Carbon Accounting is essential, but is that all you need?
Carbon Accounting is Essential but Incomplete. Below are 5 ways that your organization will benefit from adding Life Cycle Assessment to its sustainability toolkit.
Of course, you’re probably already using LCA data to help with your carbon accounting, because LCA databases are a great source of data on the carbon footprints of goods and services in your supply chain, which drive your greenhouse gas Scope 3 footprint. But this is only the beginning of the value that LCA is ready to bring you.
1. Coming soon to a business transaction near you Your customers are coming for your LCAs, not your carbon footprint. Last year I participated in a meeting involving over a dozen sustainability leads from major brands in the IT sector. They took turns lamenting the difficulty of obtaining supplier-specific carbon footprint information.
It wasn’t that their suppliers weren’t trying to supply them with data. The problem was that all the suppliers could offer was their own firm-level (or sometimes facility-level) carbon footprint information. “It’s so irrelevant that we end up using generic [industry average data from databases] instead.”
The point is that your customers don’t buy from you, they buy specific products from you. When they make the step to truly trying to manage and reduce their own GHGs, and not just report on them, that’s the day they switch from wanting to know your carbon footprint to needing data specific to the products or services they buy from you. And on that day you need LCA.
2. Progress is the new green
A friend of mine runs a start-up manufacturing company. I asked him why his cash-strapped firm spent time and money on LCAs for their products. “Because our customers require it” he said. But that just deepened the mystery for me. “Why are they requiring it?” I asked.
“They’ve set all these targets on climate, and now they need to show progress on them. These people’s salaries are tied to achieving progress. If our product is greener than average or getting better, it’s an easy sell.”
3. Actionable granularity
Your carbon footprint is informative. It tells you whether your supply chain, your electricity purchases or your own emissions are dominating your footprint. And if you’re like most companies, the answer is your supply chain. And that’s when the challenge arises.
Your carbon footprint analysis might tell you which of the purchased inputs to your business are driving your footprint. But again, if you’re like most businesses, that tells you a lot more about your problem than how to solve it. You buy inputs to produce products or services. Which ones use how much of the high-footprint inputs? That requires product-level insights, not firm-level. As my startup manufacturing founder told us, our products need to be greener than average in their category, and/or getting greener. Even if our first approach to footprint reduction is to switch to renewable electricity, we need to be able to translate that into product-level good news, and that’s what LCA does for you that carbon accounting doesn’t.
4. Make Things Better, Not Worse
What LCAs can also show us, that company-level analysis misses, is this: products and services are all about function. GHG accounting is all on a per-year basis. Product-level assessments are all per unit of function. There’s a big difference, and improvements to your annual footprint (GHG accounting) could actually hurt the competitiveness of your products.
Let’s say you substitute one material input for another to reduce your carbon footprint. If this change lowers the durability of your product, then product-level sustainability will immediately raise a red flag – and one that’s correlated with customer satisfaction and quality. Since you sell products, not operations, you need tools to improve what you sell, not just how you operate.
5. Broaden Your View to Include the Future
Climate-related performance is Job 1, no question about it. But then comes Job 2, and Job 3. Impacts including biodiversity and water are rising to the top of the agenda for many reporting initiatives. Companies I know have targets for climate, and now they’re setting targets for resources and biodiversity. At the risk of mixing metaphors, progress is going to stay the new green, but it will also start to come in multiple colors.
And with LCA in your toolkit, you’re responsive to the customer’s data needs, you’re delivering progress tied to product function, and you're speaking the language of the present and the future. More power to you!