Clarkston Consulting
Skip to content

The Value of Life Cycle Assessment

Earlier in our blog series “The Dimensions of Doing Good”, we discussed how transparency is created through Life Cycle Assessments (LCAs). Today, Jake Appelbaum has revisited this topic, sharing insights about the use and value of LCAs both today and in the future: Firms are increasingly asking two questions, “How can I show sustainability to my customers and shareholders?” and “How are my environmental initiatives creating value?” Corporate sustainability measures are reaching a tipping point, and increased scrutiny will most certainly follow.

Current Use

Life Cycle Assessments (LCAs) are an important tool for firms to analyze the economic and environmental impact of a product’s end-to-end processes. Each step of a life cycle is examined, ranging from raw material extraction to end-product waste or recycle. Sustainability initiatives have historically promised many returns: cost savings from decreased consumption, improved brand value, and greater visibility to design decisions. The output of a Life Cycle Assessment can quantify and demonstrate these returns. Current demand for LCAs is primarily driven by internal alignment and costs savings. Firms moving forward with environmentalism often do so in silos. LCAs have pushed companies to develop an enterprise-wide strategy when pursuing sustainable practices. Additionally, LCAs have been used to uncover opportunities for greater regulatory preparedness, risk mitigation, and environmental consciousness.

Value to Firms

LCAs provide many benefits to firms by offering deep analysis about customer demanded information. One major value of an LCA is advanced visibility and decision making in regards to supply chain. LCAs can also offer greater insight into the environmental impact of a product. For example, companies in the pharmaceutical industry often use chemicals in their manufacturing process that must be disposed of properly. Understanding the supply chain as it relates to a product’s end-of-life and corresponding waste can lead to safer and more conscious disposal. Another value of LCAs is their use in stakeholder engagement. LCAs can be a very powerful and reliable communication device to display sustainable prowess. They can be used to justify business decisions, from obtaining raw materials to modifying a specific operations process. And with an increasingly environmentally conscious end consumer, LCAs can support and defend environmental claims.

Expectations and Outcomes

LCAs can be an expensive and difficult undertaking if not tailored properly. Firms must first look internally to marry their business objectives with their expectations for sustainability. An assessment should then be tailored to fit the firm’s specific industry and profile. It is critical to establish scope and expectations to better match investment and time with what the company needs. Look to see LCAs increasingly become a centerpiece for companies to seize the benefits of sustainable practices. Given proper expectations and scope, a tailored Life Cycle Assessment can create opportunities to increase environmental sustainability and consciousness.