Many companies have already answered yes to that question – for a combination of reasons typically related to stakeholder interest, key customer demands, public perception, and competitive positioning. In fact, life cycle analysis (LCA) has increasingly become an important tool in mature corporate sustainability programs, providing organizations with a consistent methodology for implementing key program components such as:
- Product Carbon Footprinting
- Design for the Environment
- Environmental Product Declarations
- Environmentally Preferable Purchasing
- Environmental Supply Chain Management
What Constitutes an LCA?
Simply put, it is an advanced environmental impact analysis that covers more than just interactions caused by an organization’s manufacturing and/or service operations. An LCA examines environmental interactions along the entire organizational value chain - incorporating a full-spectrum analysis of the acquisition of raw materials, manufacturing activity, product use and/or delivery of a service, maintenance of the product or service, and ultimate disposal. The overarching goals of an LCA are to:
- Develop a comprehensive inventory of material inputs, energy consumption, water usage, and environmental releases
- Evaluate the potential impacts of environmental releases and resource consumption at each stage of the value chain
- Clarify and interpret the impact analysis results
- Use the information to make more informed decisions concerning resource inputs, product and/or service design, supplier selection, and marketing
The approach for conducting an LCA is addressed under the ISO 14040 standard (see International Organization for Standards. 1997. Environmental Management. Life Cycle Assessment – Principles and Framework). ISO 14040 identifies that a typical LCA consists of four main phases, as noted in the diagram below.
Goal Definition and Scoping – In this phase, the organization identifies the primary reason(s) for conducting its study, main audience for receiving the results, types of information needed by decision-makers, and the level of specificity required.
Inventory Analysis – The inventory phase involves characterizing the boundaries of your system (typically via constructing a flow diagram illustrating the processes being evaluated), types of data needed, data collection methodology, and procedure for verifying data. At each stage along the defined value chain, the organization examines key inputs (e.g., electricity, fossil fuels, water, specific process raw materials) and outputs (e.g., air emissions, water discharges, solid wastes, resource use).
Impact Assessment – The assessment phase involves converting the outputs of the inventory into an indicator for defined impact categories. Impact categories typically cover a broad range of environmental concerns - including climate change, water consumption, acid rain and eco-toxicity. [See Figure 1 below for more detail.]
Interpretation – In the last phase, an organization analyzes the results and develops conclusions relative to its original goals. Ideally, the organization should recognize and explain the limitations of its study after developing conclusions. The interpretation phase commonly includes LCA documentation and reporting activity.
Why Conduct an LCA?
There are numerous reasons why companies, trade associations, and even governmental entities have made the decision to conduct an LCA. These motivating factors can generally be categorized into four main groups:
Environmental Supply Chain Management – Companies respond to the demands of key customers for information that the customer may need for its own sustainability program. For example, large retailers have been very active in requiring their suppliers to examine at least the carbon, energy and water footprints associated with its products. Furthermore, food and beverage companies have similarly been working with key customers to obtain LCA data that can be used in their sustainability efforts.
Process Improvement – While there are often external forces prompting a company to conduct an LCA, many have decided to employ the LCA methodology for process improvement. For example, an LCA can assist a company in comparing the relative benefits of one process versus another, different raw materials within a given process, and where the environmental “hot spots” exist along its value chain.
Product Marketing Opportunities – LCA has long been used to compare rival products in the marketplace. Often this is done via broad-based LCAs conducted by trade associations. More recently, the LCA approach has been used to support environmental product declarations and other eco-labeling initiatives.
Environmental Performance Measurement – An LCA program can allow an organization to examine its impacts in a disciplined manner and provide a platform for determining the effectiveness of environmental mitigation and/or sustainability actions.
Companies across a broad spectrum of industries are using LCA methodologies for corporate decision-making. Some examples of corporations with active LCA programs include Procter and Gamble, Coca-Cola, Pepsi Co, Dow Chemical, Volvo, Ford Motor Company, Levi Strauss, 3M, Hewlett-Packard, Kodak and McDonalds. Active trade associations include the Glass Packaging Institute, National Council for Air and Stream Improvement, Portland Cement Association, and Association of Plastics Manufacturers in Europe.
Available Tools for Conducting an LCA
Software and databases have emerged in recent years to facilitate the process for conducting an LCA. Presently, two software products dominate the market among LCA tool providers. According to a 2006 study conducted by Columbia University, about 90% of LCA practitioners use either Gabi Version 4 or Simapro Version 7.1 as part of the overall analysis. Both are process-based models that quantify physical flows of energy, resources, and environmental impacts related to the production of a specific product. Other notable LCA tools in the marketplace include Umberto, Jamai Pro, and the US Life Cycle Inventory database (sponsored by the National Renewable Energy Laboratory).
For moderately to highly complex industry operations, it can be very challenging to conduct an LCA without the use of software tools – particularly where multiple products or process options need to be examined. Thus, most LCA practitioners tend to use one of these available tools to minimize the time required and improve the accuracy of the analysis.
As the LCA field continues to mature, development of more readily available data may improve the ability of companies to conduct an LCA efficiently and cost-effectively. The recent uptick in LCA activity has led to the establishment of Earthster – an open source platform for collecting and sharing environmental data in supply chains. The goal of this open platform is to increase transparency in using this supply chain information for conducting LCAs and/or carbon footprints. Time will tell whether this web portal achieves its lofty goals.
For most organizations initiating the LCA process, development of a Scoping Framework document is critical – regardless of whether software tools or manual approaches will be used to conduct the analysis. The Framework document can be used to establish important factors that will guide the process and resources needed for the overall initiative. Below is a recommended outline for the Scoping Framework document.
- Goal statement – Brief statement on the primary and ancillary goals of the analysis
- Intended applications – Identification of processes and/or material input options considered
- Intended audience – Clarification on the main audience and target decision-makers who will be recipients on the results
- Intended use of results – Discussion on whether data will be used by key customers in their own sustainability programs as well as whether the organization may also use results in its own internal evaluations for sustainability and process improvement
- Function, functional unit, reference flow – Key point for the analysis serving as the point of comparison (should be developed in terms of delivery of a defined amount of product or level of service)
- System boundaries – General diagram of the system to be evaluated, including clarification on whether the analysis involves cradle to gate, cradle to grave, or cradle to cradle
- Criteria for including inputs/outputs – Explanation of how data will be selected and whether the analysis will establish de minimis flow values for certain raw material inputs
- Data quality requirements – Explanation of how data will be analyzed and verified
- Allocation approach – Discussion of how results will be allocated to multiple products or by-products (if applicable)
After the Framework document has been completed, the organization needs to prepare for data collection. That step begins with developing a detailed flow diagram of the processes to be considered. A flow diagram is a tool to map the inputs and outputs to a process or system. For example, calculations of energy flow should take into account the different fuels and electricity sources used, the efficiency of conversion and distribution of energy flow as well as the inputs and outputs associated with the generation and use of that energy flow. The goal is to have a detailed and accurate list of all the inputs and outputs of the process studied. However, this analysis is iterative and as data is collected and more is learned about the system, new data requirements or limitations may be identified that require a change in the data collection procedures so that the goals of the study will be met.
Once the LCA scope has been established and the process boundaries clearly delineated, the organization is ready to proceed with the data intensive LCA phases: Inventory Analysis, Impact Assessment, and Interpretation. Future EQ articles will provide more detailed guidance on these phases.
For further information on Product Carbon Footprinting and Life Cycle Analysis, please contact Rich Pandullo (Director, Sustainability and Environmental Management) at firstname.lastname@example.org or 919-462-9693 or Maren Seibold (Managing Consultant) at email@example.com.