Enhancing the value of life cycle assessment (LCA)
Identify opportunities for value creation
Many organizations have traditionally pursued value creation by focusing on processes within their own four walls–labor costs, manufacturing, logistics, and the like. However, companies can create even greater value by looking at resource use in their product life cycle across the entire value chain. This can be a data-intensive process, but one that can provide both internal and external stakeholders a solid understanding of a product’s complete environmental impact, from product development, sourcing, and manufacturing through distribution, marketing, use, and disposal.
Assessing end-to-end environmental impact
Resource use and its associated wastes—such as inefficient consumption of energy, water, or raw materials—represent real costs to suppliers and customers. There are daunting challenges with unlocking the value that is “trapped” upstream in the supply chain with suppliers and downstream with product use and disposal habits.
One compelling toolset that can be used to identify the areas of an end-to-end product life cycle that represent the biggest potential opportunities for additional value creation is Life Cycle Assessment (LCA). LCA has long been used to quantify environmental impacts, but if used in the right way it can also support broader business objectives including:
- Enhance brand value for competitive differentiation
- Improve product and process design decisions
- Inform procurement strategies and supplier engagement activities
- Identify cost-savings opportunities throughout the value chain
- Meet sustainability communications needs (e.g. product labeling, stakeholder outreach)
- Achieve compliance
In this paper, we outline how LCA can be used to assess the end-to-end environmental impact of a business decision on overall value creation.
Strategy & Operations