Life Cycle Assessments: Converting Results into Business Value

August 22, 2021 | Insights,

What is an LCA?

Life Cycle Assessments (LCAs) provide organizations with information about the environmental and social impacts of a product or service throughout its entire life cycle.

Anthesis Executive Director Dr. Jim Fava, who has worked on the development and application of LCAs for over 30 years and is known as The Father of Life Cycle Assessment, developed 10 Golden Rules for Applying Life Cycle Information.  Jim recently won the LCA Lifetime Achievement Award from the American Center for LCA (ACLCA). He co-leads efforts within the ACLCA, Forum for Sustainability Through Life Cycle Innovation (FSLCI), and Society of Environmental Toxicology and Chemistry (SETAC) to promote the relevancy and application of LCA results. In this blog, he shares insights on how to leverage LCA results to have a real impact on business outcomes.

 

Driving impact with LCAs

The LCA community has historically spent too much time working to improve methodology, databases, software, and capacity to perform LCA studies, but not enough time understanding how the results of LCA studies can be made more relevant and useful to users. There is an opportunity for LCA practitioners to enhance their engagement and communication with LCA users to drive further impact by ensuring the LCA results inform future business decisions. In this blog we outline strategies to transform LCA results into true business value.

Use the language of your audience

LCA results can create value across multiple departments and teams, including innovation, marketing, and procurement among others. Translating results for various audiences is a key step to ensuring the results transform into action across the organization to create business and societal value. These values, such as growing revenue, reducing costs, enhancing brand and mitigating risks can only be realized with long term implementation follow through. Additionally, an organization can drive business value by addressing sustainability throughout the value chain, for example by cutting your organization’s carbon footprint or water use. 

It’s important to understand how to translate LCA and sustainability at large into these traditional business terms, indicated in shorthand by Revenue, Brand, Cost and Risk (see figure). This helps audiences across the organization realize opportunity to accelerate the needed improvements.

For example, a computer company wanted to embed life cycle information into their design process – early efforts related to Design for Environment (DfE). The LCA team and the design team had little in common in terms of priorities and jargon. Their solution was to transfer someone from the innovation team who understood the team’s processes and language thoroughly and had them trained to use life cycles tools and information, giving them a “bilingual” function.  The integration of teams able to communicate to each other’s priorities meant the technology company could drive meaningful change.

Other examples of working across language barriers

  • Johnson & Johnson’s using the results of LCA studies as the foundation for its Earthwards program, which resulted in $9 billion of EARTHWARDS™ recognized products.
  • At a workshop held in New Zealand; the business value framework was used in a series of interaction sessions with examples. At the start of the workshop, the attendees were asked to think of a project they had wanted funded within their own company that had not been funded. After the four-hour workshop, the attendees were asked if they applied the language, they just learned do they think their project would have been funded – all 40 of them raised their hand and said yes.
  • One company was asked how do you measure impact – he said they ask the businesses – over the years they built up a nice collection of stories associated with moving from the study results to real business impact – using the words of business.

Shift from focus on results to impact

There is a tendency within the sustainability space to focus on activities—e.g., number of LCAs, sustainability reporting, development of standards, — rather than on outcomes, e.g., absolute impact reductions, displacement of less sustainable alternatives. To drive outcomes requires a commitment to engaging activities through the additional phases of implementation, changes to improve, and measurement. LCA results that are utilized throughout the innovation processes, are evidently more valuable than results that sit unused in someone’s computer LCA results are important but only the first step to create actual positive impacts. LCA results have the potential to inform strategy, marketing, R&D, and stakeholder dialogue – where benefits result.

LCA business applications

  • Research & Development: product innovation, understanding tradeoffs, design for the environment
  • Marketing & Customers: product differentiation, customer support, credible marketing claims, profitability
  • Stakeholder Dialogue: policy & advocacy, external reporting, employee engagement
  • Strategy: investment decisions, portfolio steering, operations management, supply chain optimization

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LCA engagement to implementation

After the completion of an LCA, the real work of implementation begins, which can require ongoing engagement to drive impact. It is only after the LCA results inform decisions within the applications, and changes occur, that we can realize business value and positive sustainability impacts. As you might guess, this often takes months or even years after the LCA results are finalized. That is why it is so important to ensure that the users of the LCA results are part of the Goal and Scope Definition (G&SD) right from the start.  Additionally the LCA providers maintain an ongoing connection with the subsequent decision-making processes  (which include application of LCA results).   Thus creating  a pathway along the journey to value creation,  that we refer to as systematic interpretation.

Takeaway messages:

  • It is important to ensure that the users of the LCA results are part of the G&SD right from the start; [there are many studies where the users are not part of the G&SD and as a result they may not be understood, or even considered by the users]
  • the LCA providers should maintain an ongoing linkage with the subsequent decision-making processes along the journey to value creation. [More of an advisory and perhaps a translator role]
  • This ongoing linkage implies that the LCA providers become familiar with the applications’ business practice, [for example, when might the LCA results be considered – e.g., often in the early ideation stage or when there may be an interest in a marketing claim]
  • It is critical to understand and be able to speak the language used within the applications and those related to business values – revenue, brand, costs, and risk.

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