Deloitte: Life Cycle Assessments Can Add Value

by | May 31, 2012

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Life cycle assessments are an important tool for firms trying to identify the areas of a product’s life that offer the largest potential opportunities for cutting costs and creating value, according to a report by consultants Deloitte.
Enhancing the Value of Life Cycle Assessment outlines how such assessments can be used to identify potential efficiencies across the entire product life cycle, from development, sourcing and manufacturing through distribution, marketing, use and disposal. Many organizations have traditionally pursued value creation from sustainability by focusing on internal activities, but some companies are now realizing that the majority of their environmental impacts lie within the supply chain, the report says. Resource use and its associated wastes – such as inefficient consumption of energy, water or raw materials – represent significant costs to suppliers and customers, according to Deloitte.
A common goal of many sustainability projects is to reduce costs. LCA can help companies see which areas of the lifecycle have the greatest potential for improved operational efficiencies. Deloitte uses the example of a global media company that asked it to assess the carbon footprint of its DVD and Blu-ray disc manufacturing, particularly its packaging. Through this analysis Deloitte found opportunities to reduce the amount of plastic in the packaging and change transport options. The company cut its raw material consumption by 13 percent, reduced its transport emissions by 20 percent and saved $40 million in the process.

Using such an approach can also enhance a company’s green branding, according to the report. One company that produces plant-based milks used an LCA to compare the environmental impacts of its products with those of conventional milk. It now uses those results as part of its advertising campaign, promoting both personal and environmental benefits of its products.

Deloitte says that life cycle assessments are also useful for improving design, procurement, communications and achieving compliance.
A video offering a six minute “crash course” in life cycle assessments can be watched here. It features highlights from a 90-minute lecture given to design students in Melbourne in 2011.

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