Section 8.4: Life-cycle assessment for supply chain management

A life-cycle assessment (LCA) is a tool that can be used to evaluate the potential environmental impacts of a product, material, process, service or activity. It is a comprehensive method for assessing a range of environmental impacts—such as emission of greenhouse gases (including carbon dioxide), energy consumption, acidification, and wastes produced—across the full life cycle of a product system from raw material acquisition to manufacturing, through consumer use, until final disposal. Watch the following video for an insightful explanation on life-cycle assessment: “Life-cycle Assessment” – Cascades Fine Papers.

Many companies already use the life-cycle approach in the framework of sustainability. LCAs have been used to help reduce the overall environmental burdens across the whole life cycle of goods and services. LCA is also used to improve the competitiveness of the company’s products and in communication of compliance of regulations with relevant governmental bodies.

LCA helps to promote the responsible design and redesign of products and processes that reduce overall environmental impact and the use and release of toxic materials. LCAs identify key materials and processes within products’ life cycles that are likely to pose the greatest impacts to society and the environment, including occupational and public toxicity impacts. These assessments enable businesses to make conscious product improvements through environmentally sound processes, materials, and design choices. LCA also facilitates the benchmarking of product system and manufacturing options. It can therefore also be used to improve decision making processes related to technology investments and system innovations and retrofits. The figure below defines the steps within the typical life-cycle assessment process.

Source: EPA 1993

The benefit of LCA is that it provides a single tool that is able to provide insights into upstream and downstream trade-offs associated with environmental pressures, human health, and the consumption of resources. These macro-scale insights complement other social, economic, and environmental assessments.

However, the use of LCA is merely a decision supporting tool, rather than a decision-making tool, since it has a specific focus. It tends to exclude economic and social impacts, as well as the consideration of more local environmental issues. It must therefore be used in conjunction with other tools.

Life-cycle Assessment Framework

The conduct of Life Cycles Assessments requires a globally standardized methodology to ensure its reliability and transparency. Two international standards, ISO 14040:2006 and ISO 14044:2006, describe a repetitive four-stage framework for completing an LCA.

Source: ISO 14040 2006

1) Goal and Scope Definition

The goal & scope definition ensures the LCA is performed consistently.

 An LCA models a product, service, or system life cycle.  In the goal and scope the most important (often subjective) choices are described, such as the reason for executing the LCA, a precise definition of the product and its life cycle, and a description of the system boundaries.

Read about how defining the right goal & scope helped The European Space Agency to drive value here.

2) Inventory Analysis of extractions and emissions

In the inventory analysis, a company looks at all the environmental inputs and outputs associated with a product or service, such as the use of raw materials and energy, the emission of pollutants and the waste streams. This is where the company is able to attain a complete picture of their supply chain’s environmental footprint.

Learn how accurate inventory analysis helped Lucite understand the environmental impacts of plastic products here.

3) Impact Assessment

In the life cycle impact assessment(LCIA), conclusions are formulated that allow a company to make better business decisions. Companies classify the environmental impacts, evaluate them by what is most important, and translate them into environmental themes such as global warming or human health. The most important choice the company has to make is the desired level of integration of the results. This usually depends on how they would like to address your consumers and the ability of the consumers to understand detailed results presented.

Study how the LCIA step helped AISE determine the hotspots in the life cycle and define advanced sustainability profiles of their products here.

4) Interpretation

During the interpretation phase, companies are required to ensure that their conclusions are well-substantiated. The ISO 14044 standard describes a number of checks to test whether conclusions are adequately supported by the data and by the procedures used. This way, the company can share its results and improvement decisions with the world transparently. 

Examples of LCA in practice

The following are some examples of large organizations that have successfully integrated life-cycle assessment into their operations. Study these to gain a practical understanding of how LCA aids in the promotion of responsible design and redesign of products and processes, leading to improved environmental and business performance.


Supplementary Resources

Deloitte (2012) “Enhancing the value of life cycle assessment”

 Piekarski , da Luz , Zocche, and de Francisco (2013) “Life Cycle Assessment as Entrepreneurial Tool for Business Management and Green Innovations”

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