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Background document Considering Climate and Water Impacts for Chemical Selection: Characterising the Opportunities and Challenges OECD Workshop on Beyond Safety: Integrating Carbon and Water Metrics into Chemical Selection and Substitution | 1-2 October 2026

Selection and Substitution

Background Paper – Not for citation

Considering Climate and Water Impacts for Chemical Selection: Characterising the Opportunities and Challenges A Discussion Paper1 for a 1-2 October 2026 Workshop of the Organisation for Economic Cooperation and Development’s Working Party on Risk Management

This document was developed for the purpose of supporting discussions at the Working Party on Risk Management workshop. It was drafted by Molly Jacobs and Joel Tickner of the University of Massachusetts Lowell with the input of Eeva Leinala and Marie-Ange Baucher of the OECD. It has not been reviewed by the Working Party on Risk Management or Chemical and Biotechnology Committee.

Background Paper – Not for citation

Table of Contents Table of Contents .......................................................................................................................... 2 1.

Introduction ........................................................................................................................... 1

Clarifying the Decision Context ........................................................................................... 3 2.1 The chemical-selection decision context .......................................................................... 3 2.2 What most existing parameters were developed to answer .............................................. 3 2.3 What chemical selection specifically requires .................................................................. 4

Approach – Case Examples for Discussion ........................................................................ 6 3.1 Identifying Parameters for the Workshop Discussion: An Initial Scan ............................ 6

4. Critical Assessment – Characterising Climate and Water Resource Parameters and their Chemical Selection Decision Utility ................................................................................... 9 4.1 Climate Parameters ............................................................................................................... 9 Global Warming Potential (GWP) of the substance ............................................................... 9 Cradle-to-gate Product Carbon Footprint (PCF) per functional or declared unit ................. 12 4.2 Water Parameters ................................................................................................................ 15 Water consumption intensity per functional unit .................................................................. 15 Scarcity weighted water consumption .................................................................................. 18 Challenges and Potential Opportunities – Using Climate and Water Metrics for Chemical Selection ....................................................................................................................................... 22 4.1

Key Challenges ............................................................................................................. 22

Challenge 1: The context-dependence of most climate and water parameters limits their direct applicability for chemical selection. .............................................................. 22 Challenge 2. Methodological transparency and consistency to build trust in disclosed data ....................................................................................................................................... 23 Challenge 3. Absence of benchmarks ................................................................................ 24 4.2

Opportunities for Progress ............................................................................................ 24

Opportunity 1: Greater alignment on methodologies and assumptions to support data transparency and disclosure .............................................................................................. 24 Opportunity 2: Using Life Cycle Inventory databases and modeling resources to support comparisons of chemical alternatives ................................................................. 25 Opportunity 3: Establishing impact ranges and thresholds/benchmarks for PCF and water parameters ................................................................................................................ 25 Opportunity 4: Developing rules of thumb using lifecycle thinking and available data ............................................................................................................................................... 26 5.

Questions for Consideration .............................................................................................. 28

References .................................................................................................................................... 29

Background Paper – Not for citation

1. Introduction The tracking and reporting of environmental sustainability indicators have been an established business practice for decades. Companies across sectors routinely measure and disclose data on greenhouse gas emissions, natural resource use, energy consumption, and other sustainability attributes as part of corporate sustainability reporting, regulatory compliance, and stakeholder accountability. Frameworks such as the GHG Protocol, the Global Reporting Initiative (GRI) standards, and more recently the European Union’s Corporate Sustainability Reporting Directive (CSRD) have driven significant convergence around common parameters and methodologies at the corporate and facility level. Organisations such as the World Business Council for Sustainable Development (WBCSD) have played an important role in convening business leaders and developing cross-sector frameworks that underpin much of this progress, such as the PACT Pathfinder Framework for product-level carbon accounting. The chemical industry has been an active participant in this evolution: initiatives such as Together for Sustainability (TfS) and the Chem-X Environmental Sustainability Guideline reflect the sector's growing engagement with quantifying and disclosing the environmental footprint of its operations and products. A key question is how these data can inform the decisions regarding which chemicals and materials are manufactured and enter product formulations and industrial processes. There are increasing regulatory, market, and investor pressures on companies across the value chain to substitute chemicals of concern with safer and more sustainable chemicals. In 2021, OECD published Guidance on Key Considerations for the Identification and Selection of Safer Chemical Alternatives, to support substitution decisions (OECD 2021). Yet, advancing sustainable chemistry — the design, manufacture, and use of efficient, effective, safe, and more environmentally benign chemical products and processes — requires that sustainability considerations be embedded in chemical selection decisions alongside hazard and exposure potential. Advancing green and sustainable chemistry is an important global sustainability and economic priority as noted in the United Nation’s Global Framework on Chemicals (2023) and the US Sustainable Chemistry Research and Development Act (2021). More recently, given its current crisis, particularly in Europe – facing declining production, supply chain volatility, and high production costs – the chemical industry is in under significant economic pressure to reinvent itself (Cefic, 2025; García-Martínez, 2026). The move toward safer and more sustainable chemicals increasingly represents not only an environmental imperative but a significant competitive opportunity — one explicitly recognised, for example, in the European Chemicals Industry Action Plan (European Commission, 2025) and the Clean Industrial Deal. But it requires progress on tools and parameters that support chemical design and selection decisions for safer and more sustainable chemicals. The European Union's Safe and Sustainable by Design (SSbD) framework was developed to guide such design and substitution decisions. Although comprehensive in its thinking, guidance for implementing SSbD has been criticized as overly burdensome, with assessment complexity and data requirements that may hinder widespread adoption (van Dijk et al., 2025; Sudheshwar et al., 2025), underscoring the need for more practical, accessible approaches that build on the use of sustainability parameters companies are already using. In 2024, the OECD published a landscape study examining the sustainability attributes and associated parameters being used in chemical and material design and selection, based on company surveys and interviews (OECD, 2024). A subsequent workshop brought together interested parties 1

Background Paper – Not for citation to discuss findings from this landscape study and to identify priority next steps. This workshop was part of ongoing OECD efforts to support chemical substitution and advance the adoption of chemicals and materials that are both safer and more sustainable. The study found broad engagement: the vast majority of companies surveyed were already considering sustainability attributes, driven by long-standing corporate environment and sustainability goals, customer and purchaser expectations, and growing reputational risk concerns. The central aim of this effort was therefore to identify parameters that companies are already measuring and reporting, and to explore how those existing parameters might be better leveraged to inform chemical design, selection, and substitution decisions that builds on established business practice rather than introducing new assessment requirements. No single parameter emerged as standard practice, and sustainability attributes are being assessed at multiple levels, including chemical-, product-, process-, and facility-levels, which also vary by sustainability attribute and supply chain position. Most assessments were oriented toward corporate sustainability reporting rather than chemicallevel design and selection decisions. Workshop discussions identified climate and water resource impacts as priority attributes due to their environmental significance, the fact that they are a key focus of investor expectations, and because convergence on common parameters appears achievable. To support a 1-2, October 2026 workshop of the OECD Working Party on Risk Management (WPRM), this background paper examines potential climate- and water-related parameters that may be used in chemical selection for product/process design, chemical selection, and substitution decisions, with four objectives: (1) to clarify the decision context that chemical-level parameters need to serve in supporting chemical design and selection and how this differs from corporate, facility, and product-level sustainability assessment; (2) to identify and critically assess two conceptual approaches for each attribute — climate and water — drawn from existing methodologies, initiatives, and business practice; (3) to explore whether simple, inherent chemicallevel parameters or “rules of thumb” are achievable for evaluating climate and water impacts in chemical design, selection, and substitution; and (4) to outline questions for attendees to consider in advance of the workshop to support productive discussions. This background paper is intended to serve as a foundation for meeting discussions, not as a set of recommendations. It presents options with their benefits, limitations, and an assessment of their fit for purpose relative to the chemical design, selection, and substitution decision context. Parameters are assessed at their ability to distinguish chemical selection choices at the chemical level; not the facility, corporate, or whole-product level.

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2. Clarifying the Decision Context Sustainability parameters can serve different purposes, actions or decisions depending on the level at which assessment occurs. This background paper focuses on chemical-selection, substitution, and design decisions, the focus of the WPRM workshop on 1–2 October 2026. It distinguishes these decisions from adjacent, but fundamentally different contexts for which most existing sustainability parameters were developed and are being used.

2.1 The chemical-selection decision context This background paper, and the focus of the WPRM workshop is centered on chemical-level decisions for design, selection, and substitution within a specific application, such as a product formulation or industrial process. The central question being evaluated is: What are the climate and water-resource implications of choosing Chemical A vs. Chemical B or C or chemical design option A vs. B, or C for the same function? This comparative question generally operates at the chemical level. It requires parameters that can be attributable or “intrinsic” to a specific comparable across alternatives serving the same function, and accessible to actors who make or influence design and selection decisions across the value chain, including chemical suppliers, formulators, downstream manufacturers, and brands. Addressing this question requires a series of methodological choices: Which climate and water impacts should be considered? Which life-cycle stages are relevant? What units and standardised calculation methods should be used? Can impacts be benchmarked or scored in a way that enables meaningful comparison? The decision question itself, however, is the essential starting point: Which chemical offers the more favorable climate and water profile for this application? Beginning with the decision context is important to keep such an assessment anchored to the core question focused on chemical selection in a product/industrial design or substitution context.

2.2 What most existing parameters were developed to answer Sustainability parameters in current use were not generally developed to answer chemical selection question. Rather, they were developed to answer three related but distinct questions: •

•

Corporate sustainability reporting asks: How is the company performing overall? What is its sustainability related risks and dependencies? Parameters such as Scope 1, 2, and 3 GHG emissions, total water withdrawal and consumption, and energy intensity are typically aggregated at the company level (though may be regionally reported to identify specific risks), reported annually, and assessed against corporate targets or peer performance. They describe company-wide performance, not the comparative impact of a chemical used in a particular application. Facility-level environmental reporting asks: How is this production site performing? Parameters such as site water consumption, facility greenhouse-gas emissions, and effluent discharge are geographically and operationally specific. They reflect the climate and water impacts of producing chemicals at a particular site, including the technologies used, energy

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•

sources, material inputs, location, and operating conditions. However, facility-level reporting does not, on its own, allocate those impacts among individual chemicals produced at the site or specific processes. Nor does it capture a chemical’s inherent toxicity impact potential if released during use or at end of life. Product life-cycle assessment (LCA) asks: What are the environmental impacts of this product across its life cycle? LCA can, in principle, compare the climate and water implications of alternative chemical choices within a product system. However, its functional unit of analysis is typically the product or system, such as a garment, electronic device, or cleaning formulation, with the chemical treated as one input among many. Results depend on choices about functional units, system boundaries (cradle to gate, cradle to grave), allocation, and data sources. Chemical-to-chemical comparisons are therefore possible but require careful methodological alignment to reliable and decision-relevant.

These three contexts have generated sophisticated, well-validated sustainability parameters and reporting frameworks. The 2024 OECD landscape study confirmed that companies are actively using such parameters for all three contexts noted above, but that the primary orientation is toward corporate and facility-level sustainability reporting rather than chemical-level selection and substitution decisions. When companies do consider sustainability in chemical selection for design or substitution, they are often drawing on parameters developed for these other contexts and applying them at the chemical level as best they can with varying degrees of rigor and comparability.

2.3 What chemical selection specifically requires Chemical selection represents a more specific decision context: Comparing the climate and water impacts of chemical options for design or substitution decisions. This raises a fundamental question about the type of information needed to support such comparisons: •

Is the relevant climate or water characteristic attributable to the chemical itself and travel with it across the value chain, rather than being specific to the facility, company, location, production system, or final product?

This is the concept of an intrinsic parameter explored in this paper. Toxicity is an intrinsic parameter. For example, benzene is intrinsically carcinogen throughout its lifecycle, no matter how it is produced or used. Exposure controls may reduce risk but carcinogenicity remains the same. The distinction between intrinsic and extrinsic factors is important for other sustainability attributes because the climate and water implications associated with a chemical may also depend on the conditions under which it is produced or used. Different production routes, feedstocks, energy sources, and manufacturing locations may affect the climate or water impacts associated with producing the same chemical. These aspects are, for the most part, production choices (driven, for example, by economics or technology) that are extrinsic to the molecule itself. Likewise, a chemical may influence water or energy use in a downstream application, for example enzymes used in detergents.

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How could production- and application-dependent factors be considered when comparing chemical alternatives? Can they be incorporated in a way that supports a meaningful comparison between chemical or design alternatives serving the same function?

These questions frame the analysis that follows. The paper examines two climate-impact, and two water-impact parameters to explore whether each can provide comparable, interpretable, and decision-relevant information for chemical selection; whether the information can be applied across the value chain; and what contextual information may be needed when the parameter is not intrinsic to the chemical itself.

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3. Approach – Case Examples for Discussion This background paper examines a small number of case examples, specific climate and water sustainability parameters with associated methodologies. Rather than offering a comprehensive review of all available approaches, the cases are selected to represent instructive and potentially promising options for characterising climate and water resource impacts at the chemical level, and to surface the practical trade-offs and open questions for workshop participants to address.

3.1 Identifying Parameters for the Workshop Discussion: An Initial Scan Given the decision context established in Section 2 — what are the climate and water resource implications of choosing Chemical A vs. Chemical B or C for a given application, or chemical design option A vs. B, or C?— the first task was to identify which existing parameters could serve as potential options for chemical selection. Rather than conducting a comprehensive review of all environmental parameters in use, the scan was deliberately focused. The following inclusion criteria guided the scan: •

Attributable to the chemical or its production process rather than primarily to a facility, corporation, or whole product system

•

Grounded in an existing, documented methodology or real-world initiative that has demonstrated use

•

Of plausible use to both suppliers and users of chemicals in design, selection, or substitution decisions

Parameters meeting these criteria were then examined across a range of existing frameworks, industry initiatives, regulatory reporting requirements, and LCA practice as shown in Table 1. The scan identified two examples for climate and water resource use that meet the inclusion criteria and are most directly relevant to the chemical selection decision context. Climate: 1. the Global Warming Potential (GWP) of the substance itself, applicable to chemicals with direct radiative forcing potential; 2. Cradle-to-gate Product Carbon Footprint (PCF) per functional unit, the parameter being operationalized by TfS and the broader PACT framework. Water: 1. Water consumption intensity per functional unit, the foundational LCA inventory parameter under ISO 14046; 2. Scarcity-weighted water consumption, the parameter TfS/Chem-X has chosen to operationalise in its Environmental Sustainability Guideline. A number of additional parameters were considered but not advanced as case examples for discussion. In most instances, exclusion reflected one of three reasons: the parameter operates solely at the facility, corporate, or product level rather than the chemical level; it is methodologically equivalent to one of the case examples rather than genuinely distinct; it is a

Background Paper – Not for citation geographic contextualisation tool rather than a chemical-level parameter in its own right; or the use of the parameter is newer, and its application at too early a stage to assess its utility. These excluded parameters are documented in Tables 1 and 2 with rationale, to support broader workshop discussions. Workshop participants are encouraged to identify additional parameters not included in Table 1 that could be considered Table 1. Climate- Related Sustainability Parameters Not Advanced for Discussion Parameter

How Expressed

Initiatives / Sectors / Methods Using It

Why Not Advanced as a Primary Case for Chemical Selection

Science-based Targets — chemical sector

Emissions reduction targets, tCO₂e

SBTi chemical sector pathway

Corporate-level tool; not a chemical-level parameter

Biogenic carbon / feedstock origin

kg CO₂e per functional unit, biogenic vs. fossil

TfS PCF v3.0, ISO 14067, ISCC Plus, RSB

Dimension of PCF methodology rather than standalone parameter; applies to subset of bio-based chemicals only

Avoided Emissions

Kg CO₂e per functional unit

WBCSD

Emerging approach; not a chemical-level parameter

Acronyms Defined: CO2 equivalent (CO₂e); International Sustainability and Carbon Certification (ISC); ISO (International Standards Organization); Roundtable on Sustainable Biomaterials (RSB); Science-Based Targets Initiative (SBTi); Together for Sustainability (TfS); WBCSD (World Business Council for Sustainable Development

Of special note in Table 1 is the parameter of Avoided Emissions (AE) for assessing greenhouse gas emissions reductions enabled by a product or solution relative to a defined reference scenario. Guidance developed by the World Business Council for Sustainable Development (WBCSD), including its 2025 methodology, provides an increasingly structured basis for applying the approach. WBCSD reports growing interest, industry testing, and development of sector-specific applications and tools (WBCSD 2025). However, AE remains considerably less mature than parameters to be discussed at the 1-2 October workshop, such as Product Carbon Footprinting (PCF). Its comparative and application-specific nature is potentially relevant to chemical selection, however, as it could (in theory) evaluate the difference in emissions between an incumbent chemical or product system and an alternative while accounting for downstream or use-phase consequences that may not be captured in a cradle-to-gate product footprint. The approach has not yet been evaluated for its utility in chemical selection and is not an inherent property of a chemical or a value that can readily accompany a chemical across supply-chain tiers. While not yet sufficiently established in practice, AE represents an approach to evaluate for future application in the chemical design and substitution context.

Background Paper – Not for citation Table 2. Water- Related Sustainability Parameters Not Advanced for Discussion Water withdrawal – total volume taken from a water source as opposed to consumption

m³ per functional unit

GRI 303, CSRD/ESRS E3, facility reporting

Consumption is the more meaningful resource impact parameter for chemical selection.

ESRS E3 water metrics

m³ total consumption and withdrawal; water in stressed areas (m³)

CSRD/ESRS E3

Includes both consumption and withdrawal. Measurement is corporate and facility-level

Aqueduct water stress

Geographic stress score not water shed stress score, dimensionless

ESRS E3, C2C, CDP Water

Geographic contextualisation tool; operates at watershed / site level not chemical level; an input for water scarcity rather than standalone parameter

Water Stewardship

Facility water management, tiered certification

C2C v4.1, AWS Water Stewardship

Facility-level manufacturing assessment; not a chemical-level parameter. AWS Water Stewardship is a stewardship effort; explicitly a facility-level and catchmentbased effort. No clear metric, rather it is a certification framework

Acronyms Defined: Alliance for Water Stewardship (AWS); C2C (Cradle to Cradle); CDP (formerly the Carbon Disclosure Project); Corporate Sustainability Reporting Directive (CSRD)/European Sustainability Reporting Standards (ESRS); GRI (Global Reporting Initiative); ISO (International Standards Organization); Product Carbon Footprint (PCF); World Resources Institute (WRI)

4. Critical Assessment – Characterising Climate and Water Resource Parameters and their Chemical Selection Decision Utility Each of the four case examples is characterised against three factors designed to surface practical trade-offs and inform workshop discussion, rather than to rank or recommend among them. These factors include: 1. Convergence: The current level of agreement on the parameter's definition and methodology; 2. Uptake and Viability: The extent of current use and practicality of use across a wide range of stakeholders; and 3. Value Chain Fit: How well the parameter serves both upstream and downstream actors and travels with the chemical across several layers of a supply chain. Based on the above factors, the primary benefits and limitations of each for chemical selection (including design and substitution) are summarised at the end of the review for each parameter.

4.1 Climate Parameters Global Warming Potential (GWP) of the substance Global Warming Potential (GWP) is an IPCC-defined metric that expresses how much a given greenhouse gas warms the atmosphere over a specified time horizon relative to carbon dioxide, which serves as the reference gas with a GWP of 1. GWP is expressed as kg CO₂e per kg of substance and is published for a 20-, 100-, and 500-year time horizon, with GWP100 (100-year) the standard used in regulatory frameworks and corporate reporting. GWP values are derived from the physical and chemical properties of the substance itself. Its radiative efficiency and atmospheric lifetime make GWP an intrinsic, substance-level property analogous to a toxicological hazard endpoint in chemical hazard assessment. GWP is applicable to chemicals that are longer-lived in the atmosphere with direct radiative forcing potential, including fluorinated gases (e.g., HFCs, PFCs, etc.,) certain halogenated solvents and blowing agents, nitrous oxide, and methane in specific industrial contexts. For this subset of chemicals, GWP is directly associated with the molecular identity of the substance. For example, a specific HFC has a fixed, published GWP value regardless of who produces it, where, or by what process. The GWP of a substance does not change based on supplier or production route. Convergence There is strong convergence across research, regulatory, and industry users of GWP as a parameter. Values are published and periodically updated by the IPCC (2021) and are adopted across virtually all GHG accounting frameworks including the GHG Protocol (WRI and WBCSD 2004), ISO 14064 (2018), and national GHG inventories. GWP100 is the standard time horizon used across regulatory and voluntary frameworks globally, though GWP20 is gaining traction in contexts where near-term climate impacts are prioritised. 9

Convergence at the chemical level has been strengthened by the Globally Harmonized System of Classification and Labeling of Chemicals (GHS), in its most recent revision (United Nations 2025). This revision introduced a new hazard class, "Hazardous by Contributing to Global Warming" (United Nations 2025). This new classification criterion applies to substances and mixtures containing at least 0.1% of a Montreal Protocol-listed ingredient with significant GWP. Importantly, the GHS Rev. 11 classification criterion is explicitly tied to the Montreal Protocol substance list. It does not extend GWP classification requirements to the broader universe of chemicals in commerce. GWP values for controlled substances are embedded in the Montreal Protocol and its Kigali Amendment (Annexes A, C and F), providing a regulatory reference list that is independently maintained and widely recognised (UNEP 2016). A hazard assessment methodology, GreenScreen® (Clean Production Action, 2026), has recently updated its methodology to formalise the inclusion of GWP to support chemical-to-chemical comparisons. Although GWP is not currently included in GreenScreen® benchmark scores (which supports decisions based on the hazard profile of 20 human health and environmental hazard endpoints) its formal inclusion in the methodology represents a meaningful step toward integrating climate impact into chemical hazard assessment frameworks already in use for product/process design and substitution decisions. GWP is considered in the scoring of the Massachusetts Toxics Use Reduction Institute’s P2OASyS chemical selection methodology (TURI n.d.). It is important to note that both the Montreal Protocol substance list and the IPCC GWP tables function conceptually as priority substance lists, which are analogous to Restricted Substances Lists (RSLs) used in chemicals management practice to avoid known problematic chemicals. Convergence on GWP is therefore strong and actionable for the defined set of substances on these lists, but the lists themselves are not comprehensive. A chemical not appearing on the Montreal Protocol annex or in IPCC GWP tables does not necessarily have a GWP of zero. Uptake and Viability GWP is in widespread use in contexts relevant to chemical selection, although uptake is concentrated in sectors where it is already a regulatory or commercial requirement. For example, in the refrigerant and heating, ventilation and cooling (HVAC) sector, GWP avoidance has been a primary selection criterion (US EPA 2026). In blowing agents, aerosol propellants, and certain solvent applications, GWP is similarly well-established sustainability parameter to consider, often embedded in customer specifications and product stewardship programs (US EPA 2026). Outside these sectors, uptake as an explicit chemical selection parameter is more limited. For the subset of chemicals to which it applies, GWP is an important chemical-level climate parameter, usable by a wide range of interested parties. Because GWP is an intrinsic physicochemical property of the substance (determined by its molecular structure, radiative efficiency, and atmospheric lifetime) published values that are publicly available from IPCC assessment reports, can be used without requiring supply chain or production-level data. However, the primary viability constraint is scope. Published GWP values currently exist for only a small and defined subset of chemicals in commerce, primarily substances regulated under the Montreal Protocol and major industrial greenhouse gases. Most chemicals have not yet been assessed. For the vast majority of chemicals in commerce, atmospheric lifetimes are too short to generate

meaningful radiative forcing, and GWP values have not been measured or published (Szopa et al. 2021). While GWP is in principle calculable for any molecule from its physicochemical properties, the measurement and modeling infrastructure to establish values more broadly does not yet exist at scale. Emerging computational chemistry approaches may eventually narrow this gap but are not yet at a stage of sufficient reliability for regulatory or commercial use. GWP is therefore a viable parameter to support chemical selection but is limited in use across the full inventory of chemicals. For GWP specifically, the threshold and categorisation interpretation challenge has been addressed by GreenScreen®, which establishes High (≥2,500), Medium (100–2,499), and Low (<100) GWP categories to support chemical-to-chemical comparison within its hazard assessment framework (Clean Production Action 2026). This represents a practical solution that converts a continuous numerical value into an interpretable, actionable category for chemical selection purposes. The extent to which this solution is broadly adopted beyond GreenScreen® users, and whether equivalent benchmarking approaches could be developed for other chemical assessment frameworks or sectors, is an important question for workshop discussion. Value Chain Fit GWP is well-suited to value chain use because it is a physicochemical property of the substance — the same published value applies regardless of where it is made, who in the supply chain is using it, at what stage, or for what purpose. A chemical supplier, formulator, and brand can all reference the same GWP value without any data exchange, supplier disclosure, or reconciliation of methodological choices. For upstream chemical suppliers, GWP is relevant primarily as a product attribute to communicate to downstream users, particularly in sectors where GWP thresholds are embedded in customer specifications or regulatory requirements, and through SDS documentation for Montreal Protocol-listed substances where GHS Rev. 11 is adopted nationally. However, for the majority of industrial supply chains where the chemicals in use are not Montreal Protocol-listed substances, GWP values do not exist. This limits GWP's role as a value chain chemical selection parameter to those sectors and supply chains where Montreal Protocol substances are actively used. •

For chemical suppliers evaluating alternative molecules or production routes. GWP can support comparison of alternative molecules where established values are available.

•

For formulators or product manufacturers selecting among alternative chemicals that perform the same function. GWP can provide a straightforward screening parameter when alternatives have established GWP values. A downstream user can compare the GWP of alternative substances without obtaining production-specific information from suppliers. Its utility is therefore high where relevant GWP values exist but limited by the relatively small number of chemicals for which such values have been established.

Table 3. Summary for Chemical Selection: Global Warming Potential Primary Benefit(s) – Chemical Selection Decisions

GWP is an intrinsic physicochemical property of the substance making it usable for chemical selection decisions across a wide range of stakeholders and value chain positions.

Primary Constraint(s) – Chemical Selection Decisions

The convergence of IPCC science, Montreal Protocol regulation, GHS Rev. 11 classification, and hazard assessment frameworks such as GreenScreen® around the same GWP values for the same substances represents a high level of parameter alignment at the chemical level. Published GWP values exist for only a small and defined subset of chemicals in commerce, primarily substances regulated under the Montreal Protocol. Thus GWP functions more as a priority substance/red list than a comprehensive parameter across the full chemical universe. Although GWP embodies an intrinsic property of a chemical, it does not capture climate impacts associated with how it is manufactured.

Cradle-to-gate Product Carbon Footprint (PCF) per functional or declared unit The Product Carbon Footprint (PCF) quantifies greenhouse gas (GHG) emissions associated with a product across defined life-cycle stages. PCF is expressed as kilograms of CO₂-equivalent (kg CO₂eq) per declared or functional unit, with all relevant greenhouse gases converted into a common climate impact metric using global warming potential characterization factors. ISO14067 (ISO 2018) and the GHG Protocol Product Standard (WRI and WBCSD 2011) create international standards for product carbon foot printing, both of which allow flexibility in defining the system boundary (e.g., cradle to grave, gate to gate, cradle to gate, etc.,) and the scope of the assessment. Unlike GWP, which is an intrinsic property of certain greenhouse gases, PCF is not an intrinsic property of a chemical. Rather, it characterises carbon emissions throughout the lifecycle of a product and is dependent on the defined system boundary. For example, for chemical producers evaluating cradle-to-gate emissions, the carbon footprint includes the production system used to manufacture a chemical product, reflecting factors such as feedstock selection, energy sources, manufacturing technology, geographic location, the allocation of emissions among co-products, etc. Consequently, the same chemical may have substantially different PCFs depending on how and where it is produced. Convergence There is strong convergence around the methodology for calculating PCFs. ISO 14067 (2018) establishes internationally recognized principles and requirements for quantifying and reporting PCFs and can be applied to any life cycle boundary (e.g., cradle to grave, gate to gate, cradle to gate, etc.), provided the system boundary is clearly defined and justified. ISO 14067 (2018) support use of both functional unit or declared unit depending on the assessment scope. Within the chemical sector, this approach has been operationalised through the Together for Sustainability (TfS) Product Carbon Footprint Guideline (2024). Developed through a multi-year collaboration with more than 60 companies, representing the global chemical industry, the PCF

Guideline provides harmonised methodological rules for calculating, reporting, and exchanging PCF data across chemical value chains, where chemical production processes and their energy and carbon intensity vary significantly, including upstream feedstocks, basic chemistry building blocks (often used to make multiple products), waste streams and byproducts (which are often reused), frequent co-products produced in a chemical reaction, and use of toll or contract manufacturers to make parts of a final product. As it is only a cradle-to-gate and not full lifecycle accounting, the TfS PCF uses the declared unit, defined as 1kg of unpackaged product (or for gasses 1m3 of product) versus the functional unit.2 Hence under the TfS guideline, the Product Carbon Footprint= Scope 1 + Scope 2 + relevant upstream Scope 3.1 emissions allocated to the product or kg CO₂eq per kg product. The guideline prescribes standardised decision rules (allocation rules, etc.,) for key accounting challenges, such as distributing emissions between co-products in a multi-output process, minimising methodological choices by company. Upstream emissions data from purchased feedstocks and basic chemicals are included using supplier specific data, where feasible, to enable more accurate reporting. Where such data are not available process level estimation approaches (proxy data) and emissions factors are used. According to the Guideline, PCF data should be updated at least every three years or sooner if a major process, supplier, or feedstock change occurs to account for changes in upstream manufacturing or new production technologies. The latest version of the TfS Guidelines provides guidance on both carbon capture utilisation and storage and mass-balanced products to avoid inconsistent or double counting of carbon benefits. There is strong convergence on the PCF parameter, including its definition, unit of expression, and calculation methodology. However, how to interpret reported PCF values is considerably weaker. A PCF of 3.2 kg CO₂e per kg of chemical, for example, is not independently meaningful for comparing different chemicals for the same application (versus comparing manufacturers making the same chemical) without a basis for determining whether that value represents high, moderate, or low carbon intensity relative to societal or sector expectation or norms. Unlike GWP, for which GreenScreen® has established interpretive categories (High ≥2,500; Medium 100–2,499; Low <100), no equivalent benchmarks or reference ranges currently exist for PCF at the chemical level. This means that even where PCF values are calculated and disclosed using harmonixed methodology, decision-makers lack an agreed basis for determining whether a difference between two values represents a meaningful environmental distinction or falls within the range of methodological uncertainty. Uptake and Viability Product Carbon Footprints have achieved broad uptake as a product-level climate parameter across industry sectors given internationally recognised standards including ISO 14067 (2018) and the 2

According to the Guideline, cradle-to-gate includes all processes, flows, and activities attributable to the product system from extraction, manufacturing, and transportation, until the product leaves the factory gate. This includes all product related direct and indirect emissions of the production process, including fossil or biogenic removals, energy consumption from electricity, external heat and steam; fuel consumption, utilities, agriculture and land use, manufacturing, inbound transportation, site-to-site transportation, treatment of process waste and wastewater treatment and all emissions of raw material consumption including catalysts that are consumed in the reaction. This also includes removals through reused byproduct or carbon capture inside the production unit system. Downstream impacts from product use and end-of-life are not included nor are non-product related emissions including manufacturing of production equipment, buildings, travel, and R&D activities.

GHG Protocol Product Standard (WRI and WBSBD 2011). A mature infrastructure exists to support PCF calculation and implementation, including sector-specific guidance, life cycle inventory databases such as ecoinvent (2025) and GaBi (Sphera 2025), carbon accounting tools, and data exchange platforms. Within the chemical sector, the most mature implementation (albeit at the early stages) is the TfS PCF approach. In addition to developing harmonised calculation rules, TfS has designed learning modules, a PCF Exchange Solution, allowing suppliers and customers to securely exchange product-level carbon footprint data throughout supply chains, and a standardised data model. The TfS methodology has also been aligned with broader initiatives, including the WBCSD’s Partnership for Carbon Transparency (PACT) (2023), and serves as the foundation for initiatives such as Chem-X/TfS Sustainability Guidance (2025) supporting the Digital Material Passport. While PCF has become an important product-level climate metric, its utility and viability for chemical selection is constrained by the fact that it characterises the production system rather than the chemical itself. The PCF is generally not intrinsic to a specific chemical or process. It is highly dependent on region, energy source, co-products, how emissions and waste are treated, and other factors. While there may be some ways to estimate carbon emissions associated with intrinsic properties of specific chemicals (those in multi-step processes or made from biomass) or processes (created by steam cracking), given that the PCF is cradle to gate, energy production and other factors that are not intrinsic to the molecule are included. Hence the same chemical produced in two different regions or by different processes could have very different PCFs. Further, given the many process steps for chemistries, including byproducts and other factors, allocation rules, use of proxy data, and other assumptions could result in very different PCF calculations for different companies. TfS notes that PCF results between two comparable materials completed by different companies may differ because of differences in technologies, quality of data used from suppliers, methodological decisions, geographical aspects, etc. While assumptions and the basis for modeling should be transparently described and the Guideline should reduce differences in approach, TfS notes that at this point comparison of PCF data of similar products is difficult and should not be done at this point. Any manufacturer calculating a PCF for a product, such as within the textile, electronics or other manufactured goods, will similarly generate a value that reflects the specific production system used – usually the product level. For chemical selection decisions, this distinction is critical. A PCF value can provide meaningful information about the carbon intensity of a specific product system or supplier pathway, but it cannot be interpreted as an inherent characteristic of the chemical itself. Comparisons among alternatives therefore require alignment of functional units, production assumptions, system boundaries, and methodological choices.

Value Chain Fit PCF can inform chemical selection decisions for substitution or design across value chain positions, but its utility depends on what is being compared and under what conditions.

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For chemical suppliers evaluating alternative molecules or production routes. The PCF could help support an analysis of alternative molecules, pathways, and feedstocks and processes in chemical design by comparing cradle to gate emissions associated with making one chemical versus another. In this context, the comparisons would need to be based on similar regions and other production conditions for relevant comparisons. The PCF could also be helpful in identifying process or procurement improvements to reduce carbon emissions from cradle to gate. However, some of these – including carbon capture – may not reduce the intrinsic carbon footprint associated with manufacturing a specific chemical.

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For formulators or product manufacturers selecting among alternative chemicals that perform the same function, the utility of PCF for chemical selection is limited by the fact that there is no single PCF value for a given chemical. PCF is not intrinsic to a chemical (unless it is only made by one process and one manufacturer). PCFs shared by potential suppliers could differ significantly for the same chemical as a result of the factors noted above. Life cycle inventory databases provide regional or technological averages that could in principle support relative comparisons when applied under consistent system boundaries and methodologies. However, whether such comparisons yield meaningful and reliable data to inform comparisons in chemical selection remains untested.

Table 4. Summary for Chemical Selection: PCF per functional unit/declared unit Primary Benefit(s) – Chemical Selection Decisions Primary Constraint(s) – Chemical Selection Decisions

A standardized and widely accepted approach to calculating carbon emissions. Significant effort within the chemical sector to minimize differences in assessment approaches between companies The PCF is not intrinsic to a molecule or production process. At this point comparability of PCFs is difficult given complexity of chemical manufacturing and the range of assumptions and decision-points involved in a cradle to gate assessment. Regional or company differences in PCF for the same chemical are likely to be significant.

4.2 Water Parameters Water consumption intensity per functional unit Water consumption is expressed as the volume of freshwater consumed per functional unit (m³ per functional unit), where consumption refers to freshwater withdrawn that is not returned to the same watershed — because it is evaporated, incorporated into products, transferred to another basin, or otherwise unavailable for immediate reuse. The chemical industry uses water across a wide range of production activities, including chemical synthesis and formulation, heating and cooling systems, cleaning and maintenance, steam generation, evaporative processes, waste treatment, and production of aqueous products. Upstream (cradle-to-gate) water consumption can also be associated with agricultural feedstocks for biobased chemicals, mining of mineral inputs, energy generation, and production of water-intensive chemical building blocks. For downstream product manufacturers, water consumption can also be

relevant to chemical selection where the choice of chemical affects the amount of water required to achieve the same function, for example, by changing washing, rinsing, dilution, purification, or other water-intensive processing requirements or requirements during the use phase. Table 5 provides illustrative examples of where water consumption could be used to inform chemical selection. Water consumption is for the most part not an intrinsic property of a chemical in the same sense as a substance-level physicochemical property. Although chemical characteristics, such as emulsions, can influence water demand, water consumption mostly depends on the production or application system in which the chemical is produced or used. Under ISO 14046, water consumption quantifies the freshwater consumed across the life cycle stages included within an assessment, expressed per functional unit. Reported values therefore characterise the defined product system rather than the chemical in isolation and depend on factors including production technology, feedstocks, energy sources, process efficiency, water management practices, geographic location, system boundary, and functional unit. Chemical characteristics can nevertheless be an important determinant of water demand within that system. For example, an aqueous formulation, a bio-based feedstock, or a chemical that enables fewer downstream rinsing or washing steps may result in different water consumption than alternatives. In these cases, the water-related difference generally arises from the interaction between the chemical and the production or application system rather than from a fixed water consumption value attributable to the chemical itself. Table 5. Chemical selection influencing water consumption Industry/Application Chemical production

Textile dyeing and finishing

Metal finishing

Water treatment / membrane systems Catalytic manufacturing processes

Chemical Choice alternative chemical designs or production routes requiring less water-intensive synthesis or purification High-exhaustion dyes, low-salt reactive dyes, enzyme-assisted pretreatment Alternative conversion coating chemistries (e.g., zirconium-, titanium-, or silane-based systems) Anti-scalants, dispersants, membrane cleaning chemicals More selective catalysts

Influence on Water Consumption Lower water consumption in chemical manufacture and potentially lower upstream water consumption associated with feedstocks and energy Reduces rinse cycles, decreases wash water, improves dye uptake Fewer rinse stages, reduced sludge generation, greater opportunity for water recycling Enables higher water recovery and increased reuse of process water Increased reaction efficiency enabling fewer purification and washing steps, reduced process water demand

Convergence ISO 14046 provides an internationally recognised framework for consumptive water assessment within the water footprint of an LCA, establishing the definitional distinction between water withdrawal and water consumption that is now broadly accepted across LCA practice, corporate sustainability reporting, and Environmental Product Declarations (EPDs). Convergence on the parameter definition is therefore reasonably strong.

Convergence on reported values is considerably weaker, however. Water consumption figures depend heavily on methodological choices, including system boundaries, allocation procedures, treatment of recycled or treated water, background LCA datasets, and geographic assumptions; none of which are fixed by ISO 14046, which allows substantial flexibility. Similar to PCF, two chemical suppliers producing chemically identical products may report substantially different water consumption values, reflecting differences in manufacturing technology/practices and modeling assumptions. Notably, although the Chem-X Environmental Sustainability Guideline (2025), which is the most significant chemical-sector initiative in this space, incorporates water consumption into its scarcity-weighted water-use calculation, the approach is not intended to establish water consumption as a standalone chemical-selection parameter. As such, methodological efforts have focused primarily on harmonising the broader scarcity-weighted water-use assessment rather than establishing a single, independently reported measure of water consumption for chemical products. Uptake and Viability As noted above, water consumption is widely used in LCA as well as EPDs, and corporate sustainability reporting. It is applied across product, facility, and corporate levels. However, the use of a water consumption as at the chemical product level specifically (where it would need to be expressed per functional unit of chemical produced and disclosed by chemical suppliers) is not yet standard practice though relevant as shown in Table 5. A viability constraint in assessing water consumption is the absence of established thresholds or benchmarks to interpret whether a reported value represents high, moderate, or low water consumption impact. Without sector-specific reference points, a water consumption figure of 15 m³ per functional unit, for example, is not independently actionable; it requires additional context about what values are typical for that chemical class or production route before it can inform a selection decision. Value Chain Fit Water consumption per functional unit has limited but context-dependent utility for chemical selection decisions. Unlike intrinsic chemical properties, water consumption does not travel with the chemical as a fixed attribute; rather, it reflects the production system or application system defined by the assessment boundary. Its usefulness for chemical selection therefore depends on whether the relevant decision context is comparing alternative chemicals as manufactured or evaluating how alternative chemicals influence water use in their intended application. •

For chemical suppliers evaluating alternative production routes, water consumption can support internal process optimisation and decisions about manufacturing technologies, feedstocks, or process improvements. However, differences in water consumption among production routes for the same chemical do not represent differences in the intrinsic waterrelated characteristics of the chemical itself.

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For formulators or manufacturers selecting among alternative chemicals that perform the same function, water consumption data may provide useful information when the choice of chemical influences downstream process water requirements. For example, in textile 17

processing or metal finishing operations (see Table 5). For chemical selection choices in the context of a substitution decision, the utility of water consumption is limited unless the compared alternatives are evaluated using consistent functional units and system boundaries Table 6. Summary for Chemical Selection: Water consumption intensity per functional unit Primary Benefit(s) – Chemical Selection Decisions

Primary Constraint(s) – Chemical Selection Decisions

A well-defined, broadly understood parameter expressed in consistent units (m³ per functional unit) across LCA practice and corporate reporting, with mature inventory databases available to support calculation. Most immediately actionable for downstream users who can apply the parameter consistently across chemical alternatives within their own process or product context to identify options with lower water consumption per unit of function delivered. Not currently reported at the chemical product level by most suppliers and not used as a review criterion in chemical selection in practice. Characterises the production/process system rather than reflecting an intrinsic characteristic of the chemical. No established thresholds or benchmarks exist to interpret whether a reported value represents high, moderate, or low water consumption impact, further limiting actionability for chemical selection decisions.

Scarcity weighted water consumption Water scarcity expands upon water consumption intensity by accounting for the relative impact of consuming a given quantity of water in locations with different levels of water availability and stress. It is expressed as m³ world eq., and calculated by applying a water scarcity characterisation factor (CF) to water consumption: Water Scarcity [m³ world eq.] = Consumptive Water Use [m³] × water scarcity CF [m³ world eq./m³] Water consumption is defined in the preceding section. A water scarcity characterisation factor is then applied based on the geographic location of the water consumption. As discussed above, chemical characteristics and production processes can influence the amount of water consumed in manufacturing or use, for example, through the use of aqueous solvents, biomass-based feedstocks, or water-intensive processing. Scarcity-weighted water consumption adds a geographic dimension by accounting for the relative availability and stress on water resources where that consumption occurs. For example, a production process consuming a given quantity of water in a relatively water-abundant location such as Vermont in the U.S., would generally have a lower scarcityweighted impact than the same process consuming the same quantity of water in a water stressed location, such as Arizona in the U.S.. Water scarcity can affect ecosystems and biodiversity, human health (malnutrition and infectious disease through water quality) and deplete reserves for the future. As with water consumption, scarcity-weighted values characterise the production or product system being assessed rather than the chemical in isolation. The resulting values depend on the

defined system boundary as well as where the water consumption takes place. They are the sum of the indexed scarcity values of the various elements of the production process. Convergence There is increasing convergence surrounding the conceptual and methodological approach to assessing water scarcity, although important differences remain in the underlying waterconsumption inventory. ISO 14046 provides principles and requirements for a water footprint assessment based on LCA but does not mandate a single characterisation method. AWARE (Available WAter Remaining) is a consensus-based method for assessing the potential impact of water consumption based on the relative availability of water remaining for human and ecosystem users, developed by the Water Use in Life Cycle Assessment working group of the UNEP-SETAC Life Cycle Initiative (Boulay et al. 2018). Characterisation factors are normalised to the global average, with a factor of 1 representing world-average conditions and higher factors representing greater potential scarcity. AWARE 2.0 (Boulay et al. 2025), updates the method using more recent hydrological data and improves the representation of river basins, environmental water requirements, and water consumption. Characterisation Factors Range from 0.1 (very low water scarcity) to 100 (extreme water scarcity) with a CF of 10 equivalent to about 10 times less available water than the world average. Thus, the AWARE methodology provides an interpretive scale for understanding the relative scarcity associated with water consumption, rather than simply producing an uncontextualied numerical value. AWARE serves as the basis for the water scarcity characterisation factors used in the environmental footprint (EF) methodology developed by the European Commission which underscores the Chem-X/Together for Sustainability Environmental Sustainability Guideline for the Chemical Industry (2025). The EF factors include greater granularity to improve differentiation of countries in Europe, supporting greater consistency with other environmental impact categories assessed as well as broader acceptance and comparability of results and practical implementation in product sustainability assessments. Despite the convergence in terms of methodological approach in how water scarcity is calculated, including characterisation factors, there is less convergence – as noted previously – in how water consumption is calculated. The ChemX Sustainability Guideline (2025) references the TfS PCF Guidance (2024), which generally follows cradle-to-gate supply-chain accounting principles rather than a facility-only perspective. The guidance example of production of one ton of solvent in Spain notes that “the calculation is performed gate to gate to facilitate the understanding of practitioners.” Therefore, the same procedure should be performed for the supplied material and energy suppliers’ water consumption and summed up with the gate-to-gate calculation to entail the cradle to gate calculation needed for the product level water scarcity. A number of assumptions are made as to whether water consumed is considered returned useable form, including whether it undergoes adequate treatment before disposal, which can vary by region. Further, given the challenges in calculating water losses, in lieu of measured data, the ChemX method includes numerous default water loss assumptions for chemical production, such as 7% of input value for process water, which could vary significantly across processes. Finally, the CFs which are generally by country may fail to provide adequate regional or temporal granularity in terms of water stress (Kaewmai et al. 2019).

Uptake and Viability As noted, water scarcity is widely accepted and used in LCA, environmental foot printing, Environmental Product Declarations, and corporate sustainability reporting. It is being used in chemical production location choices among chemical manufacturers but its utility in chemical design and selection appears to be less frequent to date. Generally, the ChemX Guidelines allow some level of comparability between chemicals or processes and benchmarks for high and low water scarcity do exist (e.g., <1 the global average and +>100). However, for the most part these are factors that are extrinsic to the chemical being manufactured. As such, the value of the ChemX water scarcity guideline in chemical design and selection may be in comparing processes and regions of production rather than molecules specifically. For example, processes that require cooling or use biomass as a raw material may have greater water scarcity implications than other types of processes. Nonetheless, across global supply chains, the largest determinant of water scarcity footprint will normally be location rather than consumptive use. Value Chain Fit Water scarcity is increasingly considered in lifecycle assessment of products, particularly in water intensive manufacturing processes. It is a useful metric to answer the following questions: • • • •

Which raw materials contribute most to our water-scarcity footprint? Which sourcing regions have the greatest potential water scarcity impacts? What are the water impacts of alternative product designs? How can chemical or product design reduce downstream water use?

Its use is primarily best for water footprinting and sustainability reporting as well as strategic sourcing and supply-chain risk assessment. Water scarcity may be less helpful in comparing alternatives produced in the same region, unless there are significant differences in water use between process or raw material types. The primary value chain use of water scarcity indicators is in product level LCA, including Product Environmental Footprint or Environmental Product Declarations and in disclosure frameworks such as Carbon Disclosure Project Water Security. It is also used in the context of standards such as the Alliance for Water Stewardship (AWS) Standard, which considers site specific water risks and dependences. Water scarcity has more limited value in chemical design and selection decisions as it is not intrinsic to a molecule or process. However, a chemical design (for example low or no water dying processes or more concentrated products) could significantly impact downstream water use. In these cases, the chemical design or selection choice is not focused on reducing cradle to gate water scarcity impacts but addressing downstream water use in processes and products. •

For chemical suppliers evaluating alternative production routes, water scarcity provides minimal information beyond consumptive use to support raw material choices, process design or other improvements to lower water use per unit of output. It is most helpful at

determining where producing a particular chemical or having a particular process will have the lowest water scarcity impact. •

For formulators or manufacturers selecting among alternative chemicals that perform the same function, water scarcity provides minimal additional information beyond consumption except in helping to identify manufacturers in regions with lowest possible water scarcity impact.

Across chemical manufacturers and downstream users, water scarcity is best used as a parameter for identifying hotspots, making production decisions with regards to water use or scarcity (and directing innovations that reduce water consumption to those areas with greatest water scarcity), in choosing suppliers and manufacturing locations with lower water scarcity impacts and in supporting sustainable procurement and disclosure. Table 7. Summary for Chemical Selection: Scarcity weighted water consumption Primary Benefit(s) – Chemical Selection Decisions Primary Constraint(s) – Chemical Selection Decisions

A well-defined, broadly accepted metric in water footprinting in LCA practice and corporate reporting expressed in consistent units m³ world eq, with improving inventory databases available to support calculation. Ability to distinguish between low, medium, and high-water scarcity footprint. Geographic-dependence mostly drives water scarcity impact – which is extrinsic to the molecule or process. Characterisation factors have limitations in that they do not often reflect significant differences in water stress within countries or regions or differences over time (or across seasons). The regional dependency could potentially conflate chemical selection with supplier selection and production location must be known which is not always available to downstream users or may change over time.

Challenges and Potential Opportunities – Using Climate and Water Metrics for Chemical Selection The parameters examined in this paper are among the most developed existing options for characterising climate and water resource impacts in chemical selection, design, and substitution decisions for chemical manufacturers and users of chemicals. They differ substantially, however, in what they characterise. GWP is an intrinsic chemical property; PCF, water consumption, and scarcity-weighted water consumption generally characterise production systems. Each offers genuine value within defined contexts, but none is currently fit for purpose as a standalone tool for comparing chemical alternatives in a comparative chemical selection context across the value chain. Importantly, three of the four parameters including PCF, water consumption and scarcityweighted water consumption are generally being reviewed on a cradle-to-gate basis (upstream emissions and consumption and hence impact of the steps including the final molecular transformation including energy use) by chemical manufacturers, which provides an accounting that chemical suppliers and downstream users can use in chemical selection. For example, a full cradle-to-gate upstream is incommensurate with most hazard assessment processes which evaluate toxicity only of the final molecular transformation, not of the upstream building blocks (for example benzene or ethylene oxide). This could result in a situation where a preferred option may have a lower water scarcity impact but has much higher toxicity in those upstream basic chemical processes. Other than GWP, the parameters examined are primarily extrinsic to the molecule and may be most relevant to comparisons of lifecycle trade-offs once options are compared for their relative toxicity, as indicated in the OECD Guidance on Identification and Selection of Safer Chemical Alternatives, to support substitution decisions (OECD 2021). This section summarises the key challenges that limit their utility for chemical selection decisions and identifies four opportunities where progress could meaningfully advance their use in practice.

4.1

Key Challenges

Across the four parameters examined, three challenges consistently limit their utility for chemical selection decisions:

Challenge 1: The context-dependence of most climate and water parameters limits their direct applicability for chemical selection. Climate and water resource parameters differ fundamentally from the chemical hazard properties that have historically guided chemical selection in design and substitution contexts. The climate impact and water resource parameters examined in this paper are generally not intrinsic properties of the molecule (or the process required to make them) like physiochemical properties but are instead determined by lifecycle conditions — particularly upstream decisions such as feedstock selection, energy sources, manufacturing processes, and production location. For example, ethylene’s toxicity is exactly the same whether it is made from biomass fermentation or made from

oil in a traditional cracker or an electrified cracker, but its carbon and water footprints could be significantly different in each case. The feedstock and process in this case are not intrinsic to ethylene. However, some parameters, such as GWP for substances with direct radiative forcing potential, are intrinsic chemical properties and can be consistently applied independent of production context. This distinction is critical when considering the utility of these parameters for chemical selection. GWP can be applied consistently across suppliers and value chains without additional data exchange. The other three parameters examined — PCF, water consumption, and scarcityweighted water consumption — characterise production systems (e.g., cradle to gate for manufacturing a chemical) rather than the chemical itself. These parameters can provide valuable information for chemical selection when differences among alternatives reflect meaningful differences in production routes, industrial processes, application performance, or if an alternative is only produced in one region but are not inherent characteristics of the chemical. A central challenge is therefore not the absence of climate and water parameters, but the translation of existing lifecycle information into decision-relevant parameters for selecting between chemical alternatives.

Challenge 2. Methodological transparency and consistency to build trust in disclosed data Even where chemical-level PCF, water consumption, and scarcity-weighted water consumption data are available and disclosed, their utility for chemical selection can be limited by a lack of transparency about how values were calculated and insufficient consistency in the methodological choices underlying them. Two suppliers disclosing PCF or water consumption figures for the same chemical may have applied different system boundaries, functional units, allocation methods, background datasets, and geographic assumptions. As a consequence, values are not directly comparable even though they appear to measure the same thing. A downstream user receiving these figures has no reliable basis for determining whether observed differences reflect genuine differences in environmental performance or differences in methodology. Under these conditions, disclosed data may not be a reliable basis for Chemical A vs. B selection decisions, regardless of how much data is available. Advancing the utility of these parameters for chemical selection therefore requires progress on two fronts: methodological transparency and methodological consistency. First, suppliers should disclose not only reported values but also the key methodological choices underlying them, enabling downstream users to assess comparability and apply appropriate judgment. Second, greater alignment across the sector on the choices that most significantly affect results could reduce methodological variation to the point where disclosed values can be meaningfully compared. Together, greater transparency and consistency would build confidence in disclosed data and create the conditions under which chemical-level climate and water parameters become genuinely actionable for selection decisions. This is an area where OECD guidance, including convening interested parties around common methodological principles and disclosure expectations, could play a meaningful role in accelerating progress.

Challenge 3. Absence of benchmarks Even where comparable data are available, climate and water parameters often lack interpretive frameworks that allow decision makers to determine whether a difference represents a problem or meaningful improvement. A PCF or water consumption value, by itself, does not indicate whether substitution would result in a significant trade-off between options. GWP and scarcity-weighted water consumption are the exceptions. For example, GreenScreen® has established High, Medium, and Low GWP categories based on substance-level GWP values. In addition, the AWARE methodology for scarcity-weighted water consumption uses an interpretative scale of 1-100 to support understanding resulting values. However equivalent interpretive frameworks do not currently exist for most production-dependent climate and standalone water consumption parameters. For example, a lower PCF does not equate to a lower carbon impact chemical compared to another PCF. At this point, the value of the PCF data is in identifying hotspots, opportunities, and leverage points for reducing PCF and improving supplier performance, rather than comparing two options. Developing such benchmarks may be challenging because meaningful comparisons are likely to require generalisable criteria for product/industry sectors, production technology, functional performance, and applications. This is an area where OECD may be able to develop some standardisation to enable greater comparability between options in a chemical selection context.

4.2

Opportunities for Progress

Four areas offer promising near-term opportunities for advancing the utility of climate and water parameters for chemical selection:

Opportunity 1: Greater alignment on methodologies and assumptions to support data transparency and disclosure A clear need and opportunity is improving the consistency and transparency of methods used to calculate and report climate and water parameters at the chemical product level. Harmonised methodological guidance could increase confidence that differences among reported values reflect actual differences in environmental performance rather than differences in the choice of factors/modeling assumptions, etc. used. For PCF, initiatives such as the TfS Product Carbon Footprint Guideline demonstrate the value of sector-specific alignment on system boundaries, allocation approaches, and reporting requirements. Similar efforts could strengthen the usability of water consumption and/or scarcity-weighted water consumption data by establishing chemicalsector-specific guidance built on existing frameworks such as ISO 14046 and relevant lifecycle assessment methodologies. While downstream companies may be looking to reduce the upstream climate and water impacts in the choices of chemicals they use, they are also examining chemistries in terms of their “performance” in reducing downstream carbon emissions such as what could be possible with WBCSD’s Avoided Emissions approach and water consumption impact, for example lower water use during processing or lower heat during use. While the TfS tools are primarily cradle-to-gate, increasing their ability to support chemical selection when comparing downstream environmental 24

performance in addition to upstream impact could provide additional useable data for chemical selection. However, methodological alignment should extend beyond reporting a single value. Transparency regarding system boundaries, assumptions, data sources, and uncertainty is essential for enabling downstream users to understand whether a reported difference is meaningful for a specific chemical selection decision. For example, greater transparency could allow downstream users choosing between chemicals and suppliers to understand whether PCF values reflect more conditions of manufacture, location of manufacturing, or other factors, such as carbon offsets in a process (through for example carbon capture and storage).

Opportunity 2: Using Life Cycle Inventory databases and modeling resources to support comparisons of chemical alternatives Life cycle inventory (LCI) databases such as ecoinvent and GaBi provide life cycle inventory data for different chemicals and processes that can be used to compare PCF, water consumption intensity, and scarcity-weighted water consumption across chemical alternatives under consistent system boundaries, functional units, and methodological assumptions. Database values represent modeled averages for defined production systems, regions, and technologies. For chemical selection decisions, the primary value of LCI databases lies in their ability to support relative comparisons among alternatives using a consistent methodology. Comparing benzene, toluene, and hexane using the same database and impact assessment method, for example, can yield directionally reliable findings about which alternative carries higher or lower water consumption intensity or carbon footprint, even where absolute values carry uncertainty. This relative comparison capability could make LCI databases a practical and accessible screening tool for chemical selection, particularly for downstream users. Other resources that are specific to climate impact, such as FineChem2 (Zhang 2024), could be similarly pursued to support chemical comparisons and decisions, although this is a modeling resource not an inventory database. The key condition for reliable comparisons is methodological consistency: The same database, system boundary, functional unit, and impact assessment method must be applied across all alternatives being compared.

Opportunity 3: Establishing impact ranges and thresholds/benchmarks for PCF and water parameters A third opportunity is developing reference ranges and interpretive frameworks that allow decision makers to understand the significance of PCF and water consumption values when comparing alternatives. Such frameworks would allow more streamlined chemical comparisons particularly for downstream users and small and medium-sized companies that may not have the technical resources for interpretation of LCAs (or even PCFs) of different alternatives. For example, a decision between two chemical alternatives with PCFs of 5.9 and 8.3 kg CO₂e/kg needs a basis for determining whether the difference represents a meaningful improvement or falls within expected variability associated with production systems and methodological uncertainty.

Such frameworks may likely need to be chemical-class- or sector-specific because production pathways and functional requirements vary substantially across chemical applications. Developing credible reference ranges would require data across chemical classes and production routes, as well as agreement across interested parties regarding appropriate approaches for interpretation. Distribution studies by chemical, process, or sector to identify high, medium, or low values could help identify whether an impact trade-off is worth considering in a selection decision or not. Some efforts to support such thresholds or benchmarks have been conducted (Wang et al. 2019; Saling et al. 2002), but alignment/agreement is still needed.

Opportunity 4: Developing rules of thumb using lifecycle thinking and available data A fourth opportunity for consideration is developing practical screening approaches that allow those making chemical selection decisions to incorporate climate and water considerations earlier in the decision process without requiring complete lifecycle assessments or supplier-specific primary data. What aspects of cradle-to-gate accounting have the most significant impact for climate or water impact? For example, regional location likely has the greatest water scarcity impact while energy production may have the greatest climate impact. Understanding these would help to better qualify the extent to which cradle-to-gate impacts may influence a design or downstream selection choice. Such understanding could help simplify rules of thumb for chemical comparisons. They could function similarly to structural alerts in chemical hazard assessment by identifying potential climate and water hotspots based on characteristics of a feedstock, chemical, production route, or application context that are associated with potentially higher environmental impacts and warrant further evaluation. A starting point may be the question of when intrinsic climate and water impacts should be considered in chemical design and substitution decisions. In some cases, where there are significant differences in toxicity between alternatives, such impacts may be less relevant considerations when comparing options than when two options have only small differences in toxicity. While there are generally few “intrinsic” features of chemicals, such as bond energy, that could impact climate or water, there are some aspects of chemical feedstock, process steps, or chemistry type that may be generalisable and comparable. OECD could engage in developing sets of generalisable “characterisation factors” for different chemicals, processes, or feedstocks. Illustrative examples include: Climate impact-related screening considerations •

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Feedstock origin: Bio-based/renewable carbon non-fossil-based feedstocks may have lower cradle-to-gate carbon footprints than fossil-based equivalents in some applications. Many companies equate bio-renewables produced from sustainably harvested biomass as lower-carbon in their product offerings. However, this assumption may not always be the case (Montazeri et al. 2016). Production energy requirements and electricity sources: Production routes requiring hightemperature processing or energy-intensive separations likely have higher carbon footprints than lower-energy alternatives, such as fermentation, particularly where fossilbased energy/electricity sources are used. The “exergy” of molecules (the maximum useful

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work that can be obtained as that molecule interacts with its surrounding reference environment to reach chemical and thermodynamic equilibrium) is an intrinsic characteristic that may provide some indication of climate impact (Dincer and Rosen 2021). Production complexity: Multi-step synthesis or production processes often require greater energy inputs and thus greater carbon emissions than simpler routes. This assumption has generally been accepted in pharmaceutical API production where reduction of steps reduces both waste and energy (Parvatker et al. 2021).

Water impact-related screening considerations •

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Production process characteristics: Production routes involving extensive aqueous processing or steam reforming, would generally have higher water consumption relative to alternatives using less water-intensive processing methods or steam cracking. Production geography: Chemicals produced in water-scarce regions carry higher water resource impact than chemically identical products from water-abundant regions — making production location a useful first-pass indicator of water stress risk even before consulting quantitative data.

5. Questions for Consideration The following questions are offered to stimulate thinking in advance of the 1-2, October 2026 workshop. As you reflect on the content of this discussion paper, please consider: 1.

What experience have you had or observed with the use of climate and/or water parameters in informing chemical selection decisions (either design or substitution)? At what level (chemical, product, facility, or corporate) are these parameters primarily being used and where do you see opportunities for enhancing their use in chemical design and substitution decisions?

What approaches are needed to account for the differences between intrinsic chemical properties (such as GWP) and production- or context-dependent parameters (such as PCF, scarcity-weighted water consumption, water consumption), when making chemical selection or substitution decisions? What implications do these differences have for how such parameters should be interpreted or communicated?

Which of the four parameters examined (GWP, Product Carbon Footprint, Water Consumption Intensity, or Scarcity-Weighted Water Consumption) appears most useful for chemical selection decisions and what are the most significant barriers to broader use? Are there additional parameters – such as Avoided Emissions – that need further consideration?

What characteristics are most important for achieving greater methodological alignment among climate and water parameters used in chemical selection? To what extent is consistency within an organisation sufficient, and where is cross-company comparability needed to support decision-making, disclosure or policy objectives?

What is the feasibility of creating simple benchmarks for water and climate impact that would more effectively enable downstream users and small and medium sized companies with limited technical resources to compare water or climate trade-offs between options in chemical selection processes?

The paper identifies four opportunities for advancing the use of climate and water parameters for chemical selection: (1) greater methodological alignment to support disclosure; (2) use of LCI databases and related modeling resources; (3) development of interpretive benchmarks or ranges; and (4) practical rules of thumb grounded in lifecycle thinking. Which of these opportunities seem most promising? What role could the OECD play in advancing them?

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Background paper: Integrating Carbon and Water Metrics into Chemical Selection and Substitution