PE International, SolidWorks, PwC and WSP Environment & Energy are among the companies poised to benefit from growth in the lifecycle assessment (LCA) software sector, according to a report by analysts Verdantix.
A flood of new software in the product LCA category will help firms improve their environmental impact, with demand picking up in 2012, Verdantix said – but the sector will remain a niche market, the analysts said.
The study, Smart Innovators Product LCA Software, identifies 18 innovators now active in the market. These range from specialists to consulting firms, and include Bluehorse Associates, Bureau Veritas, CleanMetrics, e3 Solutions, EcoMundo, Granta Design, ifu Hamburg, National Institute of Standards and Technology, PE International, Pré Consultants, PTC, PwC, Quantis, SAP, Sinum, SolidWorks, Sustainable Minds and WSP Environment & Energy.
More than a dozen suppliers have rushed into the product LCA software market in the past two years, Verdantix analyst and report author Emilie Beauchamp said. In 2010 investors put more than $20 million into new ventures and growth capital for existing players.
Beauchamp said that so far demand for the software has been patchy, the market has lacked direction and price points have been low, as little as $85 per month. But Verdantix expects demand to pick up next year due to new regulations on Scope 3 emissions reporting, as well as a growing focus on green procurement and evidence of the business value of LCA projects.
“For the last two years an influx of new product LCA software and services suppliers have tried to stimulate market demand,” Verdantix director Rodolphe d’Arjuzon said. “The green shoots of demand for product LCA solutions are just starting to poke through a muddy patch in the market. Growth will continue to evolve slowly in 2011 until more powerful market drivers boost demand in 2012. Our research suggests that product LCA software will remain a niche market.”
Europe leads the world in setting standards for product sustainability, Verdantix said, with regulations such as REACH and the French government’s Bilan Carbone, which requires Scope 3 emissions data reporting by the end of 2012. France will become the leading market for LCA software, Verdantix said.
Supply chain “power players”, such as global food retailers and public procurement agencies, will put a particular emphasis on improving the sustainability and cutting the cost of their purchasing decisions, the report said. For example, Unilever has been performing product LCA studies on margarine, tea and ice cream. Such investments will flow upstream to encourage sustainable agriculture practices, Verdantix said.
Many companies are using LCA applications in an attempt to differentiate their products, the report added. Michelin has used the software in the design of its Green X tires, which help reduce fuel consumption. Flooring manufacturer Shaw Industries drew upon product LCA studies to design its Shaw Nylon 6 products, which can be recycled into new carpets and rugs after use.
DS SolidWorks sustainability product manager Asheen Phansey says manufacturers must use the most rigorous lifecycle assessment tools they can afford as soon as possible, rather than waiting to carry out more robust exercises.