The functional unit (FU) is defined as the quantification of the function(s) of the process under study and its primary purpose is to provide a reference related to input and output data (International Organization for Standardization 14044 2007). For comparative studies, the choice of the functional unit becomes critical and can have an important impact on the results obtained. For this reason, several works have performed their assessments by using more than one functional unit, in order to observe how the choice of the FU impacts the results (Batlle-Bayer et al. 2019; Haas, Wetterich, and Geier 2000; Kamali, Hewage, and Sadiq 2019; Prasad et al. 2020; Sonesson et al. 2019).

The functional unit defines the qualitative characteristics and calculates the quantitative aspects of the function, which usually entails responding to the following 5 questions: i) what?; ii) how much?; iii) for how long/how many times?; iv) where?; and v) how well? For instance, in the case of a comparative analysis of an outdoor paint, the functional unit can be defined as: the complete coverage of 1 m2 primed outdoor wall for 10 years in France at 99.9 % opacity. It is relevant to mention that the FU must always include a specific function and in some cases is not linked to a physical quantity, such as 1 L, 1 kg or 1 MJ (Hauschild, M.Z., Rosenbaum, R.K. and Olsen 2018; ILCD 2010).

After the FU is defined, the reference flows can be determined. The reference flows are the number of products that are needed to perform the functional unit.

When some product system is analyzed, a multifunctional process can appear. In order to solve multifunctionality, ISO 14044 proposed a hierarchy of solutions (Figure 4.1.6). According to ISO 14044, the allocation must be avoided by:

• dividing the unit process to be allocated into two or more sub-process and collecting input and output related to those subprocesses;
• expanding the product system to include the additional functions related to the co-products, considering the requirements for reuse and recycling.

If the allocation is not possible to be avoided, inputs and outputs of the system should be partitioned between its different products or functions in a way that reflects the underlying physical relationships between them. Finally, when physical relationship alone cannot be established, the inputs must be allocated between the products and functions in a way that reflects other relationships between them; therefore, inputs and outputs might be allocated between co-products in an economic proportion of the products, for instance (International Organization for Standardization 14044 2007)(International Organization for Standardization 14044 2007).

Additional examples of how to define the functional unit and reference flows can be found in more 4.1.2.