Plan

The PLAN step identifies the current existing level of sustainability ambition of the companies and ensures whether they have the required resources. This step generally covers the following areas: police setting (determining the level of business's ambitions), organize (get engagement and participation), survey and research (identify key environmental and social impacts and opportunities and decide what the business wants to be and where it would like to go) and finally goal setting (select an area/s where the efforts will be directed, determine goals and make an action plan).

2.1.1 Policy Setting

To consider LCM among the key success factors through all levels of any organization, it needs to be a part of the organization's policy. Therefore, it should possess the basic characteristics of an organization's policies. These are, for example: the policy has to be well known and also well understood by all stakeholders that are directly or indirectly affected from its implementation, it should be stable and not subjected to change frequently, it should be consistent with the company's organizational structure at all levels, it has to be formulated within the context of company's objectives, and more importantly, it has to be goal-based and visionary with a long-range focus, while also being realistic and concrete, grounded by its ambition level. Setting goals according to the levels of ambition ensures conformity between policy and actions. There are different levels of sustainability ambitions, just to cite a few (Table 4.2):

• Internal readiness and commitment to continuous sustainability improvements. This level signifies awareness that environmental and social improvements can be made using management frameworks such as ISO 9001 ((ISO 2008), ISO 14001(ISO 2004) and/or corporate social responsibility (CSR) (McWilliams and Siegel 2001), and that a commitment to improvements of product performance is the first step towards LCM.

• Life cycle sustainability performance improvement of products. This includes a safe and resource efficient process, product or system that provide better service to customers while reducing environmental and social impacts. This can be addressed through broadening companies' system boundaries beyond their manufacturing level, by including the full supply chain from raw materials selection and acquisition, use of product, distribution and end-of-life – based on a screening of the product's performance.

• Reduce climate change impact and be energy efficient by using low-carbon and renewable energy sources.

• Maximize the social benefits by engaging a wide range of stakeholders and also respect the rights of the social community whom the company works with.

• Create competitive advantages and maximize economic benefits from promoting products with better environmental and social profile.

Establishing such ambition levels can help an organization to understand where to begin the sustainability initiative. Depending on its past sustainability practices and current challenges, an organization can begin with a certain level of ambitions and goes to relatively high level once it acquires knowledge and familiarity on how to make its plan into action successfully.

Table 4.2 Sustainability ambitions – examples from global leading companies

Company

Sustainability ambitions

SONY (2015)

Curbing climate change – zero emissions of greenhouse gases by 2050

Conserving resources – maximize the use of recycled plastic and other materials

Controlling chemical substances – strict control over chemicals in raw materials and parts worldwide

Promoting biodiversity – protect biodiversity, both through its business activities and through conservation

BASF (2015)

Improve the energy efficiency in production process by 35 %

Reduce greenhouse gas emissions per metric ton sales product by 40 %

Reduce the emissions of organic substances and nitrogen to water by 80 % and heavy metals by 60 %

Reduce the withdrawal of drinking water for production by 50 %

100 % introduction of sustainable water management at production sites in water stress areas

Reduce emissions of air pollutant by 80 %

Safety, security and healthy

Reduce transportation accidents during shipments

Minimize workers lost-time injuries

Assess the risk of products sold by BASF worldwide

3M (2014)

Manage their environmental footprint

Provide solutions that address both environmental and social challenges for the consumers and society

Assure the safety of their product for the intended use through assessing their entire life cycle

Appropriate management of any 3M health and safety issues that may impact customers, neighbors and the public

Maintain a safe and healthy workplace

Satisfy customers through providing superior quality and value

Support the local community where 3M employees live and work

Provide an attractive return for our investors

In whatsoever ambition level is set in the sustainability policy, it should provide a clearly defined and well-grounded strategies and objectives that can ensure environmental, social and economic improvements in all relevant stages of a product profile. The product profile should include impact assessment throughout the product's life cycle, from cradle to grave, taking into account interests from different stakeholders. The product profile should also answer questions such as: Where is the position of the organization compared to its important competitors? Whether the organization has relevant supply chain information on input parts and raw materials? Whether the product provides the demanded environmental quality and social concerns by the consumers and other interested parties? Whether the organization has the necessary resources to achieve its goals?

When the policy has been set, the next steps are to organize the effort and set up specific targets.

2.1.2 Establish a Team for Life Cycle Management Initiatives

LCM has to be part of an organization management processes in which it involves the participation of different parts of the organization and also different actors in the product chain when relevant. LCM initiative can be organized in a coordination group or team. The responsibility within a coordination group should lie with a team leader, who is responsible for ensuring that the group functions, meetings are arranged, minutes are taken, etc. The members of the coordination group should be selected so that all relevant departments or functions are represented, including top management, product development, production, product distribution, sales, marketing, and purchasing.

One possible option could be establishing a cross-functional team. It is a team made up of individuals from different departments within an organization. They should be not only environmental expertise, but from different backgrounds with different expertise. Cross-functional team for the implementation of LCM could be composed of members from relevant departments such as product development, production and distribution, sustainability and environment, finance and procurement, etc. Some team members may be engaged in full-time bases in order to secure continuous improvement of the environmental performance until the targets are achieved and they may return to their routine roles once the time frame is over. Other members could act as an ad hoc team in order to implement specific tasks, which could be, for example, a supplier evaluation scheme with the involvement of people from purchasing, product development and marketing. For smallor medium-sized (SMEs) organizations a single but permanent cross-functional team might be the best solution, but it depends on the specific structure and culture of the organization. Whether the cross-functional team last long or short, its members should maintain a strong link to their major responsibilities in their main department as well as maintain good relations with their managers. Although it is important to establish a cross-functional team in order to successfully implement LCM into business practice, it faces some challenges such as priority due to several responsibilities, lack of motivation due to additional tasks and others.

The establishment of a cross-functional team is a key to place LCM into action. A number of factors are crucial to successful cross-functional teams (McDonough III 2000). Setting clear and well-defined goals offer several benefits to the team members. They provide a common frame of reference, which at the end results in facilitating the team cooperation and organize the tasks. Empowerment in cross-functional team is another success factor. Allowing individual team members a decision-making responsibility help them to be more committed to the project and strive to meet the target goals. It also increases their satisfaction of being a part of the team members. Supports from senior management, such as demonstrating team commitments, providing help to overcome challenges and encouraging team members can also have a direct effect on the performance of the cross-functional team. Another key success factor is creating cross-functional team of interested people (McDonough III 2000).

Experience with LCM and other management systems shows the value of having interested, enthusiastic people at all levels of the organization.

In general, successful implementation of LCM framework in an organization requires a proper allocation of human and other relevant resources, assignment of responsibilities and accountabilities based on each team member's role for the different tasks, building expertise based on practical experience as well as procedures and instruction to ensure that activities are running properly (Remmen et al. 2007).

2.1.3 Review the Sustainability Status and Set Objectives and Targets

LCM tries to implement life cycle sustainability assessment (LCSA) (UNEP 2011) into a real world decision-making process by applying a life cycle management concept with the aim of maximizing both the social, environmental and economic aspects of individual organization along its products lines (Finkbeiner 2011). Therefore, reviewing the organization's products is an important step to identify when and how to start the LCM process. The review helps to have an overview on the sustainability status of the organization and also where it wants to go for. The review process mainly covers gathering information associated with a product life cycle, market situation and external stakeholders. Information about important suppliers, business associations, authorities, retailers, research institutions, etc. needs to be included so that important aspects are covered.

Many companies already possess information on the impacts of their production processes and operations, but are uncertain of how to expand their understanding to the product life cycle and to think in terms of products rather than processes in order to identify material flows through the entire product life cycle. This would include impacts associated with suppliers, purchased materials or components, storage and distribution, use of the product and waste streams.

Important aspects that need to be reviewed are summarized in Table 4.3. They are categorized into aspects for environmental and social impacts, for market or commercial conditions and for stakeholders. Aspects for environmental and social impacts include understanding of impacts associated with the company's processes or products. The aspects should not be limited to the organization's territory, rather they have to go beyond the facility boundary to include the whole supply chain, both internal and external stakeholders. ISO 14031 – environmental management – which is an environmental performance evaluation standard and guideline (ISO 2013) can be applied to asses companies in evaluating their performance against their policy, objectives, targets and other criteria associated with their products. It can also be adapted to be applied to address other management aspects, e.g. quality or health and safety, and from a sustainability perspective economic and social aspects as well. For companies engaged in sustainability actions, the information may be already available in their corporate and environmental reports. In general, this information is presented in terms of the production process, rather than the single product.

Table 4.3 Aspects of a survey (Remmen et al. 2007)

Areas of concern

Aspects to be reviewed

Environmental and social impacts

Life cycle stages – where are the most important environmental and social impacts?

Technology – is there a new technology available or being developed that can reduce the impacts?

Do the competitors have the same impacts and how do they address them?

Market/commercial conditions

Supply – what are the product profile's characteristics?

Demand – how important is the social and environmental awareness of consumers and customers?

Value – what advantages are achieved by adding positive environmental and social characteristics as an extra product quality?

Stakeholders

Product chain actors – are suppliers, retailers or others interested in collaboration on environmental and social initiatives?

Authorities – what are the demands of authorities?

Within sector – what are competitors doing? Codes of conduct within the trade?

Which is the main pressure group, and what are their main concerns and priorities?

What are the main concerns and demands of consumers in export markets?

In addition to information on environmental and social impacts of their products or processes, a better understanding is necessary of both internal and external stakeholders, the current market conditions and the future opportunities linked with sustainability achievements. Discussion with all relevant stakeholders helps to get information on the legal and other requirements including environmental and social concerns. In addition, such discussion is also important when setting up objectives and targets. Goals to improve products' environmental and social performance will also have an effect on customers' expectations and responses.

Once the status overview is performed, then the next step will be to set objectives and targets. The criteria to select possible areas of product improvement are based on the responses from the questions listed in the survey. In some cases, the social and environmental problems identified by an organization may be solved by another's efforts, for example, the invention of a new technology or a supplier phasing out harmful substances due to pressure from other stakeholders. Therefore, the decision on prioritizing areas of concern for LCM initiatives is based on the finding from research on the current situation and knowledge. The following aspects are usually considered in the decision process (Remmen et al. 2007):

• Areas of considerable environmental and social impacts along the products' life cycle (Relevance). Impacts occurred within the organization facility may be easily identified. But a holistic approach may be required to identify potential areas of environmental and social problems along the supply chain.

• Areas for possible environmental and social improvements (Potential). An organization can have several opportunities for improvement, and therefore chooses different initiatives for improvement and also to involve all the relevant departments.

• Areas where the organization can make a tangible differences (Influences). High relevance and high influence could yield high potential for real improvements.

In the objectives and goal setting, different initiatives should be established and for each initiative a corresponding action plan that explicitly states the goals, main responsibilities and the time frame needs to be defined so that plans and initiatives are clear both for the management and employees.

 
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