I Introducing Life Cycle Management
This part defines what life cycle management is within the realm of sustainability and what are the opportunities and challenges to implement it into business practice.
Introduction: Life Cycle Management
Abstract Environmental management practices in most business organizations from the early 1990s were characterized by their focus on internal operations, cost savings, and compliance and risk management approaches. Such a traditional view of sustainability management, however, is not sufficient to address current business challenges – to create competitive advantages while contributing to sustainable development. There is a need for a life cycle management practice that expands the scope through including the complete value chain and that links sustainability management and performance of organizations and products to business value and value creation. Being an extremely powerful concept and process, life cycle management can ensure businesses deliver real-world improvements for all stakeholders. In the long term, it can also help to transform the market by making sustainability a differentiator just as quality is today.
Keywords Business organization • Life cycle assessment • Life cycle management
• Life cycle sustainability assessment • Life cycle sustainability management • Sustainability • Value creation
The Business Context
Paradigm shifts in the world of international business and economics and a shift from a view that focuses purely on profit to one that takes a more balanced and long-term approach to also address environmental, governance, and social factors have been discussed for many years now. There is a growing understanding that businesses cannot only focus on short-term profitability and internal factors such as productivity improvements to be successful in the long run. On the other side, however, for many business sectors, competition is now truly global and fiercer than ever, making it necessary to have the focus on profitable growth and to being able to react very flexible to changing market requirements. The ancient quote “Change is the only constant in life” (generally attributed to Heraclitus of Ephesus, a Greek philosopher, who lived from 535 BC to 475 BC) is today more valid than ever.
How can this fast-paced business reality that inevitably aims at profitability, short and long-term, be married with the need to balance long-term financial, environmental, governance, and social impacts and benefits?
The traditional view in environmental management and later in sustainability management can be characterized by:
• Concentrating on internal operations (“inside the factory walls”)
• Targeting cost savings through efficiency improvements and related reductions in material and energy use as well as waste generation
• Assurance of compliance to regulatory and other explicitly stated requirements (international standards, customer requests, etc.)
• Risk management, mainly to avoid liability issues and reputational damage
This perspective, which was shared by most governments and other stakeholders, was prevalent in most business organizations from the early 1990s and well into the new millennium and is still the standard in many organizations today. It is often represented by organizations, where the sustainability function is a sub-function of Environment, Health, and Safety (EHS).
It is obvious that this internally focused cost savings, compliance, and risk management approach can only be a basis, but will never be sufficient to address the aforementioned business challenges and align with the primary profitability goals of any business organization in a market economy.