Life Cycle Assessment: what it's, how to measure it and its benefits for businesses
Performing a Life Cycle Assessment (LCA) is important to make strategic decisions about the environmental impact of your business. What is the impact of your product or service? Is your product more sustainable than others? What actions are more effective to reduce your impacts?
Let's see what LCA is, why it is important, and how performing one can bring greater environmental and economic benefits to your company.
What is a Life Cycle Analysis?
Life Cycle Assessment (LCA) is a methodology to measure the environmental impacts of a product, service, company or territory. It considers the impacts of all (or most) of the life cycle stages. Meaning, the analysis comprise from the raw materials' extraction until the end-of-life of the product or service of the company, going through all the in-between processes.
A LCA is one of the few environmental metrics that allows talking about sustainability, since it can include environmental, social and economic impacts, giving a 360° view of the organization's performance. Furthermore, by including and relating these 3 sustainability aspects, one can discover potential improvements in and outside the organization, as well as making strategic decisions for the company.
This environmental science based metric delivers information that decision makers need to set the course of a business towards sustainable development.
Why is it important?
There are more and more companies that start worrying about their environmental and social impacts, be it by their clients or stakeholders demands. This has led to companies to measure their performance and make actions focused on improving.
A Life Cycle Assessment allows companies to estimate their social, environmental and economic impacts so that they can know their progress towards sustainable development. This metric evaluates a company's performance for their whole life cycle, giving them a global picture about their impacts and allowing them to focus on the impacts and activities that are more important.
Should your company perform a LCA?
Performing a LCA is something valuable for most companies, however it might prove to be more useful for some. For example, if your clients have started to become interested in sustainable products ore your stakeholders have started to demand measuring your impacts, a LCA is a good metric to start using.
If you want to communicate the impact of one of your products through an Environmental Product Declaration (EPD), you should conduct an LCA to measure its performance and follow the Product Category Rule. This will allow you to obtain comparable results with other similar products, and will be able to demonstrate the environmental benefits of choosing your product over your competitors'.
Also, you can use the results of a LCA to make a self declaration type II or an eco label if you performed a critical review as well, this will allow you to be set apart in the market and increase your customers' trust. This will increase your competitiveness and demonstrate your organization's commitment to sustainable development.
What are the benefits of a LCA?
Performing a LCA will allow you to take advantage of a number of benefits, for example:
- It'll help you determine the materials needed to have a more sustainable business.
- It will allow you to understand the environmental challenges of your products or services, as well as help you identify opportunities to improve the environmental performance throughout the life cycle.
- It supports the creation of a more sustainable business model.
- It gives confidence about the environmental benefits for your company.
- It allows you to compare yourself to the competition.
- It allows you to communicate environmental impacts objectively, so as your clients can fully trust you.
- It enables strategic decisions focused on supplier management, changes in the design of products and services, and innovation in processes, products or business models.
How to carry out a Life Cycle Assessment?
If you've decided to perform a LCA, you should know that this methodology follows the ISO 14.040 and 14.044 standards. It's important to mention that to perform a LCA you should use software programs such as OpenLCA, GaBi, SimaPro, among others. These will help to easily measure the impacts of your products or services.
Here, we'll give you the general outline of the steps to follow to successfully perform a LCA.
- Define the objective and scope: before starting a LCA, you should establish the objective of the study, by delineating the intended use of the results, the reasons for the analysis and the intended audience. You will also need to define the study's functional unit, limits, types of impacts and assumptions. As well as deciding whether you'll want to want a critical review of your study by a third party.
- Gather data: you should have at hand the information of the product or service you want to analyze. These data are, for example, the place where the materials are sourced from, how much are produced annually, energy costs, the type of transportation they use, and the distances, among others. This will give an overview of the processes that are carried out, the different stages and their corresponding inputs and outputs.
- Select the impacts to evaluate: once you have the data, you should choose the impacts categories to study. Some of the environmental impacts that a LCA can measure are climate change (Carbon Footprint), impacts to water (use and contamination), soil acidification, impact on human health, among others.
- Perform the measurement: once you have selected the categories to evaluate, use a LCA software to calculate your product or service's impacts for each category.
- Interpret the results: after you should carry out a sensitivity analysis to observe how the results vary due to small variations in the data. This way you can test the sturdiness of your study. You should also carry out an integrity and consistency analysis to evaluate that the study has all the relevant information and make sure that the suppositions and data are in line with your objective and scope.
- Analyze the results: finally, you should draw the conclusions of the study by identifying the limitations and making recommendations depending on the intended audience of your LCA.
- Perform a critical review of the study: optionally, you can send your results to a verifying entity that will make sure that the study is well done and that the results are congruent. This will allow you to communicate your results with additional support.
How to choose the best expert in LCA?
Carrying out a Life cycle assessment is not simple. The regulations for this type of studies have a specific technical complexity, so we recommend that you approach a specialist with experience in performing LCAs.
While it's important to choose a consultant who knows the methodology and industry being analyzed very well, you should also consider the characteristics of the service. Some consultants may limit themselves to only calculating your impacts, or they may expand their service and advise you on making decisions to reduce your impact. They may also offer to help your marketing team to effectively communicate the results, thus making sure that you do not fall into greenwashing.
Overview
Overall, a Life Cycle Assessment allows you to evaluate the environmental and social impacts of your product, service or company. In addition, it serves as a tool to empower your company in the market and boost its reputation. To achieve all these, you must start by defining the objective and scope of the study and find the perfect consultant to support you, only then it can lead to a result that will help your company to improve.
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