Lifecycle analysis – the practice of measuring the environmental impacts of a product from its raw materials, through transport and processing, to consumption and disposal – is become an increasingly accepted practice in the FMCG industry. Lifecycle analyses (LCA) can seem pretty complicated and even scary-looking.
The ROI on LCA is proven
One of the reasons why it feels so scary to companies is that they often don’t view products in an (almost) linear fashion. Their procurement departments work independently from their brand managers, and their R&D teams don’t discuss details with their logistics department. So, developing a sideways view of a product, from start to finish (cradle to grave, farm to fork – choose your favorite analogy), often seems like an overwhelming task. And it’s true that this is most often one of the hardest parts of performing an LCA, but it’s extraordinary beneficial to the business and almost always results in supply chain optimization that would not have been identified without this new viewpoint. The ROI on this “mapping” step of the lifecycle is proven.
De-mystifying the complexity
Another common misconception is that everything in the lifecycle needs to be precisely measured and accounted for in order to get meaningful results out of the analysis. And while that’s true if you’re conducting a 2-year groundbreaking research study that is going to revolutionize the production of <choose your favorite raw material or ingredient>, in many cases averages and peer-reviewed studies will work just as well. Knowing the energy usage of a greenhouse in a Denmark and the emission factors of various sources of energy (coal, oil, water, nuclear), will give you enough information to fairly accurate estimate the energy usage of a greenhouse in Iowa. Having a credible source of data for emissions from different types of transports will be enough precision to use in almost any model about transport anywhere in the world – a truck in Germany emits about the same emissions as the same truck in Argentina.
The objective determines the method
The other big decision that needs to be made is “WHY?”. Depending on the answer to “Why are we doing an LCA?”, there are many different approaches and outcomes in addition to the reduction of environmental impacts:
|Compliance (client)||Whatever the client wants||Keeping the client happy|
|Compliance (govt)||Whatever the govt wants||Avoiding fines|
|Supply chain||Simplified LCA||Reduced cost & waste|
|Consumer Communication|| |
Certification or labeling
So, “WHY?” is a very important question. Some companies start with compliance, try consumer communication, and end up working on supply chain optimization. Some start with consumer communication and then get into supply chain optimization. Some start with supply chain optimization and when their clients come calling for data, they’re ready and knowledgeable about their lifecycle impacts. In almost every instance, supply chain optimization is where the money is, and therefore where the motivation ends up making the most sense. (The research is fairly clear regarding consumer communication – environmental labeling doesn’t do much for a brand’s value, can sometimes even cause credibility issues, and only 5-10% of consumers even read labels).
Optimal to integrate LCA in R&D
And once the supply chain has been tackled, the next logical step is R&D. When designing and testing new products, it becomes natural to include environmental impact in feasibilities studies. It’s great to have a really low carbon chocolate bar, but if it’s too expensive to make or buy then it’s not going very far and you’ll be way off your financial targets, or a very low carbon ready meal, but if it doesn’t have enough nutritional value then you’re not meeting your social requirements either. So, ultimately there will part of every R&D cycle that tests environmental impact in each and every product in much the same way that all the other needs of the business are tested.
Insist on LCA data transparency
Until then there are ways to produce a lifecycle analysis on existing products that identify improvements in the supply chain that make money for the business and do not cost a lot to run. An efficient method to look for is a “simplified LCA” or “hybrid LCA” or even “LCA screening” tools. There are an increasing number of more affordable, simplified web-based applications on the market and, in comparison to complex and time- and resource-intensive Excel methods, these work best for practicality and easy integration for cross-functional groups.
Also, be sure to insist on transparency and simplicity in your results to ensure that there is no “black box” effect happening that prevents in-house teams from capitalizing on all the outcomes of the analysis.
Finally, know that the mapping exercise is only scary once. Just as we insist that our children try things once in order to learn that, in fact, it isn’t so scary, we also have to try everything at least once and tackle a mapping exercise in order to see that the benefits greatly outweigh the fear.
Sara Pax is the president of Bluehorse Associates, a developer of environmental sustainability metrics specialized in the food and beverages industry with its smart product-level lifecycle assessment tool, Carbonostics (cost + carbon + nutrition). www.carbonostics.com