How to Implement Life Cycle Management in Business?
Eskinder Demisse Gemechu, Guido Sonnemann, Arne Remmen, Jeppe Frydendal, and Allan Astrup Jensen
Abstract This chapter discusses how business can implement life cycle sustainability assessment into their management strategies. Life cycle management is a management approach that provides business a systematic way of managing their sustainability issues. The PDCA (Plan, Do, Check and Act) cycle is one of the quality management tools that can be used by companies to implement life cycle management initiatives in order to improve their sustainability performance. The relevance of the PDCA cycle is discussed to ensure a continuous performance improvement by setting and implementing a well-defined plan, checking whether the ambition goals are achieved or any adjustment actions are needed to continue the evaluation process.
Keywords Life cycle assessment • Life cycle management • Life cycle sustainability assessment • PDCA cycle (plan, do, check, act)
Global companies recently have shown an increasing interest in being engaged in sustainability initiatives and integrating it to their business management strategies through broadening their accountability beyond economic performance to include social and environmental aspects (Labuschagne et al. 2005). There are a number of driving forces behind their engagement: government regulation and intervention, stakeholder pressures, economic profit, globalization, business concern for society and the environment, technological advancement, social activism and so on (Estein and Buhovac 2010). The direct intervention of governments at regional, national or international level is one of the drivers. Governments are highly encouraging companies to improve their environmental and social performance while maintaining their economic benefits (Simpson et al. 2004). A number of legislation and regulatory initiatives have been established to promote technological advancement (Carraro and Galeotti 1997).
The development of methodological tools, databases, guidelines and procedures are being supported by governments so as to promote sustainability practices in businesses that can contribute to the transition towards a more sustainable economy. Some examples from the European Union (EU) are the EC directive on disclosure of non-financial and diversity information by large companies, which requires companies with more than 500 employees to include information about their environmental and social performance in their annual reports (EC 2014), the EC's strategy on corporate social responsibility (CSR), which encourages companies to have in place a system that integrates consumer concerns, environmental, ethical human rights and other social aspects into their business operations and core strategy with close collaboration with their partners (EC 2011). A number of national governments have also established policy initiatives to promote sustainability practice by businesses.
Besides governments' interventions, there are also other driving factors for companies'commitments to sustainability initiatives. One is the change in consumers' behavior towards sustainable consumption patterns. Consumers have become more concerned about the environmental pressure associated with products for their consumptions. They are showing commitments to buy products with relatively less impacts and they would like to be linked with companies that are environmentally and socially responsible (Perrini et al. 2010; Cherian and Jacob 2012). Companies that place sustainability initiatives into their business strategies are attracting more consumers and at the end making more profits. This phenomenon could stimulate and may lead companies that are not active in sustainability practice to be engaged so as to improve their competitiveness (Ginsburg and Bloom 2004; Lacy et al. 2010). Corporate sustainability reporting (CSR) initiatives are also serving as an internal and external driver for companies' sustainability initiatives. They encourage employees and stakeholders to be engaged in sustainable business practices at the same time they could also increase competition and threats within and across industries (Porter and Kramer 2006). Economic globalization, which is characterized by its global, liberal and open economy (Dinda 2004), technological advancement that reduces material intensity and pollutions, social activism that creates awareness about the environmental and social pressure and force governments to set a regulation (Ginsburg and Bloom 2004) are also among the drivers that brought sustainability innovation into business context.
Sustainability is becoming an agenda for most business nowadays, but how to implement and integrate it with other strategies remains challenging. Life cycle management (LCM) is an approach that can be used by business with the aim to operationalize their sustainability initiatives: to have better environmental, economic and social performance simultaneously. This chapter, therefore, discusses the way how business can implement LCM into their management strategies.