New Bottom Line Volume 5.3 – From Life Cycle Assessment to Life Cycle Thinking

January 30, 1996

Every action your company takes–purchase decisions; using equipment or materials; making investments–triggers a chain of events within your company, in the surrounding community and beyond that has real consequences on the well-being of people, land, air and water, plants and animals, and generations to come. These in turn have consequences on the future of your company itself.

You walk into your office and turn on the lights. You’re spending money and using energy. What’s the source of the energy? Coal? Oil? Natural gas? Nuclear? Solar? Wind? Each has different impacts on job creation, air and water pollution, land degradation and the trade deficit. How efficient is the light? (Amory Lovins estimates that its overall efficiency, from fuel to powerplant, from transmission lines to your light bulb, is on the order of one to three percent.) Are you paying for two to ten times the energy you need to do the job?

You purchase supplies, or a order equipment. You’re spending money and using resources. Where are they made? Do they support jobs, businesses and tax base in your region? in the US? in other countries? Does their production use resources extravagantly, or create unnecessary pollution? Are they recyclable? Are they made of recycled materials? What impacts does this have on your people? What will the equipment cost to operate–in both money and energy–over its lifetime? How will you dispose of it? Landfill? Recycle? Repair? Remanufacture? What impact will these each of these choices have on jobs, profits, environment?

You decide to invest in a company. Do its activities support or challenge your goals and values? (Do you have a reliable way to find out?) What sorts of energy and resources does it use? What sorts of “wastes” does it generate? What sorts of jobs does it create? or eliminate? Where? Where are that company’s suppliers located? What are the consequences of their actions?

These questions are not just matters of altruism. The practices of the other members of your company’s “food chain”–its web of suppliers, distributors and customers–affect not only quality of life, but also their own economic viability–a matter of direct self-interest to your company. And as a very wise person once said, in the big picture, altruism is self-interest.

Increasingly, companies with strong environmental programs and rigorous procurement standards are including environmental criteria in those procurement protocols. The emergence of international environmental standards is making environmental performance a condition of doing business, regardless of the outcome of political deregulation fever.

Life Cycle Assessment (LCA) is one tool increasingly used to systematize these efforts, through the comprehensive analysis of environmental impacts across a product’s entire life cycle, “from cradle to grave”. LCA is an imperfect and still maturing tool, still lacking a standard methodology and dependent on data that is imprecise at best, unavailable at worst. Many past LCA efforts have shown an unfortunate, if coincidental, dependence on initial assumptions–witness the flurry of LCAs that tried to resolve the “paper or plastic” dilemma, and whose conclusions seemed to correlate remarkably well with the particular industry that financed the particular study.

These shortcomings should lessen, as the ISO 14040 LCA standards take shape, as LCA software tools mature, and as well-validated databases develop. A growing number of large corporations are applying LCA methodologies as a design aid, to help sift through material, design and process choices. It’s an expensive process, still beyond the reach of smaller firms, and one more given to guidance than definitive answers. But then again, much of life and business is like that.

But even without a commitment to a formal life cycle analysis program, your company can still apply life cycle thinking to its design, purchasing and operations decisions. Start by examining your most significant inputs (energy, water, raw materials, equipment, supplies, finished goods); outputs: (products, product use, and non-product outputs); and processes (focusing first on those with the largest inputs or outputs);

For each, consider the direct impacts of your actions, and then move “upstream” and “downstream” to look at the impact of the actions of the companies you do business with, and further to the companies they do business with, and the companies they do business with, and so on. Consider the choices your company can make that can improve profitability, reduce environmental impacts, and increase resilience–for both your company and for the rest of your food chain–in the face of inevitable change.

The effort may not always produce decisive quantitatively-based answers (and without them may risk counter-intuitive pitfalls). But it will bring new insight and strategic perspective to your company–useful allies in the changing competitive landscape.

(c) 1996 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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