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.
Get the Bigger Picture
LCA allows a business to get an overview of a process or 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 gears, etc., and you would assess the emissions and other impacts associated with extracting the raw materials for those parts, 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 reuse of 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 sustainability, the impacts the materials and processes have on the environment. It is a kind of analysis that 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.
After you’ve conducted an LCA of the tricycle, let’s say you discover that the material that has the highest environmental impact is the metal used for the frame. As a long-term goal, you want to tackle this high environmental impacting material. Trying to determine how to reduce the environmental impact of your tricycle is complicated and challenging. But now with LCA, you are standing on solid ground—you have a science-based foundation to start exploring how to tackle your largest impact.
With the data you get from your LCA, you’ll know details. For example, you may learn that the current steel frame that your supplier provides takes an enormous amount of energy to produce. So, using software or additional data that Sphera provides, you can begin to calculate alternatives, comparing steel to an aluminum alternative. Steel is more robust, so it is likely to last longer. But it is also heavier, so that has an impact on the emissions released into the atmosphere when the tricycles are transported. Then again, by weight, aluminum requires more electricity to produce than steel does. But steel may be easier to repair and maintain.
Life Cycle Assessment allows you to see the advantages and disadvantages of each material. Maybe, you will reach your ideal outcome through the art of LCA, even through some combination of the two materials. An LCA acts as a guide to lead you to smart solutions as you tackle your sustainability hotspots.
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.
As another example, maybe by switching to renewable electricity at your production facility, you will have tackled another low-hanging sustainability fruit—you will have immediately reduced the harmful emissions induced by your facility. LCA allows you to see and make these changes quickly, speeding your ability to show your stakeholders progress in your efforts to become more sustainable or to move closer to an environmental target that you’ve set, such as becoming carbon neutral by 2030.
Innovate to Improve Your Brand
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 leaches off into the ground when the tricycle is ridden, thereby contributing soil toxicity and increasing particle matter into the air. To tackle this problem, you reach out to your supplier. They don’t have the resources on their own to develop a solution. So, you work with them on R&D and develop a joint patent for a non-toxic rubber additive that reduces leaching. You and your supplier can then sell this additive together while advertising the environmental benefits of your new tires. We know from experience with clients that this kind of innovation happens more frequently than you might imagine, all due to assessing the lifecycle of products.
Reaching new markets can becomes the natural outcome of your LCA activities. If, for example, you switch to a lightweight design for the tricycle’s frame, resulting in a lighter frame, maybe children who are even younger than your current target users can now handle the tricycle. The result could be that you can now market to even younger children, allowing you to sell more tricycles, while reducing emissions and waste in the process.
Differentiate Your Products and Business from the Competition
Now, through innovation resulting from information you learned in your Life Cycle Assessment, you can begin to communicate the sustainable materials, processes or other activities that set your business or product apart from your competition. And you’ll have the accurate data to support your claims if necessary. With LCA, you know that such marketing claims are based on science and do not mislead stakeholders. That is, you can rest assured that with an LCA, you can avoid the risks associated with greenwashing.
If necessary, you can even have your results externally verified, supporting environmental claims through widely recognized external institutions, such as by making Environmental Product Declarations or reporting your progress toward achieving a Science Based Target. Your marketing team can then use all of these verified activities to differentiate your business or product from competitors that fail to progress in environmental sustainability or are not as serious or transparent in their efforts.
Most of the time, companies are already highly efficient in their manufacturing and operational processes. However, LCA can shine additional light onto areas where you can improve.
So, the LCA may suggest very simple changes, such as making tricycle weigh less and use 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, 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 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.
Measure and Mitigate Risk
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 for 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 price-competitive.
There is also the Product Environmental Footprint (PEF) initiative that may end up as a regulation in the coming years. It’s 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 and processes will help you prepare to avoid and mitigate risks associated with regulation. Now that you have a thorough 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 help shape your company’s future. We can see moving from compliance to performance as an art. With limited resources and personnel, companies have to figure out how to transition to performance. There is usually a way to achieve this transition, regardless of your position within your company or your lack of money and people. 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 an example, 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 in 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. With their help, you can identify clear business cases, clear 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 the responsibilities of carrying out an 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. 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 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 information you should or shouldn’t share with others.
Conducting an LCA gives you more information, information critical to understanding where you stand. But ultimately, what you are doing 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. Just maybe, you should use a heavy-duty frame. In other words, you may have more options than you think. LCA opens the door to those additional choices.
Many people believe comparability only means a comparison between materials. Of course, you can make comparisons within a single product. 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. The LCA is a comparative tool, but you still need to make the decision in the end. It gives you a way, a path and art of 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 took the right step.
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 forsee 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. LCA is even able to assess technologies that hardly exist yet, if you apply it correct and use it responsibly.
Life Cycle Thinking
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.
Some companies still assess the sustainability of their products or processes only after the product is produced or the 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 to c-level management and other stakeholders that taking action on environmental sustainability makes business sense.
With more demand on companies to provide more information about the environmental status 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. They are becoming more environmentally savvy. Life Cycle Assessment is a key method for both initiating data-driven decision making on the environment and returning 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 resources and personnel. Knowing where you are and where you want to be and what to tackle first all play into the art of LCA.