•

Scope 1, 2 and 3
calculated on a groupbasis

Site 2

Product production at Site 1
Product 1a× production ÷
volumeProduct 1a

Product 2a

Product 3a

Product 1b

Product 2b

Product 3b

Figure 2-3-19 Allocation levels
Source: Created by Mizuho Research & Technologies1482-3. Organization-based calculation method

Handling of DQR, etc., when used for Product-based upstream emission calculations•(6) Data reliability indicators④ Handling when used to calculate upstream emissions from Productbased calculations•

As noted in 2-1-3 (2), this document specifies the treatment of
PDS/DQR when CO2 data from Organization-based calculations isused to calculate upstream emissions from Product-based
calculations by downstream operators.

•

TThe use of organization-based CO2 data for the Product-based
calculation of emissions from upstream activities is permitted under
two conditions:•

Condition 1: That organization-based CO2 data shall be treated as
non-primary data (PDS=0) in Product-based calculation.

•

Condition 2: The DQR status of the Organization-based calculation
shall be ND (“No data to report”).

Organization-based calculation

Product-based CO2 data
Data may be used

Emissionsfrom upstream
activity

G-to-Gemissionsorganization-based
CO2 data
Data may be used

PDS and DQR both carry over

Product-based calculation

Product-based CO2 data•

It should be noted that the above processing is carried out by thedownstream business operator giving and receiving CO2 data, and is
not something that the suppliers calculating and providing CO2 dataneed to think about.

Data may be usedorganization-based
CO2 data

Emissionsfrom upstream
activity

G-to-Gemissions

Conditional use
Condition 1: Treated as non-primary data handling (PDS=0)
Condition 2: Data quality evaluation (DQR) is ND

Figure 2-3-20 Approach when Product-based and Organization-based
calculations are mixed (Figure 2-1 -3)
Source: Created by Mizuho Research & Technologies

1493. CO2 data sharing method

3-1. CO2 data sharing

Positioning and configuration of data disclosure elements
3-1. CO2 data sharing
Green x Digital
Consortium

3-1-1. Positioning of data disclosure elements in this document•

This section presents information (data disclosure elements) that
suppliers disclose when sharing data with suppliers.

•

Consistent with the Product-based methodology in this document,
the PACT Pathfinder Framework is paired with the Pathfinder
Network, and the technical requirements are presented in the
Pathfinder Network. Technical specifications and details can befound in the Pathfinder Network Technical Specifications, which
include information on data elements, API, and licenses for data
sharing.

•••

The GD Consortium Visualization WG set up a Tech Specifications
SWG in conjunction with the Methodology SWG (see 1-1) toexamine CO2 data exchange formats and cooperation methods
using digital technology.
The data disclosure elements presented in this document (CO2Visualization Framework v2) are intended to present the necessary
elements for data sharing. For the digital technology format andspecifications, please refer to the Data Format Linkage SWG study.
This document is intended to be widely used for social
implementation, but may be updated as appropriate in response tomethodological revisions in the overseas frameworks of partners.

Visualization WG

Methodology
Consider CO2 data
calculation and sharing
methods, etc.

Data Format andExchange SWG

Logistics
SWG

Consider data exchange
formats and exchange
methods using digitaltechnologies

Consider methods forcalculating CO2
emissions from transportand logistics(This document)
CO2 Visualization Framework Edition 2.0
Presents calculation methods and data quality disclosure methods for CO2
data exchanged throughout the entire supply chain using digital technologies(Only basic concepts are presented in relation to the calculation of CO2 data
for transportation and logistics)

Figure 1-1-1 Positioning of the Methodology SWG and this document
Source: Created by Mizuho Research & Technologies1513-1. CO2 data sharing

Process of preparing data disclosure elements
3-1-2. Process of preparing data disclosure elements•

This document aims to develop methods for calculating CO2 dataconsistent with international frameworks/platforms. Product-based
calculations are consistent with PACT Pathfinder Framework v2.

•

Pathfinder Framework v2 lists elements where data sharing isdesired in 6.1 Required elements for data exchange and Appendix
B: PCF Questionnaire.

SWG noted (a) the burden this would place on the data provider(data input side) and (b) the burden it would also place on thesystem implementation side, as well as the feasibility thereof.
Consequently, we ultimately decided to present the minimum
necessary elements for data sharing.
PACT
Technical

Pathfinder Network•

The Product-based data disclosure elements in this document are
based on the mandatory elements in Pathfinder Network Technical
Specifications for PCF Data Exchange (Version 2.1.0) based on
Pathfinder Framework v2 (January 2023).
‒ Pathfinder Network Technical Specifications for PCF Data
Exchange (Version 2.1.0; the current version of thespecifications) was selected as the basis for this document as themost appropriate choice in terms of technical alignment with
PACT toward social implementation.

•

•

•

Necessary elements were also added based on the results of the FY
2022-2023 PoC project and the METI/MoE Carbon Footprint
Guidelines.
The data disclosure elements for Organization-based calculation
were established based on SWG discussion based on elements in
Product-based calculation.
In addition, the SWG suggested that as many disclosure elements
as possible should be set from the viewpoint of data analysis.
However, the Visualization WG and the Data Format and Exchange

Pathfinder

Technical

Pathfinder

Specifications for PCF

Framework v1

Specifications

Framework v2

Data Exchange

7.1

USE CASE 001

6.1.1

VersionAppendix B

Version 1.0.0

Appendix B

2.0.1

Reflect

Use as a base

Visualization
WG

CO2Visualization
Framework v.1

Use as a base

PoC

Reflect

CO2
Visualization
Framework v.2

Data disclosure elements

Data disclosure elements

Reflect

Reflect

Results of Tech Specifications SWG discussion
Views of Visualization WG/Data Format and Exchange SWG

Reference

METI/MoE
Carbon Footprint Guidelines

Figure 3-1-2 Process of preparing data disclosure elements
Source: Mizuho Research & Technologies and NTT Data Group

152

3-1. CO2 data sharing

Composition of data disclosure elements
3-1-3. Composition of data disclosure elements•

The composition of the data disclosure elements is as follows:(1) Basic information•

Specific data disclosure elements are presented in 3-2.

Set of elements for disclosing company information or informationon the product itself(2) Calculation conditions•

Set of elements for disclosing the prerequisite information for CO2
data calculation•

Standards referenced, declared unit, boundary, allocation method,etc.

1

Basic information•

Set of elements to disclose CO2 data calculation results and otherrelevant information
Relevant information: Gate-to-gate emission data provided inconjunction with cradle-to-gate emission data and certificates used

(4) Data quality•

Set of elements for disclosing information related to the data qualityof the CO2 data•

Comprises Primary Data Share and Data Quality Rating.

•

Please note that the above structure is intended to help users
understand this document, and differs from the arrangement andorder of the Tech Specs toward Data Exchange (Version 2.0).

Calculation conditions• Items for disclosing corporate
information and productinformation• Items for disclosing prerequisite
information for CO2 data
calculation• Reference standards, declaredunits, data collection methods,
boundaries, allocation methods,
etc.

3

4

(3) Calculation results•2

Calculation results• Items to disclose CO2 data
calculation results and related
information• G-to-G emissions data provided inconjunction with C-to-G emission
data and certificates used.

Data quality• Items to disclose information
related to the data quality of theCO2 data provided• PDS and DQR

Figure 3-1-3 Composition of data disclosure elements
Source: Created by Mizuho Research & Technologies1533-1. CO2 data sharing

Notes on input: (1) Disclosure elements vary by calculation method
3-1-4. Notes on input of data disclosure elements

calculation methods, but the description method differs. For
Product-based calculation, the processes included in the boundary
are noted. For Organization-based calculation, since Scope 1, 2 and3 emission data are assumed, the scope and categories included in
the boundary can also be noted (Type b).

(1) Selection and description of data disclosure elements that vary by
calculation method•

This document permits the sharing of CO2 data calculated using two
calculation methods: Product-based calculation and Organizationbased calculation. The existence of two calculation methods gives
rise to the following typologies of data disclosure elements:•

Data model specification version is an element that needs to bestated only for Product-based calculation. This is because the entry
lists the version of the Pathfinder Framework referenced and istherefore not relevant to Organization-based calculation, acalculation method not based on the Pathfinder Framework (Type c).

•

The company entering the data should select the appropriate
disclosure elements and the method for describing them inaccordance with the calculation method chosen.

‒ Type a: Same elements, same description method‒ Type b: Same elements, different description methods‒ Type c: Items required for only one calculation method•

For example, the company name must always be disclosed
regardless of the calculation method, and the description method is
the same (Type a).

•On the other hand, the boundary needs to be disclosed in both
Data disclosure element
Type a: Same elements and description method

Example: Company name

Type b: Same elements, different description methods

Example: Boundary

Type c: Items required for only type of calculation

Example: Data model specification
version

Product-based calculation

Organization-based
calculation

Company name

Processes included

Scope and categories included

Data model specification
versionFigure 3-1-4 Calculation methods and data disclosure elements
Source: Created by Mizuho Research & Technologies1543-1. CO2 data sharing

Notes on input: (2) Distinguishing between Product-based and Organization-based calculation
3-1-4. Notes on input of data disclosure elements

there are cases in practice in which the boundary between the two
calculation methods is blurred, and it was decided to introduce typesof calculation methodologies and standards as criteria.

(2) Distinguishing between Product-based and Organization-based
calculation
As described in 1-4-2 (4), the distinction between Product-based andOrganization-based calculation is based on the type of methodology andstandards referenced.
•

Specifically, the party inputting the data must:‒••

Determine whether the methodology and standards referenced in
CO2 data calculation pertain to Product-based or Organizationbased calculation;‒

Determine whether the calculation method they themselves haveused was a Product-based or Organization-based calculation; and‒In terms of data disclosure, (i) enter Product-based orOrganization-based calculation in the data disclosure field"Calculation method," and (ii) as a means of determining which
method was used, enter the methodology and standards
underpinning the calculation iin the data disclosure field“Standards referenced.” (This field is divided into two types:“Cross-sectoral," which is mandatory, and "Product or sectorspecific," which is optional.)

The relationship between the various standards and guidance used
for CO2 calculation and Product-based and Organization-based
calculation is shown in Figure 3-1-5. If the methodology followed is
unknown, it shall be deemed Organization-based calculation.
The reason for adopting such a roundabout approach todistinguishing between Product-based and Organization-based
calculation is that, as shown in Section 1, “SWG Discussion: (2),"•Consistency between the calculation method and the standards
referenced is evaluated by the downstream operator using the data.
Calculation method and referenced standards are input

Data disclosure
element
Calculation method

Mandatory:
Crosssectoral

Standards
referenced*

Optional:
Productor
industryspecific

Product-based
calculation

Organization-based
calculation

Select calculation method used by company performing the calculation(product ⇔ organization)

Examples of standards: (Freeform entry)• ISO 14067:2018• ISO 14040/14044• ISO 14025• ISO T/S 14027• GHG Protocol ProductStandard• Pathfinder Framework• GD Consortium
Product-based calculation[Examples of standards: (Freeform entry)• GHG Protocol Scope 3
Standard, Chapter 8• GD Consortium
Organization-based
calculation

Examples of standards: (Freeform entry)• Together for Sustainability•

Others (describe)* Multiple answers possible. Typical standard and guidance areshow in 3-2-2: Calculation conditions

Downstream operators using the data evaluate the consistency of what they are inputting withcalculation methods and the standards referenced

Figure 3-1-5 Input and evaluation of Product-based and Organizationbased calculation
Source: Created by Mizuho Research & Technologies1553-1. CO2 data sharing

Notes on input: (3) Data disclosure requirements are phased
3-1-4. Notes on input of data disclosure elements•(3) Data disclosure requirement levels•

Each of the data disclosure element groups shown in 3-2 onward
indicates the disclosure requirement level.

•

There are three levels: M, R, and O.
‒“M”: Mandatory‒“R”: Recommended (optional but should be made wheneverpossible)‒“O”: Optional

Mandatory

Optional* As noted in 4-2-1 (4), Pathfinder Framework v2 requires companies
to meet third-party assurance and verification requirements, but also
states that if a company is unable to meet these requirements before
exchanging the data, the company may still exchange it through thePathfinder Network, provided that it makes transparent to what extent
the assurance requirements were fulfilled or not. (Pathfinder
Framework v2, page 53).

•

Assurance and verification requirements include addressing therequirements of the Pathfinder Framework, which of course includes
addressing the minimum data elements required.

•

In other words, Pathfinder Framework v2 too specifies elements thatmust be disclosed but also recognizes that in reality there will beelements that cannot be disclosed and permits data exchange on thecondition that incomplete compliance is specified.

•This document takes the same view.

M

Optional:
High priority
Optional:
Low priority

There may be situations in which it is not possible to disclose anelement marked “M”. In such cases, it is also permissible toexchange data as long as it is specified that the disclosure is made incircumstances that do not permit the disclosure of mandatory
elements.*

R

O

Figure 3-1-6 Data disclosure requirements
Source: Created by Mizuho Research & Technologies156

3-2. Data disclosure elements

Data disclosure elements (Basic information 1/2)
3-2. Data disclosure elements•

Hereafter, we will present specific data disclosure elements in terms of basic information, calculation conditions, calculation results, and data
quality. The name of the data disclosure element basically equates to the element name in Tech Specs toward Data Exchange v.2.

•

The necessary information is shown for each element (in other words, what data needs to be collected and ascertained). Please refer to the theexplanation in Tech Specs toward Data Exchange v.2 regarding the specific input method for each element, etc.

3-2-1. Basic information

Data disclosure element

GD
Consortium
specification

Calculation method

Request level(M, R, O)

Company name

-

Both

M

Company nameCompany ID

-

Both

M

Company ID that uniquely identifies that company, such as its DUNS Number, ISIN,or ticker code

Product name

-

Both

M*

Product nameProduct ID

-

Both

M*

Product ID

Product category (CPC code)

-

Both

M*

Product category (CPC Code)Framework edition

○

Both

M

•
•

Edition of the referenced CO2 Visualization Famework
When this document is referred to, Edition 2.0••

Referenced version of Pathfinder Framework
When exchanging CO2 data from Product-based calculations with overseas
companies, Pathfinder Framework version information is also provided.
When this document is referred to, Version 2.0

Corporate
information

Product
information

Data model spec version-

Product baseM

Description•

Product description

-

Both

M*

Product description

Comment

-

Both

M

Comments that encourage interpretation and evaluation outside of the productdescription

Digitally recorded signature

-

Both

O

Digital signature covering all CO2 data

* "O" if the CO2 data provided is "transaction unit" rather than "product unit" in Organization-based calculation (see 2-3-2(4) (2) of this document)157

3-2. Data disclosure elements

Data disclosure elements (Basic information 2/2)
3-2-1. Basic information (continued)
GD
Consortium
specification

Calculation method

Request level(M, R, O)

Data generation time

-

Both

M

Datetime of data generation

Data ID

-

Both

M

ID to identify the created data

Data version (revision no.)

-

Both

M

Version of the data created

Data update time

-

Both

M

Date and time the data was updated

Data disclosure element

Description158

3-2. Data disclosure elements

Data disclosure elements (Calculation conditions 1/5)
3-2-2. Calculation conditions
Data disclosure element

GD
Consortium
specification

Calculation
methodRequest level(M, R, O)

Description•

Standards referenced (crosssectoral)

-

Both

M

Standards and guidance referenced

Typical standards and guidance are listed below (other standards and guidance can also be entered):<Product-based calculation>• ISO 14067:2018, ISO 14040/14044, ISO 14025, ISO T/S 14027• GHG Protocol Product Standard• Pathfinder Framework v2• METI/Moe Carbon Footprint Guidelines• CO2 Visualization Framework Product-based calculation (2-2)<Organization-based calculation>• GHG Protocol Scope 3 Standard• CO2 Visualization Framework Organization-based calculation (2 -3)•Standards referenced (product- or
sector-specific)

-

Both

O

Calculation method

○

Both

M

Methodology for calculation ofbiogenic carbon

-

Both

•
O (M as of 2025) •Standards and guidance referenced

Typical standards and guidance are listed below (other standards and guidance can also be entered):<Product-based calculation>• PEFCR, PCR• Together for Sustainability, Plastic Europe, GLEC, RMI (Steel sector)•

Calculation method adopted (Product-based or Organization-based calculation)
Name of the methodology referred to in calculating emissions and biogenic carbon removals
Until 2025, enter the methodology used only if the data provided includes emissions or removals ofbiogenic carbon

159

3-2. Data disclosure elements

Data disclosure elements (Calculation conditions 2/5)
3-2-2. Calculation conditions (Continued)
Data disclosure element

Declared unit

GD
Consortium
specification-

Calculation
methodBoth

Request level(M, R, O)M

Description

•
•
•
•

Display unit of CO2 data*
When CO2 data is displayed as “XX kg-CO2e/kg," "kg" corresponds to the declared unit
For Product-based calculation, "kg," "L," "m3," "kWh," "MJ," "tkm" and "m2" can be selected.
In addition to the above, "yen" can be selected for Organization-based calculation.

•

The unit quantity of products and transactions subject to CO2 data calculation, expressed as the declared
unit quantity*
Example 1: When CO2 data for a product weighing 5 kg per unit is displayed in declared units =kg, theproduct quantity is 5.
Example 2: When CO2 data for a transaction of 1 million yen is displayed in declared units = yen, theproduct volume is 1 million.

•
Product quantity(Quantity per declared unit)

•
-

Both

M

*In the case of Example 2, "transaction amount" is easier to understand, but increasing the number of
disclosure elements also increases the complexity.
"Product quantity" shall be used in conjunction with “transaction amount." Also indicate this in the "Productquantity: Description column" below.
••
Product quantity: Description
field

○

Both

R

•
•

Space to add a description of "product quantity" and "declared unit"
Example 1: "For a product weighing 5 kg per unit, the declared unit was set to kg, so the product quantity
was set to 5."
Example 2: “With regard to the 1 million yen transaction, the declared unit was yen, so the productquantity was set at 1 million."
Where the currency unit (yen, dollar, etc.) is used as the declared unit in Organization-based calculation, it
is difficult to distinguish between product unit CO2 data and transaction unit CO2 data, so this should be
explained in this column.

*For application of the declared units and product quantity, see:・ 2-2-3 (4) for Product-based calculation
・ 2-3-2 (4) for Organization-based calculation160

3-2. Data disclosure elements

Data disclosure items (Calculation conditions 3/5)
3-2-2. Calculation conditions (continued)
GD
Consortium
specification

Calculation
methodRequest level(M, R, O)

Description of the target
process-

Product-based

M••

Enter processes included in the PCF calculation
Processes that are attributable processes and that were not cut off byapplication of the exemption rule

Calculation category○

organizationbased

R••

Scope and category of CO2 data
If some scopes or categories are excluded (e.g., Scope 2 officebuilding lighting), this can also be entered.

•

Total emissions resulting from attributable processes that are
excluded from CO2 data calculation due to the application of the
exemption rules
Enter as the ratio when cradle-to-gate CO2 data is set to 100%

Data disclosure element

Description

Boundary

Exemption rules (cutoff rules)
appliedCutoff:%

-

Both

M
•
•

Describe attributable processes that are excluded from CO2 data
calculation and the reasons for the exclusion.

•

Version of the IPCC report from which the GWP used originated (100year value)•

Information about secondary data sources, such as the databaseused
Example: IDEA vX.X

Cutoff: Explanation

-

Both

M

IPCC version of the GWPcharacterization factor

-

Both

M

Secondary data emission
factor-BothR

Data collection period

Data collection period

-

Both

M

Period of data collection

Geographic scope of datacollection

Geographic scope of datacollection

-

Both

M

Geographic area where data was collected

Data sources•161

3-2. Data disclosure elements

Data disclosure elements (Calculation conditions 4/5)
3-2-2. Calculation conditions (continued)

Allocation of Productbased calculations

Allocation ofOrganization-based
calculations

Data disclosure element

GD
Consortium
specification

Calculation
methodRequest level(M, R, O)

Allocation rules-

ProductbasedO

Allocation level: Scope 1○

organizationbased

M

Allocation level: Scope 2○

organizationbased

M○

organizationbased

Allocation level: Scope 3

M

Description••

Standard used for allocation in Product-based calculation
If the allocation hierarchy in 2-2-4 (4) of this document is followed, thenwrite “Pathfinder Framework v2 allocation hierarchy"••

Allocation level in Organization-based calculation CO2 data calculation
For example, if the total emissions of the entire organization are allocatedby the total output of the entire organization, etc., enter "Organizationlevel"; if the emissions of each production site are allocated by the total
output of the sites, etc., by process subdivision, enter "Site level."•Same as above.

••

The entry concept the same as for Scope 1 and Scope 2.
If the allocation level varies by category, indicate the allocation level for the
category that accounts for the majority of emissions
Allocation levels for other categories can be entered in the description field.

•
Allocation level: Description field○organizationbasedO••

Free-form entry for further description of “allocation level"
For example, if the level of allocation differs between Scope 3 categories,
the level not included in Scope 3 can be entered here.

162

3-2. Data disclosure elements

Data disclosure elements (Calculation conditions 5/5)
3-2-2. Calculation conditions (continued)
GD
Consortium
specification

Calculation
methodRequest level(M, R, O)

Allocation metric: Scope 1○

organizationbased

M

Allocation metric: Scope 2○

organizationbased

M

Data disclosure element

Allocation of Organization-based
calculations (continued)
Allocation metric: Scope 3○

Organization-levelM

Description•

Include the metrics used to allocate Scope 1 emissions
E.g. physical metrics (weight, amount, etc.), economic metrics (production)•

Include the metrics used to allocate Scope 2 emissions
E.g. physical metrics (weight, amount, etc.), economic metrics (production)•

The data entry concept is the same as for Scope 1 and Scope 2.
E.g. physical metrics (weight, amount, etc.), economic metrics (production)
If the allocation metrics differ by category, indicate the allocation metrics forthe category that accounts for the majority of emissions
Allocation metrics for other categories can be entered in the description field.

••

Allocation metric:
Description field○

Organization-levelO••

Free-form entry for further description of allocation metrics
If the allocation metrics differ between Scope 3 categories, allocation metrics
used for the categories that could not be filled out in Allocation metrics: Scope
3 can be entered here.

163

3-2. Data disclosure elements

Data disclosure elements (Calculation results 1/5)
3-2-3. Calculation results
Data disclosure element① Total emissions (excluding biogenic
emissions and removals)

GD
Consortium
specification

Calculation
methodRequest level(M, R, O)

Description

•
•
-

Both

M
•

CO2e emissions per
cradle-to-gatedeclared unit
(total emissions)••② Total emissions (including biogenic
emissions and removals)

-

Both

O (M from2025)•

Carbon emissions per declared unit (kg-CO2e)
Biogenic emissions and removals are not included (excluding (10), (11),(12) and (13) below).
Many of the currently reported product carbon footprints (PCF, CFP) fallunder this heading

Carbon emissions per declared unit (kg-CO2e)
Includes biogenic emissions and removals (including (3), (4), (5) and (6)below)
From 2025, when calculation of biogenic emissions and removals will
become a requirement, calculation of (2) including biogenic emissions andremovals will also be required in addition to (1).

164

3-2. Data disclosure elements

Data disclosure elements (Calculation results 2/5)
3-2-3. Calculation results (continued)
Data disclosure element③ Emissions from direct land-use change

CO2e emissions per
cradle-to-gatedeclared unit
(related to biogenic
emissions andremovals)

GD
Consortium
specification

Calculation
methodRequest level(M, R, O)

-

Both

O
(M from 2025)④ Emissions or removals from land
management-⑤ Other biogenic carbon emissions-⑥ Amount of biogenic carbon removal

-

Both

Both

Product-basedO(M from 2025)

O(M from 2025)

O(M from 2025)

Description

•
•
•
•
•
•
•
•
•

⑦ Emissions from indirect land-use change

-

Both

O
•

Emissions from land-use change owned and controlled by the disclosing
company or in the supply chain (kg-CO2e)
Calculation required from 2025
Amount absorbed and removed due to land management changes (kgCO2e)
Calculation required from 2025
All biogenic carbon emissions from ③ and ④ related to the manufacture
and transport of products not included in (7) (kg-CO2e)
Calculation required from 2025
Amount of biogenic carbon removals from products in declared units(kg-CO2e)
Calculation required from 2025
Emissions from land-use change not owned or controlled by thedisclosing company and not in the supply chain (kg-CO2e)
Not included in CO2 data, but reported separately

165

3-2. Data disclosure elements

Data disclosure elements (Calculation results 3/5)
3-2-3. Calculation results (continued)
Data disclosure element⑧ Emissions from fossil fuels

GD Consortium
specification

Calculation
methodRequest level(M, R, O)

-

Both

M

Description① Direct emissions (kg-CO2e) from use (fossil fuel combustion, etc.),
fugitive emissions, and process emissions within total emissions••⑨ Carbon content from fossil fuels-

Product-based

M•

Other data related
to CO2e emissions
per cradle-to-gatedeclared unit••
⑩ Biogenic carbon content-

Product-based

M•

Carbon mass derived from fossil fuels per declared unit included in the
product (kg-C)
This element was not initially required in carbon footprint calculation, but
was introduced in conjunction with (10) in order to evaluate emissions
from disposal by incineration of procured products by downstream
businesses.
For the time being, is it realistic to use stoichiometric calculations basedon a composition formula? If CO2 data exchange within the supply chain
becomes widespread, it will be possible to respond by leveraging
information provided by upstream suppliers.
Biogenic carbon mass per declared unit included in the product (kg-C)
This element was not initially required in carbon footprint calculation, but
was introduced in conjunction with (9) in order to evaluate the emissions
from disposal by incineration of procured products by downstream
businesses.
For the time being, is it realistic to use stoichiometric calculations basedon a composition formula? If CO2 data exchange within the supply chain
becomes widespread, it will be possible to respond by leveraging
information provided by upstream suppliers.

⑪ Emissions from aircraft engines

-

Both

O

CO2 emissions of aircraft engines related to product transport (kg-CO2e)⑫ Flag for packaging emissions

-

Both

M

Indicate whether carbon emissions from packaging are included⑬ Product packaging emissions

-

Both

O

Carbon emissions from packaging (kg-CO2e)166

3-2. Data disclosure elements

Reference: Handling the various data disclosure elements related to emissions•

The data disclosure elements related to emissions introduced in thissection are relisted below:(Bold: Items that must be disclosed as of March 2024)‒① Total emissions (not including biogenic emissions andremovals)‒② Total emissions (including biogenic emissions and removals)‒③ Emissions from direct land-use change‒④ Emissions or removals from land management‒⑤ Other biogenic carbon emissions‒⑥ Amount of biogenic removal‒⑦ Emissions from indirect land-use change‒⑧ Emissions from fossil fuels‒⑨ Carbon content from fossil fuels‒⑩ Biogenic carbon content‒⑪ Emissions from aircraft engines‒⑫ Flag for packaging emissions‒⑬ Emissions resulting from product packaging•

Many readers may have been surprised by the number of data
disclosure elements related to emissions and the presence of
unfamiliar data disclosure elements ((2)-(13)).

•

Many of these elements were introduced by the Pathfinder
Framework and ISO 14067, which required this document to follow

suit.
•

In regards to the difficulties envisaged in dealing with the list on theleft, note that companies are not yet required to perform thesecalculations, and that it will become easier as data exchange in the
supply chain advances.

•

For example, data disclosure elements (2) -(7) in relation tobiogenic emissions and removals and land use start to be addressedin 2025. In addition, significant land-use emissions and removals
occur at the very top of the supply chain, and in an era when data isprovided by upstream suppliers, the difficulty of responding will be
reduced.

•New elements such as data elements (9) and (10) can also be
passed downstream if data is provided by upstream suppliers that
manufacture materials and components.

•

Of the data disclosure elements required at present, (1) and (8)arealready being calculated as part of the calculation of product carbon
footprints and Scope 1, 2, and 3 emissions.

•⑨ and ⑩ are new data disclosure elements that have alreadybecome requirements, but companies can engage in data exchangeeven if they do not address these elemenst as long as they clearly
indicate this. Companies struggling to address these elements might
therefore choose to engage in data exchange without addressing
them until data is provided by upstream suppliers.

167

3-2. Data disclosure elements

Data disclosure items (Calculation results 4/5)
3-2-3. Calculation results (continued)
Data disclosure element
Amount of certificates used (including
J-credits derived from renewableenergy)Supplementary
information on
calculation
results

GD
Consortium
specification

Calculation
methodRequest level(M, R, O)

○

Both

R

Use of unbundled certificates per declared unit (kWh)Description

Type of certificate (including J-credits
derived from renewable energy)

○

Both

R

State the type of certificate used
< Input examples in Japan >• Non-fossil certificates (with a renewable energy designation)• Green power certificates• J Credit (renewable energy generation)< Input example overseas >• GO, US-REC, I-REC, Indian REC, Korean REC, Australian REC, NZREC, REGO, TIGR,
T-REC

Explanation of uncertainty assessment

-

Both

O

Include the results of the assessment, the main factors, and a qualitative description of
the assessment.

168

3-2. Data disclosure elements

Data disclosure items (Calculation results 5/5)
3-2-3. Calculation results (continued)
Data disclosure element

Gate-to-gate emissions(excluding biogenic emissions andremovals)

GD
Consortium
specification

Calculation
methodBoth○

Description•(1) Total emissions (not including biogenic emissions and removals) from thecompany’s gate-to-gate boundary (kg-CO2e)•

Gate-to-gate CO2 data in addition to cradle-to-gate for upstream emission structure
analysis (see 1-4-8 ), if available
Or, if a business operator that cannot follow the cradle-to-gate method is forced to
calculate and provide data using the gate-to-gate method (see 1-4-6 (4) of thisdocument), put that in this field.

•○

CO2e emissions
per gate-to-gatedeclared unit
(Total emissions)Gate-to-gate emissions(including biogenic emissions andremovals)Request level(M, R, O)R•

If a downstream operator uses gate-to-gate emission data provided by a supplier thatis unable to follow the cradle-to-gate method for its Scope 3 calculation, it must
supplement that supplier's upstream emissions.

•(2) Total emissions (including biogenic emissions and removals) from the company’sgate-to-gate boundary (kg-CO2e)•

Gate-to-gate CO2 data in addition to cradle-to-gate for upstream emission structure
analysis (see 1-4-8), if available
Or, if a business operator that cannot follow the cradle-to-gate method is forced to
calculate and provide data using the gate-to-gate method (see 1-4-6 (4) of thisdocument), put that in this field.

••

If a downstream operator uses gate-to-gate emission data provided by a supplier thatis unable to follow the cradle-to-gate method for its Scope 3 calculation, it must
supplement that supplier's upstream emissions.

169

3-2. Data disclosure elements

Data disclosure elements (Data quality 1/2)
3-2-4. Data quality
Data disclosure element
Primary data
sharePrimary data share% coverage

Technologicalrepresentativeness

GD
Consortium
specification

Calculation
methodRequest level(M, R, O)-

Product-basedM

Product-based

O (M from 2025)

organizationbasedO

Product-based

O (M from 2025)

organizationbasedO

Product-based

O (M from 2025)

organizationbasedO

Product-based

O (M from 2025)

organizationbasedO

Product-based

O (M from 2025)

organizationbasedO

Product-based

O (M from 2025)

organizationbased

O

-

-

Temporal
representativeness-

Geographicalrepresentativeness-

Data Quality
RatingCompleteness

Reliability--

Description

Primary data shareo of CO2 data provided

Percentage of CO2 data subjected to data quality assessment

Technological representativeness of emission factor based on data quality matrix

Temporal representativeness of emission factor based on data quality matrix

Geographical representativeness of emission factor based on data quality matrix

Completeness of activity based on data quality matrix

Reliability of activity based on data quality matrix

170

3-2. Data disclosure elements

Data disclosure elements (Data quality 2/2)
3-2-4. Data quality (continued)
Data disclosure element
Assurance or verification
conducted

GD
Consortium
specification

Calculation method

Request level(M, R, O)

－

Both

R

Description••

Answer Yes/No to assurance/verification by third party
answer the following regarding assurance/verification content••

Level of emissions data assured/verified
Organization level, product series level, PCF calculation system level, individual
product level (for Organization-based calculation, the transaction level can also be
stated)Coverage*

－

Both

O

Assurance level*

－

Both

O

•

Limited or reasonable assurance

－

Both

O

•

Is the boundary gate-to-gate or cradle-to-gate?

－

Both

O

•

Name of the party conducting the assurance/verification

Date of implementation

－

Both

O

•

Completion date of assurance/verification

Rules and standards withwhich assurance is compliant

－

Both

O

•

Rules and standards followed for assurance and verification

Statement

－

Both

O

•
•

Statement of assurance and verification
PDF attachment or electronic signature (in line with technical specifications)

Additional comments

－

Both

O

•

Additional comments on interpretation of assurance and verification

Assurance and Assurance boundary*verification
Assurance body**See also the discussion in 4-2-1 on coverage, assurance level, assurance boundary and assurance provider.

171

4. Assurance and verification of CO2 data•

Following Pathfinder Framework v2, the terms “assurance" and "verification" are used interchangeably throughout
this document.

4-1. Assurance and verification of CO2 data

Assurance and verification of CO2 data
4-1. Assurance and verification of CO2 data•

With the advent of the era in which CO2 data is exchanged insupply chains using digital technologies, it is expected that thirdparty verification of data will gain increasing importance.

‒ Companies that calculate CO2 data in accordance with thePathfinder Framework, the international framework presented
in Chapter 2-2 of this document, may wish to demonstrate to
the public that their results are internationally acceptable. They
will look to obtain third-party verification as an effective meansof achieving this.

Verification of CO2 data from
Product-based calculation

Pathfinder Framework
approach

Verification of CO2 data from
Organization-based calculation

Scope 3 Standard
approach‒ Downstream operators may also want to have assurance that
the CO2 data they receive is calculated in accordance withauthoritative methodologies and standards.

•

This section addresses verification in relation to the CO2 data
calculation and data sharing methods presented in this document
in Section 2 and 3 respectively, examining both Product-based andOrganization-based calculation.

•

The basic approach of this document is that:‒ Verification of data from Product-based calculation will adopt
the Pathfinder Framework approach.

‒ Verification of data from Organization-based calculation will
adopt the approach of the GHG Protocol Scope 3 Standard,
which is the only standard that provides guidance on thismethodology.

173

4. Assurance and verification of CO2 data

4-2. Assurance and verification of CO2 data from
Product-based calculations

4-2. Verification of CO2 data from Product-based calculations

Verification concepts in the Pathfinder Framework
4-2. Verification of CO2 data from Product-based calculations•

As noted above, CO2 data verification from Product-data based
calculations follows the Pathfinder Framework approach.

provide examples of recommended standards.
•

4-2-1. Pathfinder Framework approach to verification••

This section introduces the approach to assurance and verificationof PCF data in Pathfinder Framework v2 (PFv2; the current version
at the time of this document's preparation) and outlines thisdocument’s interpretation.
Our conclusions are summarized in 4-2-2.

(3) The “what” of verification: (1) Mandatory third-party verification•

PFv2 requires that verification of the PCF shall be done by anindependent third party (p. 15).

•

At the same time, if a company is unable to meet the assurance
and verification requirements as defined in PFv2 before exchanging
data, the company may make the exchange through the Pathfinder
Network, providing the company makes transparent to what extent
the assurance requirements were fulfilled or not (p. 53).

•

Although the above concept emerged for the first time in PFv2, it isconsistent with the concept of balancing prescription andinclusiveness adopted in this document (see 1-4-1) and isconsequently also adopted in this document.

(1) No distinction between "assurance" and "verification"••

Although "assurance" and "verification" originally had different
meanings, PFv2 uses these terms interchangeably in relation to PCF
verification (p. 43).
Following PFv2, this document uses assurance and verificationinterchangeably.

The policy adopted by PFv2 of requiring only "what" in terms ofassurance is regarded as being based on the current situation interms of the provision of assurance and verification. This document
adopts the same approach for the same reason.

(2) The “how” of verification•

PFv2 defines the requirements and proposed outcomes of theassurance process (the “what” of assurance) but does not prescribe
the assurance process itself (i.e., the “how) (p. 44).

•

PFv2 requires assurance providers refer to additional assurance
standards for the “how” of the process (p. 44), but does not175

4-2. Verification of CO2 data from Product-based calculations

Pathfinder Framework approach to verification(4) The “what” of verification: (2) Compliance with the assurance
Roadmap•

In addition to requiring third-party verification, PFv2 requires that
this verification follows the considerations laid out in the Pathfinder
Framework’s roadmap (p. 15).

•

The PFv2 assurance roadmap comprises time horizons andassurance dimensions (Figure 4-2-1):‒ Time horizons• Short term: 2023–2025• Medium term: 2025-2030• Long term: 2030 onwards‒ Assurance dimensions• Coverage: Granularity of data to be assured• Conformance: Basis for the assurance• Boundary: Depth of the data to be assured• Level of assurance: Degree of confidence• Provider: Entity providing the assurance• Process cycle: Temporal validity of the assurance• Evidence: Guidance for consolidation• Application to SMEs: SME requirements•

subsequent pages.
•

As shown in the illustrations and explanations below, the PFv2
assurance roadmap sets very high-level requirements, such as
immediately requiring "reasonable assurance" (see below), and thisplaces a substantial burden on companies calculating CO2 data.

•

On the other hand, as previously noted, PFv2 allows data exchange
through the Pathfinder Network providing the company makes
transparent to what extent the assurance requirements were
fulfilled or not (PFv2, p. 53).

•

This document also adopts this concept, requiring compliance with
the PFv2 assurance roadmap but also allowing companies toexchange data providing that they make transparent to what extent
the assurance requirements were fulfilled or not.

The details of the assurance roadmap are shown in Figure 4-2-1 on
the next page and in the explanations of assurance dimensions on176

4-2. Verification of CO2 data from Product-based calculations

Illustration: Assurance roadmap overview◼
◼

Pathfinder Framework v2 requires compliance with the following assurance roadmap for PCF assurance.
Details of the requirements for each of the assurance dimensions are provided in the following pages.

Dimension

Short-term requirements(2023-2025)

Medium-term requirements(2025-2030)

Long-term requirements(2030 onwards)

Coverage
Granularity of data to be
assuredCorporate level

Representative product or PCF system

Representative product or PCF system

Conformance
Basis for the assurance

Any recognized standard

PCR or sector-specific guidance, if followed
If not, Pathfinder Framework

PCR or sector-specific guidance, if followed
If not, Pathfinder Framework

Boundary
Depth of the data to be
assuredGate-to-gate
Scope 1 and 2 for corporate-level

Dradle-to-gate

Cradle-to-gate

Level
Degree of confidence

Limited assurance

Limited assurance

Reasonable assurance

ProviderEntity providing the assurance

Independent third party

Independent third party

Independent third party

Process cycle
Temporal validity of theassurance

Annual3 years or earlier if variance >10%

3 years or earlier if variance >10%

Evidence
Guidance for consolidation

Evidence pack guidanceCompanies should use guidance around evidence consolidation to facilitate and streamline the assurance process (see below

Application to SMEs
SME requirements

Phased-in approach for SMEs
All requirements above identically apply to SMEs but with a 2-year time lag to allow for capacity building

Figure 4-2-1 Pathfinder Framework v2 assurance roadmap
Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2177

4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (1) Coverage (1/2)(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)•

In the next pages, we provide details of the requirements for eachassurance dimension.

■ Steps for Options A and B• PFv2 sets out the implementation steps for Options A and B as
follows.

① Coverage

PFv2 summary•

Option A
Product line assurance

Option B
Verification of PCF
calculation system

Step 1

Pick representative
product (RP) by defining
the product line it represents

Define what constitutes
the PCF system

Step 2

Assure RP in accordancewith PFv2 requirements

Assure whether the tool(s)calculate(s) company PCFs
following PFv2 requirements

Step 3Use assurance statement of
RP as proof of verification forany product within productline, provided explanation on
representativeness is given

Use assurance statement of
PCF system as proof of
calculation being alignedwith Pathfinder Framework.
Communicate data inputs
have not been assured.

Coverage defines the type and level of GHG data to be assured(e.g., corporate level, product line level, or PCF level).

■ Short-term (2023-2025)• Companies shall assure emissions data at the corporate level.

Assurance on a more product-specific level, such as product line or
product level, is desirable but not required.

■ Medium-term (2025-2030) and long-term (2030 onward)• Companies shall assure PCFs are aligned with Pathfinder
Framework requirements).

• When warranting multiple PCFs, there are ways to avoid having to
get direct assurance for individual PCFs:‒ Option A: At the product-line level, where the PCF of arepresentative product is assured‒ Option B: By verifying the underlying methodology used by asystem (e.g., software) for the purpose of PCF calculation• Please note that companies may still need to verify specific PCFs at
the product level if regulations or customers require it.

Figure 4-2-2 Two options for multiple PCF assurance
Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2 5.3.3

178

4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (1) Coverage (2/2)(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)① Coverage (continued)•

Explanation: Assurance for short-term corporate-level emissions
•

•
•

•

PFv2 requires coverage to be assured at the corporate level in the
short term and at the PCF level in the medium and long term.
Based on the boundary description below, it is clear that the shortterm corporate-level assurance refers to Scope 1 and Scope 2
emissions assurance.
Given that Scope 1 and 2 emissions are often calculated before PCF
calculation, assuring Scope 1 and 2 emissions prior to assurance on
a PCF basis could be said to be the typical flow.
The existence of a data collection and management system that canwithstand the Scope 1 and 2 emission assurance process at thecorporate level will also have a positive impact on the PCF
calculation process and assessment of the reliability of the results.
However, this does not mean that PCFs cannot be calculated orassured unless Scope 1 and 2 emissions are calculated or assured.
In the short, medium, and long term, PCF assurance is possible if
the company can engage in PCF calculation and provide informationin accordance with the evidence pack (companies are not required
to provide emission data or assurances for Scope 1 and 2 emissions,
noted below). At this time, it is not necessary to assure Scope 1
and 2 emissions.

specific PCF assurance is not required when multiple PCFs havebeen assured.
The proposed simplified method comprises of the following two
types:‒ PCF assurance for a representative product is considered toassure the PCFs of other products in the same product series
that share multiple similarities with the representative product.
(Option A: Product line assurance)‒ Assurance that the PCF calculation system can perform

calculations in accordance with PFv2 requirements is considered
to constitute assurance of the calculations for multiple PCFs
output by that system. (Option B: PCF calculation systemassurance)••

Given that suppliers have been required to calculate PCFs for
multiple of their products and provide them to downstream
operators under assurance, the PFv2's approval of the above
simplified methods is welcome.
This document also recognizes these two simplified methods andrecommends their application.

Explanation: Assurance for multiple PCFs•

PFv2 proposes a simplified method based on the idea that product179

4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (2) Conformance(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)➁ Conformance
PFv2 summary• The assurance process verifies whether emissions data output wascalculated according to methodological rules. The conformance of
the assurance defines adherence to which standard is verified, i.e.,
which methodological standards serves as the reference.

■ Short-term (2023-2025)•

Companies may use any recognized standard included in Appendix
C (Figure 4-2-3) as the basis for corporate-level assurance.

•

Companies wishing to go beyond the minimum coverage
requirements of PFv2 guidance and assure on a product-specificlevel may use any of the recognized standards set out in Appendix
C (Figure 4-2-3) as the basis for assurance.

■ Medium-term (2025-2030) and long-term (2030) onwards• Companies should use the Pathfinder Framework as themethodological basis for assurance and verification.

• Please note that, in line with the standards hierarchy established in
PFv2 Section 3.1 (2-2-2 in this document), companies may berequired to calculate certain PCFs following PCR or sector-specificguidelines.

encouraged, but not required.

• Any PCR or sector-specific methodology or standard used shall be

publicly disclosed and referenced in the assurance and verification
process as well as in the data exchange information to ensure
downstream users of the information have a complete
understanding of the conformance of the PCF.

Explanation• Conformance provides the standards on which assurance andverification must be based.

• For the assurance and verification of short-term corporate-levelemissions (equivalent to Scope 1 and 2), any of the standards in
Figure 4-2-3 can be used. Specifically, the following standards may
be referenced:‒ Organizational Environmental Footprint (OEF)‒ ISO 14064‒ GHG Protocol (Corporate Standard, Scope 2 Guidance, Scope 3
Standard) For the medium and long term, the hierarchy for application of

calculation rules presented in 2-2-2 of this document is repeated,
and there are no new requirements.

• In those cases, conformance with the PCR or sector specificmethodology shall be followed. Conformance with PFv2 is180

4-2. Verification of CO2 data from Product-based calculations

Key calculation standards recognized by the Pathfinder Framework◼

Pathfinder Framework v2 summarizes key calculation standards of the European Commission, ISO, and GHG Protocol referenced in the development of the
document as follows:

Publisher

Geographical focus

Corporate level

Product level

Specific to given
sectors

Specific to given
products

European Commission

EU

Organizational
Environmental
Footprint (OEF)

PEF

OEF Sector Rules(e.g. for retail)PEFCR(e.g. for IT equipment)

ISO

GlobalISO 14064

ISO 14067
ISO 14040
ISO 14044

ISO 20915:2018 for steel
products

PCR(e.g. ISO 22526 for biobased
plastics)

GHG Protocol(WRI/WBCSD)

GlobalCorporate, Scope 2 andScope 3 standards

Product Life Cycle
Standard

E.g., Agriculture Guidance

PCRs(e.g. PCRs for concrete)

Land Sector and Carbon
Removal Guidance

Figure 4-2-3 Calculation standards recognized by the Pathfinder Framework
Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2181

4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (3) Boundary(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)③ Boundary
PFv2 summary• The boundary of the assurance and verification, as its namesuggests, defines the boundary of life cycle stages included in theassurance processs.

• While the PCFs exchanged under the Pathfinder Framework arecradle-to-gate footprints, the boundary of the assurance andverification of the PCF can be broader, narrower, or equal to theboundary of the PCF.

■ Short-term (2023-2025)••

Companies shall assure their gate-to-gate emissions.
This requirement is, in part, a consequence of the initialcorporate-level coverage requirement (requiring the calculation of
corporate-level emissions in the short term). Gate-to-gateemissions on the company level are considered to be equivalent to
Scope 1 and Scope 2 emissions, as defined by the GHG Protocol.

Explanation• Given the scope of the short-term assurance coverage (at corporate
level) noted earlier, it can be seen that the gate-to-gate short-termcoverage in the assurance roadmap in Figure 4-2-1 equates to thescope of Scope 1 and 2 of the GHG Protocol.

• However, as described above in the “Coverage” section, companies
can assure PCFs if these are calculated in accordance with PFv2
requirements with information presented in accordance with theevidence pack (emission data and assurance for Scope 1 and 2
emissions do not have to be provided). At this time, assurance for
Scope 1 and 2 emissions is not necessarily required.

• PFv2 proposes that the boundary for medium and long term

assurance should be cradle-to-gate, following on from therequirements for PFv2 PCF calculation (a cradle-to-gate calculation
boundary).

■ Medium-term (2025-2030) and long-term (2030 onwards)• Companies shall ensure that the entire cradle-to-gate footprint of
PCFs has been verified, i.e., the entire footprint up to the point
where it is passed on downstream

Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2

182

4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (4) Level of assurance(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)④ Level of assurance(PFv2 summary)

Limited assurance

Reasonable assurance

Opinionstatements

Negative“Nothing has come to ourattention that the assurance
statement does not conformwith the Pathfinder
Framework and contains
material misstatements”

Positive“In our opinion the disclosure
conforms with all Pathfinder
requirements and is fairly stated in
all material aspects”

Application

Commonly used for
nonfinancial disclosures

Commonly used in financial
disclosures

Process

Limited in scope—different
or fewer checks thanreasonable assurances)

Greater sampling at a greater depth
and comprehensiveness• The level of assurance defines the degree of confidence in theassurance statement.

■ Short-term (2023-2025)• Companies shall conduct limited assurance.
■ Medium-term (2025-2030)• Companies shall conduct limited assurance.
■ Long-term (2030 onwards)• Companies shall conduct reasonable assurance.

Figure 4-2-4 Assurance levels comparison
Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2[Explanation]• PFv2 specifies that, with respect to the level of PCF assurance,

limited assurance is acceptable in the short and medium term, butreasonable assurance is required in the long term.

• As shown in Figure 4-2-4, limited assurance guarantees that noinconsistencies with PFv2 or material misstatements have beenfound, which is simpler than reasonable assurance, whereby thedisclosure is found to conform “with all Pathfinder requirements”
and to be “fairly stated in all material aspects.”• Traditionally, the GHG Protocol too has not gone so far as to call forreasonable assurance, which is used primarily in financial disclosures,
although Scope 1, 2, and 3 assurances provide two levels of
assurance: limited and reasonable.

• The fact that PFv2 requires the stricter “reasonable assurance” withthe condition of "2030 onwards" means that the level of reliability
required for PCF data will approach the reliability of financial
disclosures in the long run.

• While this is a high-level requirement, we agree that reasonableassurance is appropriate as an assurance level to be realized in thelong-term and accept it as an assurance requirement.
183

4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (5) Provider(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)⑤ Provider

previous assurance engagements around PCFs, sector-specificknowledge, and technical capabilities.

• Additional details on criteria to consider when selecting anassurance provider are as follows:

PFv2 Summary

Requirements for choosing assurance providers• The provider of the assurance is the entity that verifies the

1. Expertise and experienceemissions data.

• Proven experience conducting assurance engagements and applying assurance‒ When the reporting company also performs the assurance, this• Capabilities around LCA and carbon accounting, as shown by experience,‒ When a party other than the reporting company performs the

2. Industry and sectoral knowledge

is known as first-party assurance.

assurance, this is known as third-party assurance.

• Companies shall choose an independent third party to conduct theverification process.

• While first-party quality controls and plausibility checks areencouraged, they do not suffice to fulfill the assurance
requirements of this guidance.

• Companies may choose any qualified assurance provider, as long as
the provider meets the expertise requirements to conduct anassurance engagement. Proof of such expertise may include

standards

educational qualifications, and tools used•

Understanding of the underlying industry that the PCF data to be assured
belongs to•Understanding of business operations within the sector which the product or
corporation belongs to

3. Credibility• Proof of no conflicts of interest between the assurance provider and reporting
company• Proof of successful verification processesability
4. Capacity• Enough staff capacity to conduct the assurance engagement
Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2

Explanation• The term "self-declaration" no longer appears in PFv2 because thirdparty assurances are now mandatory.

• However, first-party PCF quality controls and plausibility checks areencouraged and, as noted earlier, data exchange of PCFs that do not

fully meet PFv2 requirements is also permitted. During the transition
period, there will be cases where PCF data that has only been subjected
to first-party quality and plausibility checks will be exchanged.
184

4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (6) Process cycle(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)✓ Changes to the data flows necessary for PCF calculation

within the PCF system (e.g., when the type of digital input
data has changed or when there is a qualitative change toother digital systems participating in PCF calculation)⑥ Process cycle

PFv2 summary•

The process cycle defines the validity period of the assurance
statement.

■ Short-term (2023-2025)••

The assurance statement shall be valid for one year. Accordingly,
companies shall renew the assurance annually.
The requirement for an annual renewal of assurance on the corporate
level aims to be aligned with regulatory requirements such as the EU’s
Corporate Sustainability Disclosure Directive (CSRD) and the US
Securities and Exchange Commission’s (SEC) proposed rules on
nonfinancial disclosures.

■ Medium-term (2025-2030) and long-term (2030 onwards)•

The assurance statement shall be valid for a maximum of three years
or until:‒

The underlying PCF of the representative product changes by morethan 10 percent compared to the PCF that was previously assured,
if the company chooses to assure on the product-line level.

‒

The PCF system’s underlying methodology or system build haschanged qualitatively. A qualitative change includes:✓ Relevant fixes or changes with the existing PCF system✓ Deployment of a different PCF system product (e.g., witch
to a different vendor or change in product line of same
vendor)Explanation•

The one-year validity period of the assurance statement for the shortterm has been increased to three years in the medium term and thelong term because the coverage is different.

•

Because the scope of the short-term assurance is Scope 1 and 2
emissions as a company, the assurance is expected to be updated
annually in line with EU and US non-financial reporting rules(emissions are reported annually).

•

Since a product’s cradle-to-gate PCF is covered by the assurance inthe medium and long term, annual renewal of the calculation andassurance is impractical considering the burden on the company, and
the PCF data of the product unit seems unlikely to change significantly
every year, which is why PFv2 is considered to have set an assurance
period of three years.

•

The data quality assessment (2 -2-8 (2) of this document) regards thelevel of quality for emission factors calculated within five years as“fair" (midway between “good” and “poor”). This means that even if
the PCF provided by the supplier is four to five years old, the quality
will be rated as “fair." In other words, even a PCF whose three-year
assurance has expired will receive a "fair" rating for five years.
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4-2. Verification of CO2 data from Product-based calculations

Assurance roadmap details: (7) Evidence(4) The “what” of verification: (2) Compliance with the assurance
roadmap (continued)⑦ Evidence
PFv2 Summary■ Context and purpose• The provision of standardized and relevant evidence to substantiate
emissions claims and support the assurance process is thecornerstone of any verification and assurance process.

• This section is therefore meant to guide companies’ efforts togather and organize the evidence that might be required in anassurance engagement.

• This guidance does not replace any guidance that assurers

themselves may provide during the verification process and is not a
blueprint for an assurance engagement. Rather, it is meant to help
companies prepare for an assurance engagement ahead of time,
speeding up and streamlining the assurance process.

■ Structure and dimensions• The guidance around evidence is structured along three dimensions
central to verifying Product-based emission disclosures:
1) Data: Evidence around the required data elements, sources,and quality of data used in the calculations
2) Methodology: Evidence around the calculation steps, results,
and assumptions3) Governance: Evidence around the underlying processes usedduring the calculations, including how data was stored, howquality was ensured, and how risks were mitigated▪ Each dimension contains five specific elements described in theassurance evidence pack described below, which constitute theassurance evidence pack for that dimension. Because the maturityof a company‘s Product-based emissions reporting varies, theassurance evidence pack distinguishes between minimal andoptional elements that may further clarify the assurance process.

■ Assumptions• Companies should check to what extent the assumptions areapplicable and, accordingly, to what extent this guidance may be
relevant for their context.

■ Evidence pack▪ A full version of the evidence pack, including the different
dimensions and minimum and optional requirements, is described
below.
Explanation• The Assurance Roadmap (Figure 4-2-1) shows the short-, medium-,and long-term requirements by assurance dimension, but the actual
requirements are shown only up to the process cycle (previouspage), while the section on evidence lays out an “evidence pack" sothat companies can collect and organize the evidence considerednecessary for assurance.

• Figures 4-2-5 to 4-2-7 describe the content of the PFV2 evidence

pack, together with this document's own discussion of what should
be checked and from what perspective for each element of evidence.

186

4-2. Verification of CO2 data from Product-based calculations

Illustration: Assurance evidence pack (1) Data◼

Pathfinder Framework v2 sets out the data required as evidence for assurance.
Assurance evidence pack (from Pathfinder Framework v2)
Element

Optional

What should be checked and from what perspective(This document’s approach)Description

Minimum

Data collection

In order to perform a PCF calculation, companies
are expected to identify all relevant GHG sources
and map the activity data available for each

Inventory of all GHG sources
and the relevant activity data
broken down by site

N/A

Have any important attributable processes been
overlooked?

Primary data
sourceUnderstanding which of the GHG sources havebeen calculated via primary data collection isconsidered key for the purpose of the Pathfinder
Framework

Comprehensive list of all
primary data sources used

Additional information on
how and when the data
was accessed(For the purpose of understanding the contents of the
PCF calculation, so there is no pass/fail judgment for thiselement alone.)

Secondary data
sourceCompanies downstream want to ensure that
secondary data used for the calculation comesfrom credible and globally recognized sources

Comprehensive list of all
secondary data sources used

Additional information on
how and when the data
was accessed

Are you using a Pathfinder Framework-approved
secondary data database?

Proxy data

Should primary and secondary data sources notcover the entirety of the studied PCF, proxy data
can be used to fill in the gaps as long as this is
documented transparently

List of proxy data used andrationale of application

Steps taken to ensure thatproxy data used isminimized in the future

Are there unreasonable proxy data applications?
For example, is primary and secondary data really notavailable? Is the proxy data really suitable for emissions
estimation?

Data quality

As data quality shall only be assessed for GHG
sources surpassing the defined 5% threshold,companies will need to give evidence of thisexercise to ensure all material sources arecovered in the assessment

Results of materiality
threshold assessment of PCF’s
GHG sources

An individual data quality
statement for each GHG
source surpassing themateriality threshold

Are exemption rules (cutoff rules) applied correctly?

Overall data quality
assessment statement(Since the data quality statement is also used tounderstand the quality of PCF data, no pass/fail judgment
is made for this element alone.)

Companies will also need to give
evidence of the data quality assessment
statement

Figure 4-2-5 Assurance evidence pack (1) Data
Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2187

4-2. Verification of CO2 data from Product-based calculations

Illustration: Assurance evidence pack (2) Methodology◼

Pathfinder Framework v2 sets out the evidence required for methodology in the evidence pack.
Assurance evidence pack (from Pathfinder Framework v2)
Element

Description

What should be checked and from what perspective(This document’s approach)

Minimum

Optional

Standards followed will define the Framework
requirements and thus the correctness of thesteps taken by companies to calculate the PCF

Comprehensive checklist of
standard(s) requirements followed
List of Scope boundary conditions

Companies will need to demonstrate alignment
to Scope boundary conditions prescribed by
the Framework(E.g., treatment of site waste
disposal; upstream boundary of raw
materials using recycled materials

Calculation step

It is essential for companies to be able toproduce a list of calculation steps taken toconvert activity data into GHG emissions foreach life cycle stage included in the systemboundary of the PCF

Comprehensive list of calculation steps
per life cycle stage (list of activity x
emission factor)

N/A

Are there any omissions or duplications in the calculation
steps?
(The data collection list above is useful in this regard.)

Assumptions

List of assumptions used in calculation toensure completeness of calculation

Comprehensive list of assumptions
made at each stage

N/A

Have unreasonable assumptions have been made?
(Decisions must be based on common sense.)

Allocation

Downstream companies will want tounderstand whether allocation has taken place,and if so, what approach was used

Description of allocation approach
followed

Evidence to confirm
avoided allocation

Is the allocation approach consistent with the Pathfinder
Framework (see 2.2.4)?

Results

Results will allow verification parties tounderstand whether the calculation steps
required by the standard have been completed
accurately

Comprehensive list of all intermediate
and final results

Conformance

Ensures mass balance validation

N/A

When using PCR and sector rules, is the company
compliant with those requirements?
Has the company set a boundary which runs contrary to
the Pathfinder Framework?

Is the calculation process correct?
• Check by "activity data x emission factor"• Check double accounting at the time of statement
application• Check PDS calculations• Check DQR calculations

Figure 4-2-6 Assurance evidence pack (2) Methodology
Source: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2188

4-2. Verification of CO2 data from Product-based calculations[Illustration: Assurance evidence pack (3) Governance◼

Pathfinder Framework v2 sets out the evidence required for governance in the evidence pack.
Assurance evidence pack (from Pathfinder Framework v2)
Options

What should be checked and from whatperspective(This document’s approach)Element

Description

Minimum

Data governanceIn order to ensure replicability and facilitate
knowledge transfer, companies should have inplace a data governance plan mapping thedata processes, ownership, andresponsibilities, as well as documentation on
the steps taken to consolidate and validate
different data inputs, e.g., from different sites

Comprehensive map of all processes andresponsibilities

Quality control

Internal mechanism in place to ensure quality
control takes place and that responsibilities
associated with it are clear

N/A

Comprehensive
list of controls andresponsibilities

Confirmation (No pass/fail judgment for thiselement alone)

Expertise

There is a need to ensure that the team
employed to undergo the calculation process
has sufficient expertise in the subject in orderto minimize PCF misstatements

N/A

Total years ofexpertise within team
employed to undergo
PCF

Confirmation (No pass/fail judgment for thiselement alone)

Capacity

When asked, companies should be able to list
internal and contracted team members (ifany) responsible for the product footprint
calculations

N/A

List of all responsible
individuals

Confirmation (No pass/fail judgment for thiselement alone)

Risk management

Companies need to be able to identify
potential shortcomings or pitfalls associatedwith the PCF calculation process in order to beable to address themComprehensive list of all risks andmitigation tactics

Progress on mitigation
tactics employed

Confirmation (No pass/fail judgment for thiselement alone)

N/A

Comprehensive list of all data
consolidation steps and rationale (e.g.,
data consolidation from multiple
locations)

Confirmation (No pass/fail judgment for thiselement alone)
Are there inconsistencies in any of the data
consolidation steps?

Figure 4-2-7 Assurance evidence pack (3) GovernanceSource: Created by Mizuho Research & Technologies and Zero Board from Pathfinder Framework v2

189

4-2. Verification of CO2 data from Product-based calculations

Requirements for choosing assurance providers(5) Requirements for choosing assurance providers④

PFv2 does not include specific requirements around choosing anassurance provider but does suggest some criteria that may be used
for selection.

Capacity‒ Enough staff capacity to conduct the assurance engagement‒ It is the company’s responsibility to ensure that requirements
are metRequirements for choosing assurance providers suggested by PFv2①

Expertise and experience•

General elements are listed as conditions for selecting an assurance
provider, but no specific criteria are provided.

•

Although we believe that more specific criteria could be provided,
given alignment with PFv2 and the shortage of PCF data assurance
and verification providers, we will only recommend the PFv2
selection requirements.

‒ Proven experience conducting assurance engagements andapplying assurance standards‒ Capabilities around LCA and carbon accounting, as shown by
experience, educational qualifications, and tools used②

Industry and sectoral knowledge‒ Understanding of the underlying industry that the PCF data to be
assured belongs to‒ Understanding of business operations within the sector which
the product or corporation belongs to③

Credibility‒ Proof of no conflicts of interest between the assurance provider
and reporting company‒ Proof of successful verification processes
1904-2. Verification of CO2 data from Product-based calculations

Pathfinder Framework approach to verification(6) Reporting•

In line with the GHG Product Standard, companies shall include theassurance statement in the emission disclosure.

•

In general, companies shall exchange information on the assurance
itself through the Pathfinder Network. It is the company’s
responsibility to ensure that assurance-related information for each
PCF exchanged through the Pathfinder Network is up to date andaligned with PFv2 requirements.

An assurance statement, at the minimum, shall include:

‒
‒
‒
‒
‒
‒
‒
‒
•

In the medium and long term, companies shall need to share theassurance statement as a link in the data attributes or as an
attachment to the relevant PCF being exchanged.

PFv2 notes the following in relation to assurance statements andtheir use by companies:[PFv2 assurance statement requirements]••

The assurer’s assertion
The level of assurance
The assurance provider’s name and the executing individuals
A summary of the assurance process and work performed
The relevant expertise of the assurer
Any potential conflicts of interest
The assurance standard applied, if any
A list of criteria that were evaluated to reach the assertion.

The format of reporting will depend on the applicable requirements,
particularly the coverage requirements.

[Company use of assurance statements as defined by PFv2]•

In the short term, companies shall report the assurance statement
alongside the relevant emissions disclosure.
191

4-2. Verification of CO2 data from Product-based calculations

Concept of CO2 data verification in this document (1/2)
4-2-2. Concept of CO2 data verification in this document(3) Compliance with PFv2 assurance roadmap required••

This document also requires compliance with the PFv2 assurance
roadmap (Figure 4-2-1). At the same time, PCF data that are notfully compliant with the roadmap will be allowed to be exchanged
as long as this non-compliance is disclosed.

•

Consistent with our inclusiveness orientation, this document
accepts the PFv2 position that “If a company is unable to meet theassurance and verification requirements as defined in this guidance
before exchanging the data, the company may still exchange itthrough the Pathfinder Network.”•

How the reliability of PCF data is evaluated based on the presenceor absence of third-party assurance is left to the judgment of thedownstream company exchanging the data.

•

It should be noted that the short-term requirements for "coverage"and "boundary" (third-party verification of Scope 1 and 2
emissions) in the assurance roadmap are not required in situations
where a company can obtain third-party PCF assurance bypresenting information based on the assurance evidence pack after
performing the PCF calculation.

•

Where the purpose is only PCF assurance, this document takes the
position that third-party assurance of Scope 1 and 2 emissions as
an organization is not required (although desirable) as long as thenecessary data have been compiled and third-party assurance of
the PCF can be obtained.

This section summarizes the approach of this document to thespecific requirements and guidance for PFv2 presented in thepreceding pages. Following PFv2, assurance and verification areused interchangeably in this document.

(1)What is required for verification?
•

As with PFv2, this document does not specify to the “how” of theassurance process, just the “what” of the process (i.e., therequirements and proposed outcomes).

(2) Third-party verification required•••

As with PFv2, this document requires that PCF assurance by a third
party. At the same time, data exchange is permitted for PCFs thathave not been verified by a third party, subject to disclosure that
information related to data quality has not been verified.
This is due to this document’s acceptance, consistent with our
inclusiveness orientation, of the PFv2 position that “If a company isunable to meet the assurance and verification requirements as
defined in this guidance before exchanging the data, the company
may still exchange it through the Pathfinder Network.”
How the reliability of PCF data is evaluated based on the presenceor absence of third-party assurance is left to the judgment of thedownstream company that sends or receives the data.

192

4-2. Verification of CO2 data from Product-based calculations

Concept of CO2 data verification in this document (2/2)
4-2-2. Concept of CO2 data verification in this document(continued)(4) Preparation of information in assurance evidence packrecommended•

The assurance evidence pack presented by PFv2 (Figures 4-2–5 to
4-2-7) is an effective list of information that companies should
prepare for assurance and verification.

•

This document also recommends the organization of information
based on assurance evidence packs.

(5) Compliance with PFv2 requirements for choosing assurance
providers recommended•

This document recommends following the PFv2 proposal on
requirements for choosing assurance providers (4-2-1 (5)).

(6) Compliance with PFv2 assurance statement reporting format
required•This document requires compliance with the assurance statement
reporting format presented by PFv2 (4-2-1 (6)).

193

4. Assurance and verification of CO2 data

4-3. Assurance and verification of CO2 data from
Organization-based calculations

4-3. Verification of CO2 data from Organization-based calculations

Verification of CO2 data from Organization-based calculations
4-3. Verification of CO2 data from Organization-based
calculations••



Although this document recognizes Organization-based calculation
data for the purpose of inclusiveness, CO2 data quality is as
important as in Product-based calculations.
There are differences in calculation methods between organizationbased and Product-based calculations, and these differences arealso relevant in relation to verification.
‒

In Organization-based calculations, CO2 data is calculated(allocated) and shared based on Scope 1, 2, and 3 emissions.
Scope 1, 2, and 3 emissions are important today as nonfinancial disclosure elements for companies and require
third-party verification. For this reason, many companies
have already verified Scope 1, 2, and 3 emissions.

‒

Scope 1, 2, and 3 emissions verification is regarded as acorporate non-financial disclosure measure, and therefore isnot subject to the verification required by this document. The
verification required by this document is the appropriatenessof the allocation for CO2 data-sharing.

‒

However, it is also important to understand Scope 1, 2 and 3
emissions, which are a prerequisite for Organization-based
calculations, in order to verify the appropriateness of theallocation.

② Plausibility of process subdivision and allocation
4-3-1. Understanding of Scope 1, 2 and 3 emissions•

Scope 1, 2 and 3 emissions are not subject to verification in theCO2 data-sharing presented in this document, as they areintended to deepen understanding as premises and to lead to theformulation of reduction measures and supplier collaboration.

•

Specific elements for understanding Scope 1, 2, and 3 emissions
include reporting boundaries, calculation methods, emissions
factors, and primary data utilization ratios.

Based on the above, we propose the following requirements forCO2 data verification for Organization-based calculations:① Understanding of Scope 1, 2 and 3 emissions as a premise1954-3. Verification of CO2 data from Organization-based calculations

Verification of CO2 data from Organization-based calculations: Plausibility of data subdivision andallocation
4-3-2. Verifying allocation plausibility•

Points (1) to (5) below are required to verify allocation plausibility.

(1) Plausibility of process subdivision•“2-3-2. Organizational-level calculation method” recommends
process subdivision as a means of avoiding or minimizing allocation.

•

To avoid or minimize allocation, we envisage an approach that islimited to transaction-related scope by customer, with theplausibility of this approach to be confirmed.

(2) Does it contain a target category?
•

The GHG Protocol Product Standard stipulates that nonattributable processes (indirect activities) fall outside the boundary(unless deemed to be product-related).

•

In line with this concept, we suggest that in the Organizationbased calculation presented in this document, emissions fromindirect activities and other activities in the Scope 3 category thathave low relevance to products destined for a customer should be
excluded from the range of emissions used as the denominator forallocation to that customer.

•

product manufacturing and emissions, it is allocated using aphysical indicator; otherwise, it is allocated using an economic orother indicator.
•

Check whether allocation indicators have been determined inaccordance with the concepts presented in “2-3-2. Organizationallevel calculation method.”(4) Consistency of emissions before and after allocation•

In the case of allocation, emissions before and after allocationmust be consistent.

•

Check whether the total value of allocation results matches thetotal amount before allocation.

(5) Appropriateness of certificate allocation•

Check whether the certificate allocation has been done properly as
shown in 2-3-2.

•

Check for double counting.

Check whether these activities are excluded for valid reasons
based on relevance to customer transactions.

(3) Allocation indicators•

If a physical indicator reflects a causal relationship between
196

Appendix

Appendix

Appendix 1. Glossary(1) Terms appearing in Japanese translation, katakana notation or mixed Japanese notation
Terminology

Definition

Green x Digital Consortium

A consortium established by JEITA in October 2021 to promote activities for the creation and implementation of new digital solutions that lead to thepromotion of corporate carbon neutrality and changes in industry and society

Visualization WG

A Green x Digital Consortium working group (WG) considering mechanisms for visualizing CO2 emissions throughout the supply chain

Methodology SWG

A subworking group of the Visualization WG considering CO2 data calculation and sharing methods, etc., for the CO2 Visualization Framework

Data Format and Exchange SWG

A subworking group of the Visualization WG considering data exchange formats and exchange methods using digital technologies

Logistics SWG

A subworking group of the Visualization WG considering methods for calculating CO2 emissions from transport and logistics

CO2 Visualization Framework

Framework document for CO2 visualization released by the Green x Digital Consoritum that presents calculation and data quality disclosure methods forCO2 data exchanged throughout the supply chain using digital technology

CO2 data

In this document, in principle, cradle-to-gate greenhouse gas emissions data. Not limited to CO2, but refers to the CO2 equivalent of GHG as defined by
the IPCC.

Life cycle

Consecutive and interlinked stages of a product system, from raw material acquisition or generation of natural resources to end-of-life

Life Cycle Assessment (LCA)

Compilation and evaluation of the inputs, outputs, and potential environmental impacts of a product throughout its entire life cycle.

Life cycle emissions

The sum of GHG emissions resulting from all stages of the life cycle of a productDeclared unit

A unit used to quantify and share GHG emissions. It is basically used in intermediate products because it is based on a unit that is easy to grasp
objectively, such as mass. An additional concept is functional unit, which is the unit based on the function and performance of the studied productProduct quantity

The quantity of declared units in the product. For example, in the case of "parts with a mass of 5 kg per piece," the declared unit is indicated as "kg" andthe product quantity is indicated as "5."Inventory

A list of sources and sinks from which a particular substance has been released or removed over a period of time

Activity data

Quantitative measurement of activities related to GHG emissions or removals. Fuel and power consumption, component weight and procurement costs,
etc.

Emission factor

GHG emissions per unit of activity. Although emission intensity has the same meaning, this document generally uses the term “emission factor.”

Global Warming Potential (GWP)

Factor for converting non-CO2 greenhouse gases into CO2 equivalent greenhouse effect198

Appendix

Appendix 1. Glossary(1) Terms appearing in Japanese translation, katakana notation or mixed Japanese notation
Terminology

Definition

Unit process

The smallest unit in which input/output data is quantified

Attributable LCA approach

An LCA method that combines the environmental impacts of all attributable processes in the current life cycle and attributes them to the target productAttributable process

Service, material, and energy flows that become the product, make the product, and carry the product through its life cycle

Non-attributable process

Processes that do not qualify as attributable processes and should be excluded from the calculation. Not used in the Pathfinder Framework, but
introduced here to define a concept.

Boundary

Boundaries for calculating and reporting greenhouse gas emissions. In principle, this document is bounded by cradle-to-gate attributable processes.

Exemption rules (cutoff)

Provisions for excluding certain processes from calculations within the framework of the attributable process

Allocation

The process of partitioning GHG emissions from a single facility or other systems among its various outputs, in particular products

Process subdivision

A method of avoiding allocation by dividing a unit process into two or more finer processes and understanding the inputs and outputs for each process

Primary dataSite- or supplier-specific data related to specific activities within a company's value chain

Secondary data

Data not derived from specific activities within a company's value chain but rather from databases based on information sources such as averages andscientific reports

Proxy data

Data used to bridge data gaps in primary or secondary data

Primary data emission factors

Emission factors specific to each company provided by supplier companies, not industry averages taken from databases, etc.

Primary data share (PDS)

Percentage of PCF emissions that were calculated using primary activity and emissions data. The PDS is not necessarily 100%.

Data Quality Ratings (DQR)

A system to evaluate the quality of CO2 data by five indicators: technological representativeness, temporal representativeness, geographicalrepresentativeness, completeness, and reliability

199

Appendix

Appendix-1. Glossary(1) Terms appearing in Japanese translation, katakana notation or mixed Japanese notation
Terminology

Definition

Recycled content method

One means of reflecting recycling effects, premised on open-loop recycling, whereby the recycled materials are used in different products. The
recycling effect and environmental burden are divided into pre- and post-recycling processes. This document stipulates that the recycled content
method should be used to reflect the recycling effect.

Closed-loop approximation
methodOne means of reflecting recycling effects, premised on closed-loop recycling, whereby the materials are used again for the same product. The
recycling effect and environmental burden are borne by the recycling processing side, with the whole product presumed to comprise virginmaterials on the raw material procurement side.

SHK scheme under the Act
on Promotion of Global
Warming Countermeasures

System for GHG emissions accounting, reporting and disclosure whereby companies with substantial GHG emissions (“specified emitters”) haveto calculate their GHG emissions and report them to the government

Emission factors by powercompany

Emission factors by power company and general transmission and distribution utility for reporting CO2 emissions associated with the use of
power supplied by another party. Two types of emission factors, the basic emission factor and the adjusted emission factor, are disclosed. An
SHK scheme concept.

Energy attribute certificate

A certificate enabling renewable electricity attribute information and value to be handled separately from actual power

Carbon credit

Measurement, Reporting, and Verification (MRV) is performed in relation to GHG reduction or removal projects to verify the difference between
the envisaged amountss of emissions and removals against the actual amounts, which can then be traded among countries and companies, etc.,
as carbon credits

OffsetApplication of carbon credits to offset GHG emissions from the reporting entity's entire organization or per product

Mass balance approach

In general, when a mixture of sustainable and non-sustainable raw materials (e.g., biomass and fossil-origin raw materials) is produced, amethod of assigning sustainable characteristics to some products by weight. This document reserves the use of the mass balance approach forCO2 data calculation.

Biogenic carbon

Carbon derived from organisms and biological processes, as opposed to carbon from fossil fuel sources

Biogenic emissions

Amount of biogenic GHG emitted into the atmosphere, comprising land management (agriculture, etc.), land use change (deforestation, etc.),
and others (biogenic waste disposal, etc.)

Biogenic removal

Amount of biogenic GHG removed from the atmosphere, comprising the mass of biogenic carbon contained in the product of the declared unit
converted to kg-CO2e

Direct land use change(dLUC) emissions

A recent (i.e., previous 20 years) carbon stock loss due to land conversion directly on the area of land under consideration

Indirect land use change(iLUC) emissions

A recent (i.e., previous 20 years) carbon stock loss due to land conversion on land not owned or controlled by the company or in its supply chain,induced by change in demand for products produced or sourced by the company

Land management
emissions

GHG emissions from sources that occur on land from land management activities and during production of food, feed, fiber, or other biogenic
product(s)200Appendix

Appendix 1. Glossary(2) English terms
Terminology

Definition

CO2e

CO2 equivalent. Each type of greenhouse gas has a different magnitude of impact on global warming, and this is a common measure to uniformly
represent them

CFP

Carbon Footprint of Products. Total amount of greenhouse gases generated over the life cycle of the product. Also called Product Carbon Footprint (PCF).
ISO 14067 uses the CFP notation, and the Pathfinder Framework uses the PCF notation.

Cradle-to-gate

One type of boundary setting in the product lifecycle, stating with raw material extraction and other processes at the first stage of the product lifecycle

Gate-to-Gate

One type of boundary setting in the product lifecycle

GHGs

Greenhouse gases, including include CO2, CH4, N2O, HFCs, PFCs, SF6, and NF3

EEIO

Environmentally-Extended Input Output. An economic analysis model of inputs and outputs for each industry is applied to the evaluation of environmental
impact, such as emission factor databasse based on input-output tables

PACT

Partnership for Carbon Transparency. An initiative established by WBCSD to enable cross-sectoral exchange of primary data on GHG emissions for Scope
3 transparency

Pathfinder Framework

Emission data calculation and exchange methodology issued by PACT

Pathfinder Network

An open network for the confidential and secure exchange of emissions data. A PACT initiative.

PCF

Product Carbon Footprint. Total amount of greenhouse gases generated over the life cycle of the product. Also called Carbon Footprint of Products (CFP).
ISO 14067 uses the CFP notation, and the Pathfinder Framework uses the PCF notation. Although sometimes used as an abbreviation for Partial Carbon
Footprint, PCF in this document refers only to Product Carbon Footprint.

PCR

Product Category Rule. Criteria for calculating PCF for the same commodity type.

PEFCR

Product Environmental Footprint Category Rules, rules on the environmental footprint (results of life cycle assessment covering not only GHG emissions
but also various environmental impacts) by product category developed as part of the EU’s environmental footprint policy

SuMPO EPD

The Environmental Product Declaration program, which is operated by Japan's Sustainable Management Promotion Organization (SuMPO) and is the only
program in Japan compliant with ISO14025. Called EcoLeaf prior to May 14, 2024.

201

Appendix

Appendix 2. Alignment with METI/MoE Carbon Footprint Guidelines•

Clarification of necessary points of adjustment (recalculation, etc.) when a business that has calculated a CFP using the Carbon Footprint
Guidelines (CFP Guidelines, released in May 2023) seeks to align with this document
Alignment/
No. adjustment
required

1 Alignment

Alignment/
partial2adjustment
required

Adjustment
3
required

Issue

CFP
Guidelines

Allocation
hierarchy① DataCollection V.
Calculation
method forallocation(1/3)

Declaredandfunctionalunits①
Calculation
Unit (1/2)(a)
Examination
Cutoff rulesof cutoffcriteriaPage

CO2 Visualization
Framework

Page

Notable differences *Necessary adjustments

The allocation hierarachy differs.
The Product-based calculation inf the CO2 Visualization Framework Edition 2
uses the Pathfinder Framework decision tree and prioritizes economic allocation.
For Organization-based calculation, physical indicators are prioritized (but only
as recommended) in accordance with Chapter 8: Allocation, of the GHG Protocol
Scope 3 Standard.
The CFP Guidelines prioritize physical indicators.

If the allocation is based on physicalindicators, based on CFP Guidelines, it isnecessary to consider whether anallocation based on economic value isfeasible.

The CO2 Visualization Framework Edition 2 requires that the final PCF inventory
results be disclosed as kg-CO2e per declared unit. Most of the PCF calculations
are for intermediate products, which must use declared rather than functional
77 units.
In the CFP Guidelines, the unit of calculation for CFP must be defined infunctional units. However, if it is an intermediate product or difficult to define ina functional unit, it may be implemented in a declared unit.

If the calculation is performed on afunctional basis based on the CFP
Guidelines, it is necessary to performthe calculation on a declared unit basis,
where the function is decomposed andrelated to the quantity.

The CO2 Visualization Famework Edition 2 refers to Pathfinder Framework v2
and provides quantitative provisions for cutoff.
88
The CFP Guidelines state that "It is recommended that cutoff be avoided asmuch as possible," and there is no quantitative provision.

Based on the CFP guidelines, which
prefer not to perform a cutoff, there is
no problem if there is no cutoff.
According to the CO2 visualization
framework, if a cutoff is to be
performed, detailed descriptions inaccordance with the following cutoff
contents are necessary:・Ensure that the cutoff target is anindividual attributable process that isless than 1% of the total amount ofcradle-to-gate PCF. If 1% or higher, theprocess must be added for PCF.
・The sum of the excluded processes
shall be less than 5% of the total
amount of cradle-to-gate PCF. If 5% orhigher, the process must be added forPCF.

2-2-4. PCF calculation steps
91(4) Step 3 Allocation(Product)53
137
2-3-2. Calculation(Organizati
methodologyon)(3) Allocation28

2-2-3. Scope and boundary(4) Display units

2-2-4. PCF calculation steps
34 (3) Exemption rules (cutoff
rules)* The above represents the Green x Digital Consortium's Methodology Sub-Working Group's analysis and interpretation of the is CFP Guidelines.

202

Appendix

Appendix 2. Alignment with METI/MoE Carbon Footprint Guidelines
No.

Alignment/
adjustment
required

Issue

CFP
Guidelines

4 Alignment

Disclosureofinformationonrenewableenergycertificates①
Renewableenergycertificates(1/5)

5 (Pending)Applicationof the massbalanceapproach

P37 (2)MassbalancemethodP77 Carbon
offset (1/2)

Page

CO2 Visualization
Framework

Page

Notable differences *Necessary adjustments

CO2 Visualization Framework Edition 2 recommends disclosure of certificate
usage and certificate type.
58・59

3-2. Data disclosure
elements

166 The CFP Guidelines require specification of the type of renewable energy
certificate, etc., in the calculation rules for each product (J-Credits, Non-fossil
Certificates, etc.) Not only J-Credit (renewable power) but also J-Credit(renewable heat) can be used.

ーAdoption of CO2 Visualization Framework Edition 2 is pending in line with
Pathfinder Framework v2.
2-2-7. Market approach
37・77 (3) Concept of the massbalance approach

114 The CFP Guidelines state that "If the mass balance method is used in CFP
calculation, CO2 emissions must be appropriately assigned to products, taking
into account the characteristics of the manufacturing process and referring to
the mass balance model specified in ISO 22095."(Pending)

In CO2 Visualization Framework Edition 2, biogenic emissions and removals arelisted as elements that need to be calculated after 2025.
6 Alignment

7 (Pending)

Biogenic
carbonLand use③ Carbonfrombiomass(1/2)④ Landuse

38
2-2-5. Additional guidanceon PCF calculation(1) Biogenic emissions andremovals

40

The CFP Guidelines state that "Biomass-derived GHG emissions and removals
should be included in the CFP, and emissions and removals should be describedso that they can be distinguished and understood. In addition, when providing
cradle-to-gate CFPs to others, if the carbon content derived from biomass iscalculated, the information must be provided separately as a figure different
93-95, 167 from the CFP."ー

CO2 Visualization Framework Edition 2 lists land management emissions andremovals as elements that need to be calculated after 2025. However, as statedon page 167, even if it is difficult to comply with the mandatory disclosure items, The calculation should be made on an
it is permissible to exchange data by explicitly stating so.
optional basis as an element that needs
to be calculated after 2025.
The CFP Guidelines do not describe land use separately. The CFP survey reportis included separately.

* The above represents the Green x Digital Consortium's Methodology Sub-Working Group's analysis and interpretation of the is CFP Guidelines.

203

Appendix

Appendix 2. Alignment with METI/MoE Carbon Footprint Guidelines
Alignment/
No. adjustment
required

8 (Pending)

9

Adjustment
required

Adjustment
10
required

Issue

CFP Guidelines

Land usechange⑤ Land usechangeInternal
verification① Necessity ofverification andsubject (internalverification/third-partyverification)

Temporal
representativeness indata quality
assessment③ Datacollection period(temporal
boundary)Pg

CO2 Visualization Framework

2-2-5. Additional guidance on
PCF calculation
41(1) Biogenic emissions andremovals

67

4-2. Verification of Productbased CO2 data

Pg

Notable differences

In CO2 Visualization Framework Edition 2, land-use change is added as an
93element that needs to be calculated after 2025.
95,
167
The CFP Guidelines do not describe land-use change separately.

The calculation should be made on an
optional basis as an element that needs
to be calculated after 2025.

CO2 Visualization Framework Edition 2 adopts the concept introduced in PFv2 of
requiring third-party verification but allowing data exchange without that
It is desirable to obtain assurances
171 verification as long as this is clearly disclosed.
based on third-party verification.
The CFP Guidelines state that either internal or third-party verification should be
performed.

TCO2 Visualization Framework Edition 2 evaluates data collection for the same
year as the reporting year.
2-2-8. Data reliability
33(2) Data quality assessment

Necessary adjustments

120 The CFP Guidelines recommend the collection of representative CFPs in
consideration of changes in emissions due to seasonal fluctuations. Where there
are short-term or long-term fluctuations, the average emissions of the process,taking both into account, are desirable.

For temporal representativeness, it isdesirable to report data collected in thesame year as the reporting year (good)or less than 5 years (fair), taking into
account short- and long-term variations.

* The above represents the Green x Digital Consortium's Methodology Sub-Working Group's analysis and interpretation of the is CFP Guidelines.

204

Appendix

Appendix 3. Contributions to the writing of this document (1) (Edition 1)•

As indicated in 1-1-2, this document was prepared with the cooperation of various members of the Methodology SWG.

•

All SWG members (Figure 1-1-3) contributed to the preparation of this document through discussions at WG meetings.

•

The table below also shows the companies that contributed to the writing of each section and additional work such as individual discussions
and reviews.
Overall writing

Mizuho Research & Technologies

Discussion and review of full document

NTT Data Group, Brother Industries

Cooperation in discussion of the draft

Deloitte Tohmatsu Consulting, NEC

Cooperation in answering questionnaires

Cooperation in
the writing ofindividual parts

Cooperation in
investigation ofexisting
standards

Kajima, Canon, Zero board, Deloitte Tohmatsu Consulting, Toshiba,
Nitto Denko, NEC, Nomura Research Institute, Panasonic,
Hitachi, Brother Industries, Mitsubishi Electric2-2. Product-based calculation method

Brother Industries

2-3 Organization-based calculation method

Zeroboard

3-2. Data disclosure elements

NTT DATA

4-2. Verification of Product-based CO2 data

Asuene4-4. Verification of organization-based CO2 data

Zeroboard

GHG Protocol Product Standard

Microsoft Japan

PEFCR

Hitachi, Ltd.

SuMPO PCR

Brother Industries

EPD International PCR

Mizuho Research & Technologies

ISO 14067:2018

Mizuho Research & Technologies

PACT Pathfinder Framework v1

Mizuho Research & Technologies

CDP Supply Chain Program

NTT DATA

205

Appendix

Appendix 3. Contributions to the writing of this document (2) (Edition 2)•

Similarly, the update to Edition 2 was prepared with the cooperation of various members of the Methodology SWG (Figure 1-1-3), and all SWG
members contributed to the preparation of this document through discussions at WG meetings.

•

The companies that contributed to the writing of each section are shown in the table below.

writer
1. Introduction•

Mizuho Research & Technologies (Overall)•Mizuho Research & Technologies (Overall)

•
•
•
•

Brother Industries (Handling of indirect activities)
Asuene (Calculation of end-of-life and process-derived emissions and upstream
complementation of SHK factors)
Sustech (Allocation guidance, DQR commentary)
Mizuho Research and Technologies (Other)•Mizuho Research & Technologies (Overall)

3. CO2 data disclosure method••

NTT DATA (Correspondence with digital specifications)Mizuho Research & Technologies (Consistency with Chapters 1 and 2)

4. Verification••

Zeroboard (Analysis of verification methods in Pathfinder Framework v2)
Mizuho Research & Technologies (Adoption or rejection in CO2 Visualization
Framework)

Appendix••

NTT DATA (CFP Guideline analysis, glossary)
Mizuho Research & Technologies (Consistency with Chapters 1 to 3)

2-1. Two calculation methods

2. CO2 data calculation
method2-2. Product-based CO2
calculation method

2-3. Organization-based CO2
calculation method

206

This document is copyrighted by the Green x Digital Consortium.
This document is based on the Pathfinder Framework of the Partnership for Carbon Transparency (PACT) sponsored by the World
Business Council for Sustainable Development (WBCSD) and the WBCSD GHG Protocol.
It was prepared based on the information at the time of publication of this document, and its accuracy and reliability are not guaranteed.
The Green x Digital Consortium is not responsible for any problems, losses, damages or claims from third parties arising from the use ofthis material.

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