It has been said that the purpose of art is to reveal those things that society has been unwilling to reveal, that which we are unwilling to address, the experiences and insights we have neglected, whatever is unconscious or not fully conscious to us or only known in a particular way. In other words, when art moves us, it reveals a truth that was previously concealed and allows us to view the world in a new way.
As with the various forms of artistic expression, environmental sustainability management is a discipline that compels us to reveal certain “truths” that remain concealed beneath the surface of our immediate experience or conventional wisdom. Arguably, the principal technique for such revelations in environmental sustainability is Life Cycle Assessment (LCA), which examines a good or a service (together known as “products” according to the ISO 14044 definition) throughout its life cycle. Within that life cycle, LCA looks at the extraction and transportation of raw materials, the manufacturing of the product, the use of that product by a consumer or business and finally the end of that product’s life—its reuse, recycling or disposal.
If we enact improvements based on the discoveries revealed through LCA, the benefits for humanity are immediately obvious. They include reducing harmful emissions, using less energy or materials and producing less waste, among many other benefits. Of course, as with the arts, the interpretation of LCA results can vary, depending on one’s approach or point of reference. From a business perspective, this flexibility in interpretation is a tricky challenge. However, one thing is for sure—conducting LCAs has clear business advantages. Let’s define those business benefits before we elaborate on the art of LCA.
The 7 Business Benefits of LCA
There are seven business benefits of conducting a Life Cycle Assessment for one’s products.
Let’s examine each of these in greater detail.
1. Get the Bigger Picture
LCA allows a business to get an overview of a product in a way that it has never had before. For example, if you are assessing the life cycle of a tricycle that your business is manufacturing, you would look at the environmental impacts of all the materials, the rubber tires, the plastic, the foam in the seat, the metal in the frame, etc., and you would assess the emissions and other environmental exchanges associated with extracting the raw materials, processing or forming those materials into useful parts, assembling the tricycle, transporting the finished products to stores and then their use by a child, perhaps their reuse by additional children, maybe the recycling of the rubber in the tires or the metal, before the ultimate disposal of all of the material components of the tricycle.
Stepping back and looking at this entire process allows companies to clearly see their product in a whole new way. A business can begin to identify how different factors within the life cycle affect its environmental sustainability, in the form of the potential impacts the materials and processes have on the environment. While it is impossible to be entirely precise when predicting the actual environmental impacts for a particular product, the analysis of such potential impacts gives designers a completely new perspective on the engineering of a product. Any new perspective can shine light on a whole range of factors through which improvement could occur, and not just in the environmental sustainability of the product.
2. Discover Hotspots
After you’ve conducted an LCA of the tricycle, let’s say you discover that the material with the highest potential environmental impact is the metal used for the frame. As a long-term goal, you may want to tackle this hotspot. However, trying to determine how to reduce the environmental impact of your tricycle is complicated and challenging. But with LCA, you have determined the potential impacts, verified whether they represent actual impacts and are now standing on solid ground—you have a science-based foundation to start exploring how to tackle your largest impacts.
With the data you get from your LCA, you’ll know details. For example, the hotspot discovered in your LCA is based on average or generic industry data used to represent the tricycle frame material. Upon further investigation, you may learn that the current frame material that your supplier provides takes a comparatively high amount of energy to produce and contains comparatively low recycled content. So, using software and data, you can begin to calculate alternatives, comparing your frame material to other materials using functional equivalence, which factors in things like technical performance, weight, longevity and other relevant aspects.
Life Cycle Assessment allows you to identify potential hotspots, verify or falsify them for your own supply chain as much as possible and then compare the advantages and disadvantages of each material in an equitable manner. Maybe you will reach your ideal outcome through some combination of two or more materials. While LCA does not re-design the product for you, it acts as a compass that leads you to better solutions as you tackle your sustainability hotspots.
3. Identify Low-Hanging Fruits
An LCA will also quickly tell you where you can find low-hanging fruit. For example, you might find that switching from virgin foam to recycled foam for the seat cushion provides an immediate environmental (and cost) improvement. By switching materials, you’ve tackled an easy, low-hanging fruit.
Switching to renewable electricity at your production facility, either through certified contractual agreements or by producing your own energy on-site, may allow you to tackle another low-hanging sustainability fruit—you will have immediately reduced the harmful emissions and carbon intensity of your energy consumption. LCA allows you to see and make these changes quickly, speeding up your ability to justify the necessary investments to your managers and then show your stakeholders your progress in efforts to become more sustainable or to move closer to an environmental target that you’ve set, such as becoming carbon neutral by 2030.
4. Innovate through Information
One remarkable business advantage of conducting an LCA of your tricycle is likely to be the insights you gain for greater innovation. Let’s say, through your LCA, you reveal the environmental footprint of the rubber in your tires. You may discover that the specific type of rubber you use for the tires contributes to soil toxicity and increases particle matter emissions into the air while being used. To tackle this problem, you reach out to your suppliers. They don’t have the resources to develop a solution on their own. So, you work with them on R&D and develop a joint patent for a non-toxic rubber additive that also reduces particle matter emissions. You and your supplier may then sell this additive together while advertising the environmental benefits of your new tires as an exclusive feature of your tricycle.
Reaching new markets can become the natural outcome of your LCA activities. If, for example, you switch to a lightweight design for the tricycle’s frame, maybe now parents, who are more eco-conscious in their buying decisions, choose your product over competition, increasing market share.
5. Differentiate to Improve Your Brand
Now, through innovation resulting from information you learned in your Life Cycle Assessment, you can begin to communicate the sustainable materials, processes and other activities that set your business or product apart from your competition. And you’ll have the accurate data to support your claims, be it in the form of a critically reviewed LCA study or a verified Environmental Product Declaration (EPD). With an independently reviewed LCA, you know that such marketing claims are based on science and don’t mislead stakeholders. That is, you can rest assured that with an LCA, you can lower the risk that your sustainability claims will ever be perceived as greenwashing.
Independent critical review or verification are indeed crucial to make sure LCA studies are not based on assumptions or data that provides an unfair advantage to any of the assessed products. Independent critical reviews are mandatory for all LCA studies (under ISO 14044) that are intended to support conclusions about the environmental superiority of one product over a competing product. Your marketing team can then use the LCA results with confidence to differentiate your business or product from competitors that fail to progress in environmental sustainability or are not as committed or transparent in their efforts.
6. Increase Efficiency
In many cases, companies are already highly efficient in their manufacturing and operational processes. However, LCA can shine additional light onto areas where you can improve further. As such, managing the sustainability of a product or service is analogous to a continuous improvement process rather than a static target that you reach at some point.
Along this journey, the LCA may suggest very simple changes, such as reducing the tricycle weight and using less material, which translates into reducing production energy and emissions for every tricycle sold, reducing your costs. You can become more efficient in your manufacturing or along your value chain, thereby saving more material, electricity, time, etc.
But let’s say that through examining the entire lifecycle of your tricycle, you discover that, at the end of the life of the tricycle, most tricycles get thrown in landfills. To reduce this unnecessary waste, you decide to set up a take-back system. To this end, you engrave a simple message into the frame of your tricycles that states something like, “All parts of this tricycle can be recycled. If you return your used tricycle to ACME Tricycles, you’ll receive a voucher toward the purchase of a children’s bicycle.” Now, if you have correctly planned your take-back system to refurbish or properly recycle that used tricycle, you will not only have received a low-cost source for materials and made your product more circular, you will have potentially increased the sales of your children’s bicycles as well. In addition, LCA can help show how the benefits of a take-back system outweigh the increased emissions associated with shipping used tricycles back to the location for refurbishment or recycling. Or it may let you calculate the average shipping distance for which the GHG savings are at least a certain percentage lower than for landfilling it, hence assisting you to select the right number of and the correct locations for take-back centers.
7. Measure and Mitigate Business Risks
Those of us working in environmental sustainability know about both current and up-coming environmental regulations that could pose challenges for companies that do not plan and take action to reduce environmental risk.
The European Union is moving full force into the European Green Deal, a broad set of policies that will have a profound impact not only on all of Europe, but also the entire world. Countries within the EU and, importantly, countries that import products into the EU, like the US and Japan, are likely to face carbon pricing. The ETS Emissions Trading Scheme is one example. If you are below your carbon threshold, you can sell your carbon permits. If you are above the threshold, you’ll have to buy carbon permits. So clearly, when facing these kinds of regulations, companies have the opportunity to reduce costs long-term.
The European Commission has included in the European Green Deal “a carbon border adjustment mechanism, for selected sectors, to reduce the risk of carbon leakage.” That means that pricing for imported goods will reflect the carbon impact those goods have on the environment. Foreign companies that wish to export to the EU and do not adhere to the EU’s high sustainability standards, will probably end up paying additional fees, making their products less competitive.
There is also the Product Environmental Footprint (PEF) initiative that may end up as a regulation in the coming years. Its purpose is to develop a single green market in which all companies play by the same rules when making environmental claims. In the US, such regulations are surfacing more and more as well, such as with the California Green New Deal and the LEED rating system, which labels buildings according to their level of sustainability. Conducting an LCA for your products will help you prepare to avoid and mitigate risks associated with regulation.
Now that you have an overview of the business benefits of LCA, let’s return to the art of LCA.
From Compliance to Performance
Hopefully you can begin to see how LCA can help your company move beyond adherence to regulatory requirements. With LCA, you can actually shape your company’s future. We can see moving from compliance to performance as an art. Ideally, this effort would be driven from the top, but in many cases, it is driven from the bottom by people who are committed to making a difference in their organizations. With limited resources and personnel, companies have to figure out how to transition to performance. There are different ways to achieve this transition, depending on your position within your company or your lack of money and people. The above benefits provide the arguments to promote LCA within your own role. But in more general terms, moving beyond compliance frees up time for people to innovate, for leadership to improve overall business performance and achieve higher quality outcomes.
LCA can help because it gives you a case study, with science-based, data-driven evidence behind it, that you can use to persuade company stakeholders to move in the direction of performance. The first step toward the art of LCA may be to conduct an LCA on one of your products as a trial or test, to show what is possible with sustainability. If you don’t have time to work on this on your own, you may have to outsource such activities to a consultancy like Sphera. With a consultancy’s help, you can identify the business cases and the economic and brand advantages of sustainability, having the LCA data to back up your claims.
We also recommend that you find people within your organization who believe in what you are trying to do and who can support you in your efforts to help the company make the transition from compliance to performance. Together you can share and promote LCA until your executive management gets the message and prioritizes sustainability.
Despite COVID-19, the largest, most successful companies are not slowing down in their sustainability initiatives. Another strong, evidence-based argument for why to conduct LCAs is to make sure that your company doesn’t fall behind the competition. Environmental compliance is simply the license to operate. But we know that those companies that are most active (at the performance level) in their sustainability efforts outperform those companies that only remain compliant (see “ESG funds outperform wider market over 10 years”).
One of the arts of LCA is that you can approach the topic of sustainability from many different angles. So, let’s look at LCA from another angle as well. We know that environmental sustainability is complicated. LCA gives you a holistic approach to understanding the most complicated aspects of sustainability. Seeing the full picture first allows you to decide what direction to take in your sustainability efforts.
Beyond handling complexity in a systems-thinking way, LCA gives you a scientific, evidence-based way to compare the potential environmental impacts of products, operations and supply chains. It’s like going to the doctor, learning the full truth about your condition and being given a set of options. Once you know your options, you can decide what to do and what pieces of information you should focus on.
Conducting an LCA gives you more information, information critical to understanding where you stand. But ultimately, what you are doing to inform change is comparing two or more options. As with the tricycle example, you have to determine, through industry-based data relevant to your product, whether you should use the one or the other material for the tricycle frame. And you may have more options than you think. LCA opens the door to those additional choices by providing the data to assess a wide variety of alternatives.
Many people believe comparability only means a comparison between materials or between single types of products. But you can also compare your current situation with a future design, one geographical location with another location or one supply chain with another.
The art and beauty of LCA is that it isn’t going to tell you what to do. LCA is a comparative tool, but you still need to make the decision in the end about what question(s) you need answers for. It gives you a way, a path to making more informed decisions. The data is there to support your strategic moves. In business, you wouldn’t make a decision without having the data. So too with sustainability-related information. There is no single, absolute LCA, such as “the sustainability,” rather sustainability is often relative—you can rest assured that relatively speaking, you made the right choice.
The Art of LCA Innovation
Innovative new technologies, such as turning emissions into a product, can have a direct influence on your future business outcomes. You won’t be able to foresee the future, but by ensuring LCA methodology is in place, you will be in a good position to compare your current activities with future activities that incorporate new technologies. So, the art of LCA continues—nothing can stop it. It is an ever-evolving approach that remains flexible to innovative changes while retaining its ability to include complexity. Revolutionary new technologies, such as Carbon Caption and Utilization, are necessary if we are to achieve the goals of the Paris Agreement.
Life Cycle Thinking and Circularity
Moving away from the predominant, linear, take-make-dispose approach to products or systems, with LCA you move toward a more holistic overview that allows you to understand the entirety of the life cycle. While this is most frequently discussed under the heading of ‘circularity’ these days, LCA can and should be part of validating new, circular products or services to help identify and mitigate unintended consequences. While single-attribute claims like “made with 100% recycled content” are easy for consumers to understand, they do not guarantee that the overall environmental footprint will be reduced compared to products with lower or no recycled content (see this study).
Some companies still assess the sustainability of their products or processes only after the product is produced or a process has been implemented. Of course, it is possible to do that. But why not use LCA prospectively, making better decisions for the future while transitioning your company from compliance to performance? Getting the ball rolling may be as easy as reaching out to others within your organization to team up and make something happen. Together you can conduct an LCA on a single product as an example to show how the data doesn’t lie, giving proof for C-level management and other stakeholders that taking action on environmental sustainability makes solid business sense.
With more demand on companies to provide additional information about the environmental footprints of their products and operations, statements like “this is a green product” or “this is a natural product,” without industry-specific, science-based evidence to back up such claims, pose a real risk for companies. The public, regulatory authorities and client companies are now, more than ever before, asking for proof and validation (see FTC Green Guides and the Directive 2005/29/EC on Unfair Commercial Practices (UCPD)). They are becoming more environmentally savvy.
Life Cycle Assessment is a key method for both initiating data-driven decision making on the environment and setting on-going methodological activities that drive your company from compliance to performance. The art of LCA is finding the path that works for you, in your particular situation and with your current resources and personnel. Knowing where you are, where you want to be and what to tackle first, all play into the art of LCA.