Link Life Cycle Assessment with Business Objectives
In most companies, sustainability goals are set top-down. In the corporate sustainability strategy, goals are set for energy, water and climate change, for example. Business units and departments are then given the task to achieve these goals and start various projects to realize these goals in the timeframe given. The projects are topic, location or process specific and do not take trade-offs into account. Based on the goals, companies want to measure the results to report on them and improve their performance. Often it turns out to be quite hard to report and improve the goals. They were not really substantiated by insights on a business and product level which is where the improvements have to be achieved (left column of Fig. 9.2), and let alone the negative trade-offs these improvements could have.
LCA is much more a bottom-up approach as it starts at a product level. In the product or service life cycle it is identified where a product has its impact. LCA can deliver insights in what impacts occur for each impact category and life cycle stage. It enables us to identify hotspots and improvement opportunities, from material selection to pinpointing the most impactful supplier, from process innovations to contributions of each phase. However, at the same time LCA struggles to link these hotspots and improvement opportunities to the KPIs of the company (see column 2 of Fig. 9.2), especially as these are often formulated in a different language. TSC has done some great work to link hotspots to KPIs, but adding the top-down route is essential to make it company specific and meaningful for management. An integrated approach provides a unique opportunity to achieve maximum alignment of product and corporate strategies (Furfori et al. 2014).
To increase the impact of LCA, the LCA practitioner and the LCA department need to connect the dots. To take the lead in this you can create an overview of business and project KPIs and combine these with the hotspots you identified through LCA studies (Fig. 9.2). Based on those insights and KPIs, projects for improvement can be identified. This approach helps to link the product level with the business/ corporate level. It brings together the sustainability insights on a corporate and product level. By doing this you can identify sweet spots, overlap in hotspots as well as blind spots. It also brings together different departments when it shows they need to collaborate to achieve their goals. The same applies for suppliers; based on the hotspots the most relevant suppliers for the sustainability goals – which is not the same as the most important suppliers in terms of costs – can be pinpointed. By doing this the sustainability strategy gets more substantiated and goals become
Fig. 9.2 A top-down and bottom-up approach to link LCA results and business objectives
more realistic. By forming new partnerships with suppliers or customers and stimulating cross-company collaboration, innovation can be spurred.
LCA can play an instrumental role in the further implementation of these improvement projects, but do not hesitate to use other tools if needed. Once it has been embedded in the processes, the next step is to set up the infrastructure to facilitate this and to explore new opportunities to create value. The latter can only be done if you are a trusted business partner within your company.
Jointly Explore New Applications
Over the past few years a number of studies have been published about the use of LCA in business (amongst others Chun and Lee 2013; Piekarski et al. 2013). These studies identified the several ways LCA can be used. Some of the studies also identified for which departments the studies could be used. What is missing in those studies is the combination of the two. So, what use is relevant for a specific department?
Fig. 9.3 Applications of LCA in (different departments of) a company, inspired by Moro Piekarski (2013)
We tried to represent that in Fig. 9.3 below, which was inspired by the study of Moro Piekarski. In your daily practice this is something you need to investigate.
Apart from the type of use, it is important to look at how it is used (ad hoc vs. integrated) and why it is used (reporting, performance improvement or value creation). The overall purpose – or the why question – is related to the corporate sustainability strategy: is it aimed at compliance and reducing risk or is the goal to create shared value. The more it is aimed at value creation, the more LCA should be integrated in the business. Is it more directed at compliance and reporting, LCA probably stays more ad hoc. Reporting and improving performance can be done on a department level, innovation requires a more integrated and holistic approach.
To develop these specific applications for LCA it is essential to link up with people from these departments to explore the needs and opportunities – remember the personas we presented earlier. In some companies they recognized this need and created a specific position to liaise between the LCA department and the internal client. In a transition phase this could be a good solution.
LCA has developed into a sound and robust methodology that is probably the best approach available to measure social and environmental impact. Within the LCA community there are a lot of talented and motivated people to make a change. We saw how LCA practitioners expand their own ecosystem and step out of their comfort zone based on facts and how this increased the impact they have.
We have given a five-step approach to become more relevant and step into a world that identifies opportunities to create sustainable value. However, our best advice is listening, and especially listening to those outside the LCA community, the people who are engaged, in what we have called “alternatives” and of course the departments that could benefit from LCA. What matters is whether you can provide a basis for rational decision-making by the business that will result in sustainable products and services as well as business value.
Chun Y-Y, Lee K-M (2013) Life cycle-based generic business strategies for sustainable business models. J Sustain Dev 6(8)
Frankl P (2002) Life cycle assessment as a management tool. In: Ayres RU, Ayres LW (eds) A handbook of industrial ecology. Edward Elgar, Cheltenham
Furfori S, Antonini V, Breedveld L (2014) The link between LCA and CSR with espresso coffee as an example. In: 9th international conference LCA of food, San Francisco. 8–10 Oct
Kiron D, Kruschwitz N, Haanaes K, Reeves M, Fuisz-Kehrbach SK, Kell G (2015) Joining forces, collaboration and leadership for sustainability. sloanreview.mit.edu/projects/ joining-forces/
Piekarski CM, Mendes da Luz L, Zocche L, De Francisco AC (2013) Life cycle assessment as entrepreneurial tool for business management and green innovations. J Technol Manag Innov 8(1):44–53
Unruh G (2014) Sustainability dialects. sloanreview.mit.edu/article/sustainability-dialects/