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Focus on Sustainability Getting ROI from LCA: Lessons learned "What's the ROI?" That is the question being asked as your internal discussions start to focus on lifecycle assessment and environmental labeling. How can you capitalize on the potential savings and profit that can be gained by understanding all the impacts throughout your product's lifecycle, creating sustainable value chains and bringing green products to market? Carbon = Money Bringing green products
to market means ROI for your company. Global food and drink maker
PepsiCo learned that as it looked into the value chain for its
Tropicana brand of orange juice. And according to the company's
Director of Sustainability and Technology Tim Carey, there is one
lesson to be learned when it comes to the ROI in LCA: "Wherever
there is embedded carbon, there are embedded dollars!" And to
find where the hotspots of carbon emissions are along your product's
supply chain, start with a lifecycle screening. Use the Media Fortunately about that
time, Tropicana got a helping hand from the media, anxious to
cover corporate "green" initiatives. In January 2009, the New
York Times published,
"How Green is My Orange?", a feature on PepsiCo's carbon
measurement initiatives with Tropicana. In a matter of days, a
supplier of carbon neutral fertilizer made contact with PepsiCo and
presented a solution to its high-carbon fertilizer problems. The
fertilizer solution was then picked up by Time magazine in its
spread, "Sustainably Squeezed?". Collaborate with partners Another hotspot in
Tropicana's lifecycle was distribution phase of its finished product
due to road transport. PepsiCo looked into finding solutions for its
transport system and subsequently got much of its fleet partners on
the EPA's
SmartWay program, which provides a step-by-step guide to
saving money and reducing fuel use. The partners were provided
with incentives from PepsiCo to engage in the system and each
partner realized significant savings. The debate over the risks and rewards of labeling
consumer products to communicate environmental impacts is poised to
heat up. What will an ecolabel measure? Does it mean anything to the
consumer? Aren't there enough labels already? How will it be
regulated? Is it too costly for business? Will mandates be passed?
Heading towards mandates Labeling mandates are on the horizon, but no
country has packaged and passed a feasible legislation concerning
EPDs. France is the first country to set an EPD agenda according to
its Environmental Roundtable, or Grenelle de l'Environnement.
Originally the mandate was set to take effect as of January 2011;
and although France's legislative body adopted the Grenelle bill
(that outlines the environmental/carbon declaration scheme), it also
voted to postpone the start date to July 2011. The program will be
in a trial phase for one year prior to rolling out to all sectors of
FMCG products. Responding to Industry Pressure In addition to creating a leaner, cleaner business, a major motor for measuring environmental impacts of products comes from industry pressure. Clients are asking for data and a growing consumer base is becoming increasingly aware of ecological products. An EPD is essentially a marketing and communication tool to provide reliable information to consumers in order to make informed purchase choices. Capturing this slice of the market, comprised of consumers with an above-average monthly disposable income, can be quite tempting. Manufacturers and retailers, however, must be aware of the risks to potentially reaping these rewards. Consider the 90/10 rule. Some 90% of the analysis and results needed to make substantial and profitable changes in your supply chain can be attained by doing a product carbon screening, but it is this additional 10% of data and measurement that is required use an EPD. The downside to this rule is that the 10% necessary for ecolabelling is going to cost 90% of the entire budget. Isn't it enough to have 90% of business benefit for just 10% of the cost? Or, is it worth it to start measuring products
now in preparation for potential mandates? The lifecycle of a product serves as a start-to-finish investigation of each step in the production of the product, its use and its disposal. The sum of these phases is the lifecycle. A lifecycle assessment is a useful method to understand every opportunity for change or reduction in relation to waste, ingredients, packaging, transport, energy, operational improvements, improving supplier collaboration and more. Two methods of lifecycle assessments have emerged: simplified and full LCA. Simplified Lifecycle Assessment Simplified lifecycle assessment, or a screening, of a food product means that you measure and manage a smaller yet highly relevant amount of data related to a product's lifecycle impacts. A simplified lifecycle analysis emphasizes the use of secondary data, or "readily available data", to measure lifecycle impacts. Secondary data is published by industry, academic institutions, or governments. With a simplified tool, a product's lifecycle is screened for hotspots, taking a comprehensive big-picture approach that provides a high-level understanding of where its biggest impacts are found. With Carbonostics, impacts are revealed in terms of cost, carbon as well as nutrition. Full Lifecycle Analysis A full LCA emphasizes the use of primary data to render the precise measurement of environmental impacts throughout the lifecycle. Primary data is the observation and measurement of activity generating environmental impacts collected directly at the source - at the farm, from the exhaust pipe or in facilities. A full lifecycle is scientific and the use of such methods requires experts to run. Full LCA software and implementation is reputed for being as complex as it is costly. Screen as a first step Both methods have their place in corporate sustainability initiatives. Industry experts and leaders agree, however, that a product screening should be the first step in environmental impact measurement efforts. The PAS2050 Guide, co-published by the UK's DEFRA, Carbon Trust and BSI, promotes the use of simplified tools: "To decide whether an emission source is likely to be material, it helps to do a high-level footprint analysis using estimates and readily accessible data. This analysis includes the full lifecycle of the product but relies on estimates and generic data to build a high-level footprint. Significant sources of emissions can later be replaced by more specific data." Click here to download the Guide to PAS2050. A simplified LCA or screening will provide a company with 90%-95% of the essential information needed to make substantial and profitable changes in a product lifecycle and value chain. A screening is much less costly than a full LCA. "Don't let the perfect be the enemy of the good!," is a resounding comment expressed often in debates over the two types of data - primary and secondary - and methods. A product screening will indentify the hotspots in the lifecycle and a company can then decide whether it is necessary to dig deeper into that 5%-10%. Take a hybrid approach with Carbonostics Carbonostics is a smart lifecycle
assessment tool because it allows user to screen with the
Carbonostics Database of over
1300 data points for food, or to input their own proprietary data -
or a combination of the two. |
Data topics Complete carbon emissions database Committed to data transparency Updating your analysis with new data
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