Step 2: Assess the Environmental Footprint

Through Life Cycle Assessment (LCA) and Environmental Footprint Tool (EFT) using supply chain data 

To understand hotspots, IDH believes that Life Cycle Analysis is a good tool to show where the hotspots in a particular supply chain are. 

The new EU CSRD (Corporate Sustainable Reporting Directive) legislation is incorporating Life cycle analysis (LCA) principles to assess the environmental impact of a product. As such, in order for companies to comply with CSRD regulations, a holistic assessment of product footprint will be a necessity in identifying and eventually addressing hotspots in a products value chain. 

Conducting such an assessment include below important steps:

  • Start to measure the product environmental footprint that includes at least two planetary boundaries 
  • Analyse LCA’s and prioritize hotspots 
  • Create baselines 
  • Monitor progress on performance 
  • Farmers are incentivised to collect data 

For instance, the IDH Aquaculture Working Group has developed an Environmental Footprint Tool (EFT), for companies to better measure and reduce the environmental footprint of aquaculture with a consistent methodology, including the level of carbon, fresh water use, nitrogen and phosphorus etc. The underlying methodologies and standards of the EFT include ISO 14040/ 14044, Product Environmental Category Rules (PEFCR), Draft PEFCD for Marine Fish etc..  

The EFT helps companies to streamline the collection and analysis of environmental data from producers and their value chain, and demonstrates which processes contribute the most to the footprint (the hotspots), and how this footprint might change over time. This also helps create baseline and target for companies to expedite and scale up their climate actions.