Life Cycle Assessment explained
When you are figuring out how to make your business more sustainable, Life Cycle Assessment (LCA) is the way to go. But how does it work exactly? This guide will give you an overview of the methodology with as few technical terms as possible, after which you have a grasp on how it works and why it is the best tool for making well-informed decisions.
PUBLISHED: 28 July 2022
WRITTEN BY: Gijs de Mol
What is Life Cycle Assessment (LCA)?
Simply put, LCA is a comprehensive input-output analysis where all environmental impacts of products and services are measured throughout their entire life cycle. The inputs consist of all raw materials and resources, energy, water and transportation, and the outputs consist of waste and emissions to air, water and land.
LCA is standardised by the International Organization for Standardization (ISO) under ISO 14040 and 14044 in the ISO 14000 family for environmental management, making the methodology very reliable and transparent. According to this standard, the aforementioned life cycle can be divided into five stages:
1. Extraction and pre-processing of materials
2. Processing and manufacturing of products
3. Distribution from suppliers and to consumers
4. Usage of products
5. What happens after products have been used, i.e. waste treatment
These steps are not set in stone, but it is certainly wise to always take them as a starting point when formatting your LCA framework.
Why would you perform an LCA?
LCA can be seen as the ultimate tool for companies to figure out how to become more sustainable. So logically, it has many benefits which we will briefly outline for you.
The first benefit is the most obvious one, namely for the development of new products. With LCA, you are able to identify exactly in which parts or even materials the greatest impact occurs. This allows you to accurately target the environmental performance of products in the design phase, by choosing sustainable materials, designing for longevity and reuse of products and parts.
Another benefit is that LCA helps you to comply with regulations. A lot of tenders nowadays require companies to disclose the environmental impact of their products, for which you need to conduct an LCA.
The third reason for LCA revolves around the benefits that can be gained for supply chain management and procurement. After carrying out an assessment, supply chain managers can purposefully choose the most sustainable supplier and logistical partners.
Next benefit is for marketing and sales, for which LCA is crucial. Without it, you can’t communicate your environmental performance with your customers, otherwise you are greenwashing. But when you do perform an LCA, you can compare your products with competitors and create a competitive edge over them.
Finally, the importance of LCA for strategic sustainable management. Because for a company to really make a positive impact on the environment, it needs to be driven from the top management level. This way, sustainability can really be incorporated into a company’s strategy, or even into their business model.
The four steps of LCA
The ISO 14040 and 14044 standards describe four main steps for conduction of an LCA:
1. Goal and scope definition
2. Inventory analysis
3. Impact assessment
4. Interpretation
In an ideal scenario, the four steps would follow each other neatly, but this is rarely the case. As you can see in the picture above, LCA is an iterative process in which things are constantly refined as you go along. However, because we have embedded the four steps into our Root methodology, you don’t have to worry about these steps too much. Let us explain per step how we have done this.
Step 1: goal and scope definition
In this step, you first determine which product, service or system you want to assess. The basic question that you need to answer is: what and how much are we going to assess? Then, you have to define the goal of the study by formulating the target audience and intended application. And as a final step you formulate the scope of the assessment by describing the level of sophistication of the study in relation to the goal.
As answering these questions requires some form of expertise, Root will take care of this for you. Our aim is to always assess your entire business, meaning all products and services over their entire life cycle with the objective to reduce your environmental footprint.
Step 2: inventory analysis
In essence, this is the data collection of the LCA, also known as the Life Cycle Inventory (LCI). By collecting and organising all inputs and outputs, you gather everything that flows in and out of the system. Organising your data collection is important to ensure that the environmental impacts can be easily calculated and interpreted in the following step. Examples of inputs are the raw materials of products or the energy consumed in the factories, and examples of outputs are residual waste streams from factories or end-of-life treatments for products.
When using Root, this step is much more simplified. All we ask you to do, is that you gather raw data from your management systems and import it through our intuitive onboarding modules. We then organise the data for you so that we can convert it into interpretable impacts in the next two steps.
Step 3: impact assessment
Now that all data has been collected and organised, it is time to apply meaning to it. Within the ISO 14040 and 14044 standards this step is better known as the Life Cycle Impact Assessment (LCIA), which includes a set of mandatory steps that are required for this step. First, you make a selection of impact categories – what impact would you like to measure? Then you classify the data in the LCI, assigning it to our defined impact categories. And lastly, the two are combined to calculate the environmental impacts.
Luckily, nowadays, these steps are largely standardised into comprehensive LCIA methods and LCI databases. At Root, we use the internationally recognised LCIA method ReCiPe and the LCI database Ecoinvent, the world’s most commonly used combination for LCA.
Step 4: interpretation
The final step of the assessment is the interpretation, but as aforementioned, doesn’t necessarily only have to happen at the end of the assessment. Nevertheless, once all data is in place, the interpretation of the assessment is most accurate. The objective basically is to come up with conclusions, limitations and recommendations.
At Root, this has been incorporated into our smart software solution. Conclusions can be drawn up by means of our customly developed dashboard that allows you to interpret your results in the most clever way. On top of that, you can use our scenario builder to help you to analyse alternative scenarios to improve your environmental impacts and come up with recommendations.
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