Assessing Environmental Impact With LCA
Organizations meet increased pressure to disclose their environmental impact. A Life Cycle Assessment (LCA) is a standardized methodology that quantifies this impact, providing data for organizations to address the increased demand.
Increased need to quantify environmental impact
Organizations are under increasing pressure to be transparent about their environmental performance. Firstly, the legal reporting requirements are becoming ever stricter, which is illustrated by e.g. the upcoming EU Corporate Sustainability Reporting Directive (CSRD). When fully implemented, the CSRD will make it mandatory for 50 000 companies in the EU to perform sustainability reporting, compared to 12 000 under the current directive. Secondly, the pressure from the general public increases, as consumers become more environmentally conscious. Thirdly, these factors also create demands from OEMs and system integrators, which are required to report on their suppliers’ environmental performance. An LCA generates data and analysis that could be used for this kind of disclosure.
“[...] mandatory for 50 000 companies in the EU to perform sustainability reporting […]”
Determination of environmental impact using LCA
The LCA methodology is a global standard used to quantify the total environmental impact of a product, taking its entire lifecycle into account. This is done through collection and analysis of information about the required inputs of materials, energy etc, and the generated outputs, such as waste and emissions. Hence, LCAs can be used by organizations to better understand where in the value chain and in what processes their environmental impacts occur, and how these can be mitigated.
The value and usage of LCA
LCAs can be utilized to generate both internal and external value. Internally, organizations can conclude on insights to guide sustainability efforts within e.g. product development, manufacturing, or reviewing purchased goods from suppliers. The insights therefore help to identify where environmental impacts can be mitigated. Externally, the most important LCA usage for many companies will be to meet the demands that OEMs or system integrators put on them as suppliers. The LCA results can also be used to promote sustainability performance towards consumers or to show how environmental product declarations or certifications are fulfilled.
Whether being demands from regulations, consumer behaviour, or organizational development, there is a significant need to disclose environmental impact. The LCA methodology is an essential tool in providing these insights, and organizations must decide on how to incorporate LCA in developing their sustainable business. Triathlon can support in performing LCAs to help clients better understand their environmental impact.