Organisations have traditionally looked to create value by focusing on internal processes - things like labour costs, manufacturing and logistics. But according to a white paper from Deloitte, companies can create even greater value by looking at resource use in their product life cycle across the entire value chain.
Life Cycle Assessment (LCA) may not be easy and can be a data-intensive process, but it gives an in-depth understanding of a product’s environmental impact, from product development through to disposal. It can reveal resource use and associated wastes, such as inefficient consumption of energy, water or raw materials, representing real costs to suppliers.
According to the white paper, while LCA has long been used to quantify environmental impacts, it can also support broader business objectives including:
- Enhance brand value for competitive differentiation
- Improve product and process design decisions
- Inform procurement strategies and supplier engagement activities
- Identify cost-savings opportunities throughout the value chain
- Meet sustainability communications needs (i.e. product labelling, stakeholder outreach)
- Achieve compliance
The paper looks at several value-creating business objectives, and shows how the LCA methodology can help companies achieve these goals.
It’s an interesting paper because it raises the prospect of using lifecycle assessment as a primary means to identify process and business inefficiencies. It puts what was a means of environmental impact at the heart of a company efficiency assessment, which has to be a good thing. If we can get sustainability or environmental tools like LCA at the heart of business then it will significantly raise awareness across organisations as a whole.