lca and natural capital in product design - sphera
TRANSCRIPT
LCA and Natural Capital
Accounting (NCA)
in product design
Julie Raynaud - TRUCOST
Lise Lyngfelt Molander - thinkstep
Today’s speakers
Trucost
Senior Research Analyst
Thinkstep
Director, Strategic Accounts
Principal consultant
Julie Raynaud Lise Lyngfelt Molander
thinkstep• thinkstep enables organizations
worldwide to succeed sustainably.
• Our industry-leading software, data
and services help businesses drive
operational excellence, product
innovation, brand value and regulatory
compliance.
• With a global presence in 19 countries
we serve more than 2,000 companies,
including 40 percent of the Fortune 500
such as BASF, Hewlett-Packard,
Interface, Siemens, Unilever and
Volkswagen.
Trucost• Delivered the world’s first public
Environmental Profit and Loss Account, PUMA
• Other Profit and Loss Accounts include:
Yorkshire Water and Novo Nordisk
• Study for TEEB for Business Coalition
estimating the natural capital cost across a
range of business sectors at a regional level. It
demonstrates that some business activities do
not generate sufficient profit to cover their
natural resource use and pollution costs.
• Is leading the development of the Sector’s
Guide (Food and Beverage and Apparel) as
part of the Natural Capital Protocol
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Feedback from the participants
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37%
56%
7%
What is your experience with Natural Capital Accounting?
I don't know anything about it
I know something about it
I have experience but I'mstuggling to implement it
Agenda
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1. Presentation of todays webinar
2. LCA and NCA – how can it create value
3. Basic steps for a NCA
4. Business cases
5. From LCA to NCA – live demo
6. Q & A session
Why Use Life Cycle Assessment?
1
2
3
Enables You To
Quantify the environmental performance – holistically and systematically
Compare environmental impacts at each stage of the product’s life
Benchmark and compare environmental impacts between products
RAW MATERIALS
MANUFACTURING
PACKAGINGDISTRIBUTION
USAGE
DISPOSAL
LCA
To develop more sustainable products and resilient supply chains
Life Cycle Assessment
Cradle Grave
Examples of LCA’s Success• One of several decision support tools considered “best practice” in measuring environmental performance• Specified in rating and sourcing systems (e.g., green buildings, product standards)• Numerous commercial software systems• Thousands of practitioners
To what extent does your business depend on the environment? How much of the
resource is available?
How is environmental performance linked to financial performance?
Sustainable Product
Development
Evolving considerations in sustainable product development
Some Current Challenges with LCA
Survey Question 1. What kind of challenges do you have communicating LCA results to others in your business?
Except for the sustainability team and LCA practitioners, most business people do not readily understand LCA study results
LCA results are not easily understood by:
25%
29%
28%
18%
Other stakeholders?
No one
Other business functions?
The wider sustainability team?
Some Current Challenges with LCA
Survey Question 2. How well are you able to weigh trade-offs using LCA results?
Over 80% of survey respondents are unable to sufficiently evaluate environmental trade-offs in different scenarios
29%
18%
53%
Use existing methods, which areinsufficient
Use existing methods, which aresufficient
Unable to weight trade-offs
Some Current Challenges with LCA
Survey Question 3. Are you able to consider regional resource availability or scarcity with your LCA results?
Over 60% of survey respondents think its important to consider regional resource availability but are unable or have insufficient information to do so
53%
31%
5%11%
Unable
Able but insufficient information
Able and have sufficient information
Not important
CORPORATIONS
SOVEREIGNINVESTORS
NGOs
MULTI-STAKEHOLDER GROUPS
Scale • Enterprise-wide• Supply Chain• Product Category or
Brand Portfolios• Products• Technologies• Site or Facility level
Trends in Natural Capital Valuation
Our General LCA Valuation Approach
For each mid-point impact
LCA mid-point impacts
Climate change
Acidification
Eutrophication
Ozone creation potential
Human toxicity
Eco-toxicity
Water consumption
etc
Results in physical terms
Results in monetary terms
Investigate the characterization
model
Define the scope
Identify the valuation technique
Develop and apply the valuation
Calculate and aggregate the
results
1 2 3 4 5
What impact do we want to capture?• Health impacts• Impact on forests• Impact on crops• Etc
How does the model calculate the considered mid-point impact?
Is the valuation going to be geographically specific?
What is the most appropriate valuation technique given the budget and data available?
Shall we integrate end-point models?
Reflects the damage impacting society and human well-being, expressed in
monetary terms
Extending Insights from LCA Studies
Natural Capital Valuation
• Which impacts are most material• Which environmental trade-offs are
more important in design or optimization schemes
• Understand regional sourcing or production risks (for example, related to water scarcity)
• Allows businesses to integrate the LCA results alongside standard business metrics (e.g., profit, margin, etc.)
• Allows businesses to communicate the results to a general audience not expert in LCA or sustainability
• One common metric for all environmental impacts allows for comparison
• Links the regional availability or scarcity of the natural resource to its use,
• Provides results in standard monetary, business terms
Provides these business insights
Example 1: Evaluating a cell phone take-back program
Business Implications: Recycling has significantly lower environmental impacts overall, compared to other disposal options
What is the environmental and financial ROI of a cell phone take back program?
Example 2: Optimizing T-Shirt Design and Production
Business Implications: Focus product optimization and sourcing efforts on reducing greenhouse gas
emissions, followed by air pollutants
Which type of environmental impact is most material?
Example 3: Apparel Sourcing and Production Locations
Business Implications: Same product, but different natural capital costs as a result of sourcing from a region where water is more scarce
How does sourcing and production in different regions affect environmental impacts? How important is water scarcity in the region where commodities are being sourced?
Example 4: Beverage Production
Comparison of natural capital costs for two breweries based on water availability
Bilbao
SPAIN
Cordoba
100,000 m3 water used
Cordoba
Bilbao
High water scarcity (100%)
Moderate water scarcity (53%)
Natural capital cost:$14.1/m3 = $1,410,000
Natural capital cost:$4.0/m3 = $400,000
Example 5: Integrating Environmental and Financial Results
0.00
0.20
0.40
0.60
0.80
1.00
1.20
Bio-based butanol - Europe Bio-based butanol - US Propylene-based butanol -Europe
Propylene-based butanol - US
Financial costs GHGs VOCs Sox CO N20 PM Water Land conversion
Financial and Natural Capital Costs (NPV, $ per kg)
What are the financial and natural capital costs of a new production facility for biobasedor petroleum based ingredients?
Summary
• Integrate environmental and business results
• Communicate environmental performance to a broader audience
• Determine which impacts are most material
• Assess trade-offs • Quantify regional
resource risks
More resilient business models
Market differentiation, leadership, and
transparency
Better strategies for sustainable product
development
Applying a single, impact oriented metric expressed in financial terms enables businesses to:
The value to your business
Basic steps to conduct Natural Capital Analysis
What is the business case? What business decision will be supported by
research and question?
What is the scope?
Analysis
Feedback, review and integration
How can Trucost- thinkstep solution feed into this process?
Getting Started: Trucost-thinkstep solution
Full scale natural capital assessment can be a lengthy and costly process….
Materiality assessment allow s you to: - Save time and focus effort
- Get familiar with the process
Data to quantify impacts (tonnes of CO2eq, m3 of water …)
Natural capital valuation coefficients ($ per tonne of CO2eq, $ per m3…)
Analyse several products, impacts, life cycle stages in one clickCan be applied to any GaBi datasets across 9+ impact categories
Build a business case and refine focus for potential further, more –detailed assessment
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LCA results 1 kg Aluminium sheet
GWP
Total
1 Bauxite Production
2 Alumina
3 Electrolysis (Pre-baked)
5 Aluminium alloy mixer
6 Aluminium sheet
Rest
Clim
ate
change [
kg C
O2-E
quiv
.]
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Water
Total
1 Bauxite Production
2 Alumina
3 Electrolysis (Pre-baked)
4 Cast house
6 Aluminium sheet
Rest
Resourc
e d
eple
tion,
wate
r
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
• Global Warming
Potential
• Water depletion
NCA – Total cost of production
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Natural Capital Accouting (NCA), ILCD/PEF recommended impacts
Acidif ication, accumulated exceedance [Mole of H+ eq.] Ecotoxicity for aquatic fresh w ater, USEtox (recommended) [CTUe] Freshw ater eutrophication, EUTREND model, ReCiPe [kg P eq]
Human toxicity cancer effects, USEtox (recommended) [CTUh] Human toxicity non-canc. effects, USEtox (recommended) [CTUh] IPCC global w arming, incl biogenic carbon [kg CO2-Equiv.]
Particulate matter/Respiratory inorganics, RiskPoll [kg PM2,5-Equiv.] Photochemical ozone formation, LOTOS-EUROS model, ReCiPe [kg NMVOC] Resource Depletion, fossil and mineral, reserve Based, CML2002 [kg Sb-Equiv.]
Total freshw ater consumption, including rainw ater, Sw iss Ecoscarcity [UBP]
Total
1 Bauxite Production
2 Alumina
3 Electrolysis (Pre-baked)
5 Aluminium alloy mixer
6 Aluminium sheet
Rest
NC
A [
US
D,
2014],
ILC
D/P
EF
recom
mended im
pacts
2.5
2.4
2.3
2.2
2.1
2.0
1.9
1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
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NCA for aluminia production
Natural Capital Accouting (NCA), ILCD/PEF recommended impacts
Acidif ication, accumulated exceedance [Mole of H+ eq.] Ecotoxicity for aquatic fresh w ater, USEtox (recommended) [CTUe] Freshw ater eutrophication, EUTREND model, ReCiPe [kg P eq]
Human toxicity cancer effects, USEtox (recommended) [CTUh] Human toxicity non-canc. effects, USEtox (recommended) [CTUh] IPCC global w arming, incl biogenic carbon [kg CO2-Equiv.]
Particulate matter/Respiratory inorganics, RiskPoll [kg PM2,5-Equiv.] Photochemical ozone formation, LOTOS-EUROS model, ReCiPe [kg NMVOC] Resource Depletion, fossil and mineral, reserve Based, CML2002 [kg Sb-Equiv.]
Total freshw ater consumption, including rainw ater, Sw iss Ecoscarcity [UBP]
Total
Bauxite transport
EU-27: Alumina EAA update 2010 EAA <u-so>
EU-27: Electricity grid mix PE
EU-27: Thermal energy from heavy fuel oil (HFO) PE
EU-27: Thermal energy from natural gas PE
Rest
NC
A [
US
D,
2014],
ILC
D/P
EF
recom
mended im
pacts
0.5
0.4
0.3
0.2
0.1
0.0
• Global factors of the NCA method implemented into
GaBi database
• Implementation enables to convert LCIA based results
into dollars of natural capital
• Implementation done for the flowing LCIA methods
• CML 2013 EU25+3
• Traci 2.1, US-CA 2008
• PEF recommendation
• ReCiPe 1.08 (H)
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What is now available in GaBi regarding NCA method?
• Trucost NCA methodology and coefficients are now available in
your GaBi Datasets and is offered as:
Subscription license
• First license: 450€ annually
• Additional license: 225€ annually
Perpetual license
• First license: 900€ plus 25% annual maintenance
• Additional license: 450€ plus 25% annual maintenance
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TRUCOST valuation coefficients in GaBi Datasets
“NCA Insights” is the first step you can do to dig into NCA and see in real what value
your company can get from it.
What is it?
o A first and quick approach to help you…
• build the business case for NCA internally,
• get initial results based on existing LCA/EPD project done with thinkstep /
GaBi
• identify main contributors to your NCA results
• understand the results and value for your company
What benefits for you ? With NCA Insights, you will get…
o NCA results (reviewed by Trucost) on the basis of a selected and existing project
o Key findings to help you promote NCA internally
o Some initial background information on the NCA methodology used
What you will get ?
o A PPT document (approx.10-15 pages) with results, main NCA contributors,
comments/suggestions
o A suggested roadmap for action
o Presentation of the results through a Web Conference (approx. 1h30)
5K €
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Moving forward with « NCA Insights »
Time limited offer – valid until end of June 2015
Thank you for your attention!
For more information – please visit
www.thinkstep.com and www.trucost.com