Why Life Cycle Assessment is the best tool for sustainability.
Why Life Cycle Assessment should be part of your sustainability strategy
How can Life Cycle Assessment improve my product's sustainability? What are its benefits and limitations? Which standards should I follow?
If you have asked yourself these questions you came to the right place. We will deep dive into how Product LCA works and what role it can play in all your decision-making towards sustainability.
What is Life Cycle Assessment?
Life Cycle Assessment (LCA) is an internationally standardised methodology designed to quantify the environmental pressures related to goods and services (products), the environmental benefits, the trade-offs and areas for achieving improvements taking into account the full life-cycle of the product.
LCA follows a holistic approach by studying systems in their entirety rather than focusing on specific components of a product or service. It also avoids ‘burden shifting’ by encompassing multiple environmental impact categories.
Across all (or most of) its lifecycle stages, a product draws resources from the environment and the technosphere. An LCA study aims at quantifying the impact of this exchange of resources and emissions between the product system and the environment.
Applications of Life Cycle Assessment
The growing importance of a detailed quantification of the environmental impact of companies is bringing LCA into the spotlight as the go-to framework.
This is particularly true for consumer product companies, like the fashion ones, where up to 90% of the company's impact comes from the making and selling of products.
Moreover, with the growing pressure of regulations and consumer demand for transparency, performing product-level LCA becomes key to:
1. Comply with upcoming regulations such as Ecodesign and Digital Passport
3. Corporate sustainability disclosure
4. Develop an effective product-based sustainability strategy
Life Cycle Assessment can therefore be a powerful method for several departments of your company, such as the sustainability, product, or marketing department.
Benefits of Life Cycle Assessment
There are a lot of benefits associated with Life Cycle Assessment which we will dive deeper into, such as:
1. Corporate reporting: LCA is used to demonstrate corporate credibility and transparency to stakeholders and customers. It can help you build the emissions inventory for corporate reporting following the Greenhouse Gas Protocol, Scope 3 reporting, and Science-Based Targets. Moreover, as we shift from GHG emissions inventories to Environmental Footprinting at an organization level, the use of LCA we be even more key.
2. Credible claims: LCA helps to communicate a company’s or a product’s sustainability performances relying on credible, scientific, and data-driven measurements. As we move towards the adoption of regulations such as the Green Claim Directive, LCA will be key to effectively substantiating any type of marketing claim regarding sustainability.
3. Identify + discover hotspots: LCA facilitates continuous improvement as the system generates actionable KPIs for each impact metric and each production process involved in the production of the product analyzed. These results help companies to understand the hotspots in their product's supply chain instantly from which they can build effective strategies to improve their footprint.
4. Quantify environmental impacts: LCA calculates the environmental footprint of products & services and makes the process of collecting and mapping environmental performance data, extracting relevant insights about the company’s footprint, and using that information to produce more sustainably easier.
5. Measure + mitigate risks: LCA determines any potential risk of existing or future products and therefore helps to make better business decisions. They know even better than humans, how to prioritize the most important impact areas. In that sense, LCA is simply good risk management.
Let’s have a look at a specific example to showcase the benefits mentioned above. The following graph shows the relevant impacts of a product with common LCA impact categories listed on the left and the production stages listed underneath. Impact categories are the environmental issues you want to measure and compare.
We can see in that example that raw materials have the highest environmental impact in the global warming category, similar to fossil resource scarcity. In the category of (product) use, water footprint can be identified as a potential business risk.
An LCA allows you to quantify the environmental impacts and identify hotspots to understand which phases contribute the most.
By understanding which phase is the most impactful on the environment you can decide where to focus your efforts to improve your product and company sustainability. It also gives a clear guideline on which factors have the highest impacts and therefore will deliver the biggest results when changed.
This knowledge can be used in the sustainability strategy of your company and can save financial resources that might have been spent on the ‘wrong’ or less impactful factors otherwise.
What can this look like in reality? Let’s have a look at another example. The following graph shows how two materials (A and B) have different environmental impacts in each LCA category on the left.
Material A in this example is a bio-based one, while material B is a fossil fuel-derived one, such as plastic. It can be common to see that the fossil fuel one scores better on global warming but has a high impact on water footprint and ozone depletion.
So if we would only focus on global warming we would miss out on the bigger picture. That’s why LCA is so significant: It provides a holistic view and fosters decision-making based on multiple categories instead of just one.
LCA makes sure we look at multiple impact areas and avoid a material change that could lead to accidentally shifting a burden to another area without realizing.
Challenges & Limitations of Life Cycle Assessment
Besides all the great benefits of Life Cycle Assessment, there are also some challenges and limitations to consider. Let’s have a look at what they are:
1. Lack of consistency in defining system boundaries & scope: The approach to the LCA study should be aligned with the goal that the company aims to achieve. However, the flexibility of the framework can also lead to a lack of consistency in the LCA outcomes for the same product system. To mitigate this issue, the use of Product category rules can be very useful (see the PEFCR or EPD PCRs).
2. Dependent on secondary data, assumptions & scenarios: When primary data are not available secondary data comes into play, which is usually an average and rarely is a good proxy to represent the actual impact of a company supply chain.
3. Lack of sufficient & qualified data: It can be time-consuming and challenging to gather new and primary data, especially in a field where not a lot of data is available in the first place.
4. Omission of certain impact areas: When conducting LCA you naturally omit certain areas of impact as LCA doesn’t measure every impact directly. Examples are deforestation, labor issues, microplastics, and biodegradability. The reason is that there isn’t a strong scientific methodology currently available to measure these impacts. Therefore LCA in its current status should be considered as a starting point and not a point of arrival.
5. Difficulty in communication & comparability: It can be challenging to communicate the benefits and limitations of LCA to non-LCA professionals. When comparing products wrong conclusions could be drawn as different studies could be conducted based on different methodologies. That’s why it is important to work with parties that built their LCA on international standards, as we did at Sustainable Brand Platform.
Which International Standards of LCA to follow?
There are several international standards for Life Cycle Assessments which are general guidelines on how to conduct an LCA. They can be downloaded for free on each represented website.
The ISO Standards 14040/44 lay the ground rules on how an LCA study should be conducted and usually all frameworks follow them.
The European Product Environmental Footprint (PEF) gives specific recommendations on how to calculate the footprint of a product based on different categories. It applies 13 categories designed specifically for fashion to make the comparison of the sustainability performance of products easier.
The Environmental Product Declarations (EPD) is a global program for environmental declarations and presents transparent, verified, and comparable information about the life-cycle environmental impact of products and services.
All mentioned standards above are the most commonly used ones in the fashion industry. When conducting an LCA with Sustainable Brand Platform you can choose to calculate your product impacts based on either the ISO, PEF or EPD standard. You can book a demo of it here.
How LCAs are done: Steps of an LCA Study
Life Cycle Assessments are usually done in steps following the 4 steps of the ISO standards guideline. First, you start with defining your goals and scopes.
Secondly, you conduct a Life Cycle Inventory Analysis (LCI) to gather data. Followed by the Life Cycle Impact Assessment (LCIA) and the Life Cycle Interpretation of the results. Let’s dive into all of them.
1. Goal & Scope Definition
This step is crucial and ensures that your LCA is executed consistently. You need to define a goal and ask yourself: What are the objectives of performing the LCA study? Who is the intended audience?
The first important LCA compound to define in this step is the function provided by the product (e.g. ‘being able to wear this t-shirt until it breaks down’), the functional unit (e.g. ‘this t-shirt is worn 100 times’) and the amount of product necessary to fulfill the function (e.g. 0.5kg of cotton). You will see functional units often at comparative LCAs of products.
The system boundaries are also of critical importance in the Goal & Scope definition phase. What should be included or excluded? What technology are you using and which geographical area to cover? What’s the time period of the data collected? Are you using any allocation procedures? Are you going to do a cradle-to-gate, gate-to-gate or cradle-to-grave analysis?
Cradle-to-gate measures a product’s environmental footprint from raw material extraction until it leaves the factory gate. Cradle-to-grave includes all the steps from raw material extraction until the product is disposed of. Cradle-to-cradle goes even further than that: It measures all stages of a product’s impact from the raw material extraction to its recycling or upcycling.
How you define all those factors will highly affect the outcome of your LCA. More restrictive frameworks like PEFCR or EPD PRCs provide clear indications on how to set up the study and how systems have those models already in place.
It might sound overwhelming, but if you decide to run your Product LCA on Sustainable Brand Platform all steps you have to take are already modelled and prepared for you in a user-friendly interface so you will cut short immensely on this decision-making.
2. Life Cycle Inventory Analysis (LCI)
In this step, you will mainly collect data and do the modelling. This involves creating an inventory of the inputs and outputs for the products that you are going to study.
A Life Cycle inventory is a list of all the recourses extracted from the earth and the emissions to air, water, and soil. This list contains thousands of lines and Sustainable Brands Platform software helps to determine them. The resources and emissions are then matched with your selected impact categories based on expected potential types of environmental impacts.
Questions you need to ask yourself are: What are your material and energy inputs? What are the waste and emissions outputs for every process in every stage that you are collecting data for and model? After you collect all the data, the calculation comes into play which involves creating your model and relating that data to your functional unit.
3. Life Cycle Impact Assessment (LCIA)
It’s now time for your environmental impact assessment which is about being able to consider the actual effects on humans, ecosystems, and resources, instead of merely tracking quantities like tons of emissions or gallons of fuel consumed as a result of production.
An LCIA method contains a set of LCIA impact categories. There are different impact methods and impact categories to choose from. If you run your LCA through Sustainable Brand Platform you will see impact categories such as global warming, land use, water footprint, fossil resource scarcity and ozone depletion.
In order to understand impact assessment, and thus LCIA, it is important to understand how LCI results may eventually connect to impacts: At the top are emissions, sometimes called stressors, because they are triggers for potential impacts.
Next in the chain are concentrations, which in the case of air emissions are the resulting contribution of increased emissions. As concentrations are changed in the environment, we would expect to see intermediate impacts.
Finally, damages arise from the impacts. These damages are also referred to as endpoints since they are the final part of the chain and represent the inevitable ending point with respect to the original stressors.
At this stage, representable results are gathered that could be communicated in that way. Optionally a so-called normalization or weighting process can be applied to this data, depending on your business case.
Normalization conceptualizes the scores and puts them into the same unit such as points to help us understand if the outcome (e.g. 0.004kg phosphorous equivalent) is much or little in comparison to a reference.
Weighting combines normalized scores into a single score based on how much importance you give each category. Instead of deciding yourself, it is recommended and more common to use the weighting factors developed by the LCIA methods.
For example, you could decide that 0.1 of global warming equals 0.1 of ozone depletion. This can be controversial and is not a very common method to use. Nevertheless, it can be helpful in certain cases if your company works with internal values of certain factors (e.g. global warming) for example, or if the PEF method is followed.
4. Life Cycle Interpretation
Last but not least it’s time to interpret the data. This is done by a Contribution Analysis to see how much each process contributed to the overall impact. For example, you will be able to see if raw materials or dying processes are creating the biggest impacts.
The Contribution Analysis is followed up by a Sensitivity Analysis to determine how sensitive the model is to different assumptions. Meaning, you will be able to see how your assumptions and choices influence your results. If you would change certain factors what would the overall result look like? They could be the same or very different.
The Sensitivity Analysis is closely related to the Uncertainty Analysis that follows to mathematically calculate your time, geographical and technological representativeness as well as precision. The outcomes of the Uncertainty Analysis give an indication of how confident you can be with your data.
To put these interpretations into action it’s important to draw conclusions, explain limitations, and make recommendations, such as ‘Brand X should consider using a renewable energy source and less water in its dying and washing processes’. So the last step of this stage should provide clear and useful information for your business and decision-making.
Conclusion on Life Cycle Assessment
While LCA has its limitations, as with any scientific method, the benefits outweigh them. It is crucial to understand how Life Cycle Assessment works, and what its capabilities and challenges are in order to gain its full potential.
By ensuring the correct usage of LCA and following international standards, LCA can be one of the most important tools for sustainability managers to consider when setting out the sustainability strategy for your company.
It is an important key solution in the transformation of the fashion industry to sustainability. Moreover, Sustainable Brand Platform’s LCA tool has the ability to meet the needs of technical and non-technical users and can be scaled depending on your company’s needs.
It is compliant with all the international standards we described above and the assessment can be conducted based on ISO, PEF or EPD methodology. You choose based on your product’s needs and our tool delivers the results in a user-friendly interface.
If you would like to know more about Product LCA and how it can be applied specifically for your business you can reach out to our Sustainability Success Team here. We are here to ease your sustainability journey.