Companies' use of life-cycle assessment is exploding. the environmentalist reports
Powerful business drivers, ranging from increased environmental regulation to greater awareness of resource scarcity, are pushing the once niche tool of life-cycle assessment (LCA) into the mainstream.
LCA is essentially a measurement technique that allows companies to identify ways of lowering the environmental impacts of products across their whole life, from raw material extraction and manufacturing through to consumer use and disposal (see below).
Although LCA has been around since the 1980s, only a few companies, such as fast-moving consumer goods companies P&G and Unilever, were undertaking such studies then.
Fast-forward 30 years and analysts Verdantix predict that spending on LCA software by businesses will grow from €21 million in 2011 to €78 million in 2015 across the six largest European economies. According to Verdantix, growth in demand in Europe is the result of the following five factors:
- new EU legislation on environmental product labelling, which is expected to take effect in 2015;
- the French government’s Grenelle II environmental law, which mandates LCA for environmental product labelling from 2013;
- harmonisation of LCA methodologies, such as the Greenhouse Gas Protocol for product life cycles and ISO 14040 (see below);
- “democratisation” of product LCA software with lower price points, more simple models and better user interfaces; and
- attempts to achieve competitive differentiation on sustainability by product suppliers such as Michelin, Unilever and Volkswagen.
Simon Aumônier, partner at consultants ERM, says that carbon footprinting is also a key driver behind a growth in businesses carrying out LCA. “Some people who found out about the approach through carbon footprinting have moved on to other impacts, such as water, or across the full range of impacts including resource depletion.”
Sandy Smith, director of consultancy services at PE International, developer of the GaBi LCA software, has been working in LCA since the 1990s. He agrees that the PAS 2050 carbon footprinting standard, which was launched in 2008 and draws heavily on LCA standards, bought life-cycle assessment to a far wider audience.
“There was a lot of slow growth and then it grew like topsy when PAS 2050 came out. People seemed to be able to grasp that more easily than LCA,” says Smith. “Now I think most manufacturing organisations will have done something around LCA.”
Pressured environment
Businesses have undertaken LCA for a number of reasons. In some cases, it has given them the means to contest claims made by stakeholders about their products. For example, Kimberly-Clark was under pressure from environment groups to use more recycled material in its tissue products. Working with ERM, the company conducted an LCA to ISO standards 14040 and 14044 and had the results independently reviewed.
The project found that there was no environmental advantage between the use of recycled or virgin fibre in the manufacture of the company’s products, since the paper came from integrated mills in Scandinavia powered by forest residues, rather than the fossil fuels that recycled paper mills in the UK were using.
Aumônier explains: “It’s not simply a comparison between virgin and recycled, it’s a more complex system and really that’s at the heart of the benefit of the life-cycle assessment approach. It requires you to understand all of the system that you look at, not just what might at first sight be apparent.”
Similarly, the Environment Agency’s LCA work on nappies found that disposable nappies were not necessarily worse for the environment than reusable ones. The difference depended on how the reusable nappies were laundered and dried; if they were washed at a high temperature and dried using a tumble dryer, the environmental impacts were largely equal to the disposable version. And in a small number of cases, reusable ones were found to be worse, as the research discovered that some people ironed their nappies.
“People were doing something that was really counterintuitive, wanting to deliver the better environmental system but not recognising that some of the things that they were doing around using that product were having a counterproductive effect,” Aumônier explains.
Vestas, the biggest wind turbine manufacturer in the world, originally started using LCA in the late 1990s after press articles suggested that wind power did not reduce carbon emissions. It found that a single turbine can generate more than 25 times the energy to society than it uses in its entire lifetime.
The Danish company has also carried out comparative studies on other energy sources and found that one Vestas turbine emits only 1% of the CO2 that a coal power plant emits over its life cycle.
Vestas saw the benefit of its LCA work and now uses life-cycle assessment as a way of providing transparent information about the environmental performance of its products to a wide range of people, including customers who need such information for environmental permitting.
It has also found ways of improving turbine performance, reducing material and energy consumption in the supply chain and reducing waste – all crucial steps in lowering the cost of energy and therefore improving the business case of a wind farm.
If companies use LCA wisely, it is possible to identify improvements in products that deliver cost savings at the same time.
Healthcare company GlaxoSmithKline (GSK) has developed a target on “mass efficiency”, which is the output of the process versus the input materials. Currently, GSK has a mass efficiency of 1%, but by 2020 it wants to improve this to 20%, so for every kilogramme of output, there is only 20kg of input.
“That is one of the most significant things we can do – effectively it means we are going to be five times more efficient,” says Matt Wilson, GSK’s supply chain sustainability leader.
The company started to apply LCA in its development of new products, but soon realised that if it was to have a real impact, life-cycle assessment would have to apply to its existing portfolio – which ranges from pharmaceuticals to consumer goods such as Aquafresh toothpaste, Lucozade and Ribena – at the same time. It is in the process of completing a detailed carbon footprint of its top 20 products.
One-third of GSK’s total carbon footprint from such products comes from its metred dose inhalers, such as those used to treat asthma. When it discovered this, GSK developed a product with less propellant. It now launches all new versions in a dry powder format, which has a global warming impact that is 29-times lower than a traditional inhaler. GSK is investigating ways to better the product by making the plastic more lightweight and improving the inhalers’ post-use recycling.
Data management
One of the biggest challenges that businesses undertaking LCA come up against is that of data. They can either use primary data, which is costly to collect, or secondary data, which might not be quite so accurate but is available from a variety of reliable sources.
Smith and Aumônier agree that whether a company uses primary or secondary data depends on what they are planning to use the results of the LCA for. If a business wants to use the data to improve the environmental performance of a product, their results will not need to be as precise as if they want to use them publicly, for example to market their product as greener than that of a competitor.
“We tend to encourage people to start simple and get more complicated as it becomes necessary – the last thing you want to do is spend years doing some kind of assessment only to find that you could have done it in a couple of months,” explains Aumônier.
Some products, particularly technology, develop so fast that keeping on top of changes to specifications and materials is very tricky. A business looking to do an LCA on such products needs to consider very carefully how certain it needs to be of the results.
“Don’t make it too precise so that you end up with an analysis of apple growing, for example, that is only valid one year and not the next,” warns Aumônier. He advises companies to gather information that is valid for a longer period so they do not frequently have to reinvent the analysis.
But there have been a lot of developments in the field of data collection for LCA in the past 12−18 months, as Smith reports. “As much as 70% of the time would be spent on collecting data, so companies were paying a lot of money for consultants to go and collect data. Now, software systems can mine the data. You can save an incredible amount of time by using existing data sets.”
For example, data needed for an LCA could be already in existence in a company’s accounting system and the new software can retrieve these and input them directly for LCA purposes. In this way, a business can cover entire portfolios of products.
Car manufacturers such as Daimler and Volkswagen are already doing this. “This is a big change that it’s not about single product assessments,” Smith says. “We have literally three or four clients globally who understand that.”
Customer behaviour
Conducting product analysis in this way inevitably uses a lot of secondary data rather than primary data, which is expensive. But secondary data have got better, Smith says.
Tesco is now looking to use more widely available data. The UK’s largest retailer worked with ERM to undertake LCA on 500 products, which have been accredited to the Carbon Trust’s carbon footprint label. It is now looking at a further 600 products, but the assessments will be less detailed because it is not looking to have them accredited by the Carbon Trust, as the aim is to improve the performance over the whole supply chain rather than being driven by trying to connect with the public directly.
A spokesperson for Tesco told the environmentalist earlier this year, that the retailer was adapting its product labelling so that it is faster and cheaper to operate, appears on more products and helps customers and suppliers to reduce their CO2 emissions.
The rationale behind this is the belief that consumers are more likely to buy a product if they feel reassured that the company manufacturing it is addressing the negative impacts, rather than purchase something based on a number given for environmental impacts such as carbon or water.
Thinking about products throughout their life cycle forces a company to consider parts of the cycle that are not under its direct control, including use by the consumer and work in the supply chain.
Unilever in particular has attempted to change consumer behaviour. It has a target to halve the environmental footprint of its products in terms of energy, water and waste. But 68% of its impact comes from consumer use, especially from heating and water use in its laundry and personal hygiene products.
As part of a strategy to tackle this, the company launched concentrated detergents. Its Persil Small & Mighty product uses less water, less packaging (so fewer lorries are needed to transport it) and works at a low temperature.
“You need to have a careful strategy – it’s one thing to create an innovation, but it’s another to persuade people to buy it,” says Karen Hamilton, Unilever’s vice-president of sustainability.
The first time the company launched the product in the US 15 years ago, it “completely failed”, she explains. Consumers saw the smaller packaging and thought it was poor value for money. They were also not convinced the concentrated formulation would work so they used more product than was necessary.
When Unilever relaunched the product in 2005 in the US, it worked with Walmart, which owns Asda in the UK, to market the product to customers. It also included a cap on the packaging to help consumers measure the right dose. “There’s a lot of consumer education that goes beyond advertising,” she says.
Supply side
Engaging the supply chain is vital but can be a huge challenge for companies that have thousands of global suppliers. Companies with large and diverse supply chains usually start by identifying a small group of their biggest suppliers and working with them.
GSK, for example, is talking to 30 of the 4,000 businesses in its supply chain. Wilson says that there is a huge trust hurdle to overcome. “We’re asking them to share a lot of commercially sensitive information,” he explains.
One successful tactic has been to check with suppliers whether something GSK is asking them to do is actually making their business unsustainable. GSK might then suggest that they could do things differently, thus switching the relationship from one where one party is being told what to do, to one where both work together.
“It’s starting to drive some really interesting collaborations,” says Wilson. To illustrate how the business relationship is changing, Wilson uses the example of a carton manufacturer that is now asking GSK if the company would like it to make more lightweight packaging.
The key to engaging the supply chain, says Aumônier, is communication. A business needs to make it crystal clear what information it wants from a supplier, why they want it and then make it easy to provide, such as giving them a template to put the information into and using the same units of measurement that they would use themselves. “The secret is to make the burden as small as possible,” says Aumônier.
In the future, as thinking about products’ whole life cycle moves further into the mainstream, there will be an even greater emphasis on collaboration and sharing of information, Aumônier believes.
“It’s quite astonishing how much data there [are] in the public domain,” he says. “I don’t think that will stop people doing it by themselves – the more detailed assessments may well be done behind closed doors, but the broader LCAs on more and more products and services will be done in the open.”
What is life-cycle assessment?
Life-cycle assessment (LCA) quantifies the emissions and resources associated with a product over its whole life cycle.
All physical exchanges with the environment are assessed: both inputs, such as natural resources, land use and energy, and outputs, including emissions to air, water and soil.
A crucial benefit from looking at a product so broadly is avoiding “burden shifting”, where environmental damage is reduced in one area but more damage is created somewhere else.
The inputs and outputs are collated in an inventory and grouped into categories, for instance “climate change” or “human toxicity”.
They can then be converted into a single indicator, such as a carbon footprint. For example, all greenhouse gases are grouped together and harmonised to an equivalent metric, usually kilogrammes of CO2 equivalent.
In order to carry out LCA, a business will first need to screen its product portfolio to identify the goods and services that have the highest environmental burden. This will depend on several factors – not only inputs and outputs of a product, but also the number sold.
Next, the business should identify the life-cycle stages that contribute most to the overall environmental impact of a product. This will involve looking at stages that are not under its direct control, such as the supply chain and consumer use, including whether a product is recycled.
The business can use primary data from its own research or secondary data to conduct an LCA. The International Reference Life Cycle Data System (ILCD Data Network) or the European Reference Life Cycle Database, developed by the European Commission, provide data for the emissions and resource consumption of many products and processes.
The next step is to identify possibilities for improvement. There may be many that are good for both the environment and the business, such as a reduction in energy use, which then lowers bills. Environmental data can be complemented with cost data to find the most beneficial changes.
LCA tools and standards
There are several ways of assessing the life-cycle impacts of products; some are more complex than others. Life-cycle assessments (LCAs) that are compliant with ISO standards 14040 and 14044, involve considerable data collection and are generally carried out when no other studies have been completed for a particular type of product.
For these types of assessment, dedicated LCA software tools are available, for example GaBi software developed by PE International, SimaPro by PRé Consultants, Quantis SUITE 2.0 by Quantis International, and Umberto by ifu Hamburg GmbH. LCA can be simplified by using generic data from sources such as the International Reference Life Cycle Data System (ILCD).
The European Commission has developed guidance consisting of a handbook and online data network through the ILCD to support people working on LCA. The European Platform on Life Cycle Assessment includes a discussion forum and a resource directory with information on tools, services, databases and providers globally.
Developments in standards
Standards in the ISO 14040 series have been at the heart of efforts to achieve consistent and robust use of life-cycle assessment since the 1990s. Chris Foster, of EuGeos, is IEMA’s representative on the BSI committee handling these standards in the ISO structure. the environmentalist asked him how the standard-setting process is responding to the surge in use of LCA over the past few years.
“There’s a lot of activity right now. That’s a combination of new standards coming forward to deal with different applications of LCA, and the periodic review of existing standards,” he says.
Here is a summary of recent and upcoming changes:
- For both of the core LCA standards, ISO 14040 and ISO 14044, periodic review is due. This could be quite challenging, warns Foster. The review needs to reflect development of the LCA method – for example, the increasing use of input–output databases and the evolution of impact assessment methods – as well as recognise that 14044, in particular, is a foundation for many other ISO and non-ISO standards, including eco-labelling standards, carbon-footprinting standards and the rest of the ISO 14040 series. “So the review will need to strike a balance between conservation and development,” says Foster. “In my opinion, 14040 could accommodate more change, perhaps becoming a statement of the principles underlying both LCA and its applications – that is, life-cycle thinking.”
- ISO 14045 has just been published, and addresses the “eco-efficiency” assessment of product systems. It aims to help organisations conduct combined assessments of the environmental and economic effects of products and services. “I took part in the working group developing 14045, and I still feel some parts of the final standard could have been made tighter,” he advises. “It’ll be interesting to see how widely it’s used.”
- The forthcoming ISO 14046 will be a standard for conducting a “water footprint analysis” using LCA principles. Foster warns, however, that although the standard is taking shape, it is still an internal draft in the ISO system, so a final version remains some way off.
- The technical reports ISO 14047 and ISO 14049, which provide examples of how to apply 14044 to impact assessment and scoping and inventory analysis respectively, have been updated to reflect the latest edition of 14044 (2006). The new versions are due for imminent publication, but the technical content has changed very little from the originals.
- Work is about to start on ISO standards for the application of LCA to organisations and for the critical review of LCAs. Foster explains that the first work should eventually help organisations to carry out robust LCAs, focused on their overall activities rather than on their products or services. The second piece of work will aim to build on the existing 14044 content to better specify the requirements for critical reviews of different LCAs.
- ISO 14067, the ISO standard for calculating the carbon footprints of products, will be issued for its second public ballot in the next couple of months.
