Governance Research Digest – June 2012
This report outlines how life cycle 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. The paper looks at several value-creating business objectives, and shows how the LCA methodology can help companies achieve these goals.
- 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.
- 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.
- Resource use and its associated wastes – such as inefficient consumption of energy, water or raw materials – represent significant costs to suppliers and customers.
- 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.
- 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.