LCA vs. Carbon Footprint: Which is right for your business goal?

Navigating the world of sustainability assessments can feel complex. You know measuring your environmental impact is crucial, but which method should you use? Two common terms often cause confusion: Life Cycle Assessment (LCA) and Organisational Carbon Footprint (OCF). While both relate to environmental impact, they serve different purposes and answer different questions.

Understanding the distinction is key to choosing the right approach, ensuring your efforts align with your specific business objectives, whether that's comprehensive corporate reporting, product innovation, or meeting regulatory requirements. This article demystifies LCA and Organisational Carbon Footprint, helping you select the most effective tool for your sustainability journey, building upon the foundational understanding of carbon footprint accounting.

What is an Organisational Carbon Footprint (OCF)?

An Organizational Carbon Footprint (OCF) measures the total greenhouse gas (GHG) emissions caused directly and indirectly by an entire organization's activities over a specific period, typically one year. Think of it as the core indicator of the company's overall climate impact.

• Focus: Measures GHG emissions, primarily expressed in tonnes of carbon dioxide equivalent (CO2e).
  
  
• Scope: Covers the whole organization, categorized into:

• Scope 1: Direct emissions from owned or controlled sources (e.g., company vehicles, on-site fuel combustion).
• Scope 2: Indirect emissions from purchased electricity, steam, heating, or cooling.
• Scope 3: All other indirect emissions occurring in the value chain (e.g., purchased goods, business travel, waste disposal, use of sold products). You can learn more about these in our guide: Scope 1, 2 and 3 explained - Scope 3 is more important than you think!.
  
  

• Standard: Primarily guided by the GHG Protocol Corporate Accounting and Reporting Standard, the most widely used international framework.
• Primary Goal: To understand and report the overall climate impact of the company, identify major emission sources (hotspots) across operations and the value chain, set reduction targets, and communicate performance to stakeholders (investors, customers, employees).

“Calculating your OCF is often the first step businesses take towards understanding and managing their climate impact. Our tool,  Hedgehog Carbon platform, can streamline this process for SMEs.” - Saro Campisano, Co-founder Hedgehog

Assess, report, and reduce your business carbon footprint with the Hedgehog Carbon platform. Check out the platform yourself and start a free account here. 

‍What is a Life Cycle Assessment (LCA)?

A Life Cycle Assessment (LCA) is a more comprehensive Environmental Impact Assessment technique focused on a specific product or service. It evaluates the potential environmental impacts associated with all stages of a product's life, from raw material extraction ("cradle") through manufacturing, distribution, use, and end-of-life disposal or recycling ("grave" or "cradle").

• Focus: Assesses a wide range of environmental impacts, not just green house gas emissions. This can include resource depletion, water usage (water footprint), eutrophication, acidification, land use, toxicity, and more, in addition to the Carbon Footprint (PCF) of a product or service.
  
  
• Scope: Follows a product or service through its entire lifecycle, from raw material extraction to waste. The specific boundaries (e.g., cradle-to-gate, cradle-to-grave) are defined based on the study's goal.
  
  
• Standard: Guided by the ISO 14040 and ISO 14044 standards, which outline the principles, framework, requirements, and guidelines for conducting LCAs.
  
  
• Primary Goal: To understand the full environmental profile of a product, identify impact hotspots within its lifecycle (e.g., specific materials, manufacturing processes, transport), compare the environmental performance of different products, support ecodesign and product development (learn more about Ecodesign principles for sustainable products), and provide data for environmental labels or declarations (like EPDs).
  

LCAs offer deep insights into product-specific impacts. If you're new to this, our LCA for SMEs: A Practical Introduction can help, or explore our LCA consulting services.

Key differences: choosing the right lens for your goal

While related, OCF and LCA differ significantly in their scope, the metrics they track, and their typical applications.

Scope: Organization vs. Product/Service

• OCF: Looks broadly across the entire company's operations and value chain activities for a set period (usually a year).
• LCA: Looks deeply into the specific lifecycle stages of a single product or service, from beginning to end.

Metrics: CO2e vs. Multiple Environmental Impacts

• OCF: Is limited to a single metric Greenhouse Gas Emissions (CO2e) to assess climate impact. 
• LCA: Provides a more holistic perspective on environmental impact beyond just greenhouse gas emissions. It typically evaluates multiple environmental impact categories using different indicators. An LCA includes a Carbon Footprint but goes further.
  

Primary use cases: reporting vs. product improvement

OCF: Ideal for:

• Corporate Sustainability Reporting: Meeting requirements like the CSRD (see The link between carbon accounting & CSRD compliance), its voluntary counterpart vor SME, the VSME (see VSME - Everything you need to know) or B Corp certification (check out The Role of Carbon Accounting in Achieving B Corp Certification).
• Stakeholder communication: Reporting overall climate performance to investors, customers, and employees.
• Setting company-wide targets: Establishing baseline emissions for reduction goals (e.g., Science-Based Targets).
• Identifying major emission sources: Pinpointing hotspots across Scopes 1, 2, and 3 at the organizational level.
  
  

LCA: Ideal for:

• Product Development & Ecodesign: Identifying lifecycle stages with the highest impact to inform design changes.
• Product comparison: Evaluating the environmental performance of different product options or materials.
• Environmental Product Declarations (EPDs): Providing standardized environmental data for products. See our EPD Consulting service.
• Marketing & green claims: Substantiating environmental claims about specific products (use with caution to avoid greenwashing).
• Supply chain hotspot analysis: Understanding the impact drivers within a specific product's value chain.
  

How Carbon Footprint  and LCA work together

OCF and a LCA are not mutually exclusive; they are often complementary tools. Data from product LCAs can be incredibly valuable for improving the accuracy of a OCF, particularly for Scope 3 emissions.

For instance, the emissions associated with Category 1: Purchased Goods and Services in your OCF can be calculated much more accurately if you have LCA data for the key products or materials you buy, rather than relying solely on spend-based estimates or industry averages. (Spend-based emissions represent the average GHG emission of a material per dollar or other currency unit spend)

Conducting LCAs on your own major products also provides crucial data for Category 11: Use of Sold Products and Category 12: End-of-Life Treatment of Sold Products.

“Think of it this way: the OCF gives you the big picture of your company's climate impact, while LCAs provide detailed close-ups of your products' environmental footprints, feeding crucial details back into that larger picture, especially for the complex Scope 3.” - François, Sustainability Manager 

Both contribute to a comprehensive understanding, as outlined in our main guide to carbon footprint accounting.” 

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Making the choice: which method suits your needs?

The decision between conducting an Carbon Footprint or an LCA (or both) depends entirely on your business goals and priorities:

• If your goal is... understanding your company's overall climate impact, setting corporate reduction targets, or meeting broad reporting requirements (like CSRD, B Corp, investor requests)... Start with an Organizational Carbon Footprint if your goal is... understanding the full environmental impact of a specific product, improving product design, comparing product alternatives, or creating an Environmental Product Declaration (EPD)... Conduct a Life Cycle Assessment (LCA).
• If your goal is... to gain the most accurate picture of your Scope 3 emissions, particularly those related to purchased goods or the use/disposal of your products... Use LCAs to inform your Carbon Footprint.

Both assessment methods are powerful tools with different capacities that guide your company to make informed decisions to reduce environmental impact.. Choosing between the two is all about selecting what best aligns with the questions you need to answer and the goals you want to achieve.

Hedgehog offers support with both tools, whether through our accessible Carbon platform for Carbon Footprint calculations or our expert Carbon Footprint Consulting and LCA Consulting services.