Demystifying the EU Product Environmental Footprint (PEF): What You Need to Know!

Yet another impact quantification methodology?!

Nope, this is more than that.

The Product Environmental Footprint (PEF) is a methodology developed by the European Commission to measure the environmental impact of products throughout their life cycle. The PEF is part of the EU’s broader effort to tackle greenwashing (misleading environmental claims) alongside EU Green Claims Directive and Corporate Sustainability Reporting Directive (CSRD) and ensure that products sold in the EU market meet stringent environmental standards. It’s designed to standardize how companies assess and communicate their environmental performance, making it easier for businesses, regulators, and consumers to compare sustainability claims.

Don’t worry – it builds on, rather than replaces, existing standards, like EN 15804, ISO 14000, and ISO 14044. ?[European Commission, 2023]

This article talks about what the PEF is, who needs to pay attention to it, why, and the timeline for its implementation. Read on!

Key Features of the PEF

The PEF methodology is designed to provide a clear, standardized way to assess product sustainability. Some of its key features include:

• LCA Approach + Multi-Criteria Evaluation – Covers the full environmental impact of a product from raw materials to disposal. Measures a range of 16 environmental impacts, including carbon footprint, water usage, land use, and resource depletion.
• Harmonized Calculation Rules – Product Environmental Footprint Category Rules (PEFCRs) are industry specific rules and ensure fair comparisons across industries. While industry-specific PEFCRs are still under development, PEF also offers a larger framework for other industries.
• Highlighting Meaningful Impacts?– The 16 impact categories represent not just direct impacts, but also the severity. For example, water use and land use highlight the water scarcity or soil degradation in a given area respectively.
• Normalised and Weighted Scores?– Normalisation and weighting factors help businesses prioritize which impact categories are most relevant to them by benchmarking against per capita environmental budgets.
• Actionable Insights – For investors, PEF offers a standardized, transparent way to assess risks and opportunities of prospective investments. While for producers, PEF offers the chance to deep dive into environmental hotspots that can inform a company's sustainability strategy.

"The 16 impact categories represent not just direct impacts, but also the severity. For example, water use and land use highlight the water scarcity or soil degradation in a given area respectively."

Who Needs to Pay Attention to the PEF?

In short — anyone who invests in, produces, sells, or sources products in the EU. The PEF is particularly relevant for:

• Manufacturers: Especially those in high-impact industries such as food, textiles, construction materials, and consumer goods. Companies need to ensure their supply chains comply with sustainability standards.
• Strategic Roles: PEF helps to identify environmental hotspots in your supply chain, as well as what types of impacts may be the biggest risk to your business.
• Sustainability Teams and Analysts: If you track and report environmental performance, PEF offers a standardized, holistic way of looking at a variety of impact factors and identifying the best way to allocate resources to improve impacts.
• Designers and Engineers: PEF process hotspot identification is valuable to improving product life cycle design, and process designs – the earlier, the better!
• Investors: Both impact investors and standard investors will need to be watchful that their investments are compliant with reporting and environmental regulations, as well as laws and incentives coming down the pipeline. PEF helps to look at multiple impacts and compare them easily.

If you’re part of a company that operates in the EU — or even just sells there — the PEF is something you need to get familiar with. Even businesses outside the EU but exporting to European markets should take the PEF seriously, as non-compliance could restrict market access.

Why Should You Care?

Although the PEF isn't mandatory yet, at ClimatePoint we highly recommend our clients to go for a PEF rather than an LCA for the following reasons:

1. Simplified Results – The results of a PEF due to the normalisation and weighting factors, helps make the 16 impact factors far more comparable and easily understandable for lay persons.
2. Greater Credibility and Risk Management – Consumers and investors are increasingly demanding transparency, and skepticism about greenwashing is rising. Companies using PEF can differentiate themselves with credible, standardised sustainability claims. With hightened scrutiny due to the EU Green Claims Directive and CSRD, PEF helps mitigate the risk of legal consequences and reputational damage as well.
3. Product Improvement??– ?If you are a new impact venture or an established manufacturer, improving the sustainability of your product is easier with the holistic perspective and hotspot analysis offered by a PEF, above and beyond the LCA.

" If LCA is a type of accounting, PEF is the set of guidelines that ensure your numbers are calculated the same way everyone else’s are - so that you aren’t greenwashing or underselling your value."

When Will The PEF Be Enforced?

There’s no specific enforcement deadline for PEF - That doesn’t mean you should just forget about it! It’s an LCA methodology to enable transparency and consistency for easy comparison between products – so it’s a supporting aspect of current and upcoming policies.

If LCA is a type of accounting, PEF is the set of guidelines that ensure your numbers are calculated the same way everyone else’s are - so that you aren’t greenwashing or underselling your value. This ensures verifiable results that you can use for supported product claims under the EU Green Claims Directive, and that your LCAs are up to the latest standards required for upcoming CSRD requirements.

Right now, PEF is not yet mandatory across all sectors, but the EU is steadily working toward making it an integral part of environmental regulations. In the coming years, we expect PEF-based reporting to become a key metric under the EU Green Deal, CSRD, and other environmental policies. Companies should start preparing now rather than scrambling when regulations kick in.

Experts at ClimatePoint Say:

Shamita Chaudhary, the Head of Methodology says, "At ClimatePoint, we’ve worked with 100+ startups, conducting Product Carbon Footprints, Life Cycle Assements, and more recently, also EU recommended Product Environmental Footprints. What we find is that the PEF helps our clients understand their impact better. While they might be confused about what moles of Nitrogen in Eutrophication might mean for their product, or what moles of H+ ions might mean in terms of the Acidification potential, the PEF methodology normalises and weights these impact categories into comparable units. So suddenly, CEOs can now answer what are the key impact factors for their product, tailoring their sustainability strategies around those effects, going beyond carbon, to improve their environmental impact holistically."

Moreover, we see our clients walking away with:

• Credible Impact Theses
• Stronger Investment Stories

• Impact Driven Product Strategies

and so much more!

What Should You Do Next?

The PEF is becoming a key tool for sustainability measurement and compliance?in the EU, and businesses that act now will have robust stories to share with investors, be empowered to offer more sustainable products & services, and be better positioned for upcoming regulations.

?? Get a deep understanding of your impact through PEF! ?

?? Book a meeting with us to discuss how PEF applies to your business and how ClimatePoint can help you navigate EU sustainability regulations.

The world of sustainability reporting is evolving fast—let’s make sure you’re ready.

By Megan Geldermann

Megan is a sustainability analyst for ClimatePoint, with double Master’s degrees in Circular Economy and Industrial Ecology, and a background in chemical engineering and FMCG. When not helping companies to evaluate their sustainability progress, she enjoys a variety of partner social dance styles, baking, and teaching herself a variety of new skills.