Leading Sustainable Organizations
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In the last 20 years, life-cycle assessment (LCA) has grown from the academic exercise I learned as a grad student to an accepted decision making tool for sustainability management. A large number of companies, from Apple to Unilever, employ LCAs in their sustainability work, often at substantial expense. LCAs are data intensive, requiring a team of diverse professionals working collaboratively across organizational functions.
Given the effort and cost involved, what are the strategic benefits of LCA — and should you be employing them?
At its roots, LCA is a method to quantify total sustainability impacts — like resource use and environmental damage — over the entire life of a product, from “cradle to grave,” as they say. While there is informational value in the basic exercise, the real utility of LCA is comparison — that is, comparing one product’s sustainability impacts with another’s. These comparisons can be made with existing products, or they can be made with future innovations still on the drawing board. Thus, there is a “now” and a “next” of LCA use.
The Now of LCA
Companies perform an LCA on existing products to assess baseline environmental performance. This then forms the basis for prioritizing performance improvement investments. Your LCA product profile will highlight “eco-hotspots” in the lifecycle, which are where the bulk of environmental impact occurs. A Siemens LCA of lighting, for example, found that the majority of environmental impact came from the use phase in customer’s homes and spurred the company to improve lamp efficiency. Alternatively, LCAs identify hotspots in manufacturing processes, as in the microchip industry, where LCA fingered toxic solvents in chip production as a major impact and led to cleaner substitutes like lemon juice.
Another “now” use of LCAs is marketing and commercial. Customers today routinely request the sustainability performance information that LCAs can provide. The German furniture manufacturer Kusch+Co uses LCAs to produce environmental product declarations for their entire product line, proof points that are integrated into the company’s marketing copy. Documenting marketing claims in this way builds customer trust and avoids charges of greenwashing. Australian vintner Taylors Wines uses LCA to validate its 100% carbon neutrality claims, for example.
LCA can also serve to benchmark your product’s performance relative to your competitor’s and serve as the basis for sustainability differentiation in product advertising. Relative environmental performance advantages can be found at any point in the life cycle and provide opportunities to accentuate sustainable attributes of your product line.
In a “now” LCA, you are comparing your existing product’s performance against itself at different points in its life cycle and against your competitors’ products. But documenting the current state of affairs is of limited long-term value. Sustainability is ultimately about innovating new and better products that meet customer needs but also align with resource limitations. It is about the “next” healthier and enhanced thing.
Using LCA to Find the Next
Because LCAs can point out where the big sustainability flaws lie in a product system, it is a good eco-innovation tool. It can be used to evaluate the sustainability implications of new products on the design table or, better yet, direct product development teams to new sustainable solutions not yet in the market.
When used as an additional product development tool, LCA can be used as part of an interative stage-gate process to evaluate the environmental implication of design choices at each step of the development. Product modifications, such as new material choices, can be screened not just for immediate environmental impacts but impacts further down the life cycle — say, in the customer use phase or end-of-life. Levi Strauss used this approach when developing its Dockers WellThread line of clothing and through careful design choices improved manufacturing, use, and end-of-life performance of its clothing. And if LCA results are disappointing, they can help reduce cost by terminating unsustainable projects at early stage.
Beyond individual product efforts, LCAs can be powerful if they drive a holistic perspective of the entire product system. This can foster both cross-functional collaboration inside the company and cross-organizational collaboration among company suppliers and customers.
Many times, the LCAs identify the biggest hotspots to lie beyond the facility gates. When they lie upstream with suppliers, improving performance may mean rethinking sourcing decisions. SC Johnson, for example, uses screening approaches to identify toxic materials in the inputs it purchases from suppliers and works to find more environmentally responsible substitutes. On the other hand, the biggest improvements may lie with our customers. The chemical giant SABIC, for example, uses LCA to develop products that solve customer sustainability issues in industries from packaging to automobiles.
Should You Be Using LCA?
There are many caveats, but the reality is that if you’re not doing you own LCA, someone else is already doing it for your products. Take the Sustainability Consortium, the child of Walmart’s massive sustainability initiative. This consortium of companies, NGOs, and academics is set on driving sustainability through the consumer products universe by making sustainability performance more transparent and by setting science-based standards. LCA is an important tool in this process and is being applied across industries.
This story is playing out over time in all industries. As the sustainability expertise fostered by practices like LCA diffuses through industries and sustainability standards emerge, strategic opportunities for action are foreclosed.
Are you being left out?