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Towards a complete set of sustainability indicators
December 7, 2014 by Bo Weidema
The stakeholder approach to sustainability indicator development has led to a plethora of different indicator sets. This makes cross-comparisons difficult and is inefficient in terms of resources that need to be spent on measurement and reporting. Furthermore, important aspects of sustainability may be omitted, either because there is no particular stakeholder interest that defends a specific aspect, or due to concerns for data availability.
An alternative to the stakeholder approach is a more conceptual approach (these approaches are of course not necessarily mutually exclusive) starting from the definition of sustainable development and which in its outset seek complete coverage of what the UNEP/SETAC Working Group on Impact Assessment (Jolliet et al. 2003) called “areas of protection”.
A conceptually complete organisation of “areas of protection” can be seen in Table 1. What I mean by conceptually complete is that any item must be either human or non-human; any non-human item must be either biotic or non-biotic; any value must be either intrinsic or instrumental.
Table 1. Areas of protection in the SETAC/UNEP LCIA framework from Jolliet et al. (2003) slightly modified by Weidema (2006). 
You may note that what is here called “Instrumental values”, may also be called “Resources” or “Capital”, and that both human and man-made ecosystems/resources are covered, without necessarily making an explicit distinction (which of course could be done at a next level).
While such a framework provides completeness, it is of course only the first step towards a complete set of indicators. Another recent important contribution in this field, which also has a conceptual starting point, is the Conference of European Statisticians Recommendations on Measuring Sustainable Development (UNECE 2014). In this report, you can find not only a very comprehensive set of sustainability indicators but also a very clear description of the relationship between these indicators and the national accounting framework. The report particularly points out that for each aspect to be measured, both a geographical (imports/exports) and a temporal (capital transfer to future generations) perspective need to be covered. I reproduce below the graph that illustrate the geographical perspective.
Figure on Sustainable development: “here” versus “elsewhere”. From UNECE (2014).
The recommendations have been endorsed by statisticians from more than 50 countries and are expected to contribute to the ongoing United Nations processes for setting up Sustainable Development Goals and the related targets and indicators, and defining a post-2015 development agenda.
The conceptual foundation and the potential indicators suggested in the UNECE publication may serve as a good starting point for further harmonization of the measurement systems and development of a set of indicators that could be used for comparison across countries, and probably with some adaptation also across individual enterprises and products.
References
Jolliet O, Brent A, Goedkoop M, Itsubo N, Mueller-Wenk R, Peña C, Schenk R, Stewart M, Weidema B P. (2003). Final report of the LCIA Definition study. Life Cycle Impact Assessment Programme of The UNEP/SETAC Life Cycle Initiative. Paris: United Nations Environmental Programme. https://lca-net.com/p/1100
UNECE (2014). Conference of European Statisticians recommendations on measuring sustainable development. New York and Geneva: United Nations. www.unece.org/publications/ces_sust_development.html
Weidema B P. (2006). The integration of economic and social aspects in life cycle impact assessment. International Journal of Life Cycle Assessment 11(1):89-96. https://lca-net.com/p/1024
Creating shared value with Life Cycle Assessment
November 19, 2014 by Bo Weidema
Life Cycle Assessment is not about blaming businesses for negatively impacting environmental or social conditions – rather, it is about identifying leverage points for improving the role of business in society. In many ways, enterprises have the powers to solve issues that societies have struggled with for many years – namely the internalisation of the social (and environmental) externalities.
“Creating Shared Value”, “Net positive” and “Handprints” are some of the existing business concepts that aim to shift the focus from the negative impacts of businesses to the positive force of business in solving societal problems.
Creating Shared Value (CSV) is a business policy and practice that aims to increase both economic and social well-being and business competitiveness based on an understanding of their co-dependence (Porter and Kramer 2006, 2011). “Net positive” is a similar concept defined as adding greater value to society than you take away (Green Mondays 2013), but applied to more specific issues like returning more to nature than you use. Finally “Handprints” is a concept (Handprinter) to measure the benefits a person or an organization can provide, rather than the impacts (social costs) it incurs.
These concepts borrow from earlier ideas of “footprints”, “bottom-of-the-pyramid”, industrial symbiosis, strategic corporate social responsibility etc. but what is excitingly new about these concepts is the radical way they re-formulate the role of business in society; to paraphrase Porter: “to harness the power of capitalism in the service of society”.
An example of this, given by Porter and Kramer (2011), is Vodafone’s pioneering M-Pesa mobile-phone based banking service in Kenya, helping the poor save money securely and increasing the ability of small farmers to produce and market their crops. M-Pesa has become the most successful mobile phone based financial service in the developing world. When introduced in Afghanistan the direct payments proved a tool to combat corruption (Rice and Filippelli 2010).
Essentially, the idea is all about internalizing externalities by creating the markets that are currently missing. Thus, it is actually not capitalism as such that is harnessed, but rather the market economy. In fact, the proposals of Porter and Kramer (2011) do not warrant the strong focus they give to re-inventing capitalism and the role of companies, since these roles could as well be performed by non-profit or public organizations. What is important from the idea of CSV is that the organizations work under the efficiency imposed by a market economy.
In relation to Life Cycle Assessment (LCA), CSV implies an expansion of the scope of social LCA to include the social impacts normally left aside to be handled by government. I believe the addition of the CSV perspective can enhance the comprehensiveness and practical relevance of LCA.
On the other hand I think that LCAs strong tradition for quantitative measurement can contribute a lot to a realistic and credible valuation and prioritization of the opportunities for CSV, enhancing its capability to optimize both social and corporate decision-making.
See also our previous blog on social LCA https://lca-net.com/blog/2014/06/
References:
Porter, M. E., and M. R. Kramer. 2006. Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility. Harvard Business Review December 2006, pp. 78-93.
Porter, M. E., and M. R. Kramer. 2011. Creating shared value. How to reinvent capitalism – and unleash a wave of innovation and growth. Harvard Business Review January/February 2011, pp. 1-17.
Green Mondays. 2013. Crowdsourced Green Mondays: Net positive. An expert crowd’s view of Net Positive business strategies. www.green-mondays.com/admin/uploads/media/NetPositive (accessed 2013-12-26). This is now a broken link. But see http://thecrowd.me/sites/default/files/NetPositive.pdf
Rice, D., and G. Filippelli. 2010. One Cell Phone at a Time: Countering Corruption in Afghanistan. Small Wars Journal September 2, 6:17pm. http://smallwarsjournal.com/blog/journal/docs-temp/527-rice.pdf (accessed 2013-12-26).
ISO system expansion = substitution
September 22, 2014 by Bo Weidema
When systems have more than one product, the ISO standards on LCA recommends avoiding partitioning/allocation of the system by instead “expanding the product system to include the additional functions related to the co-products” (ISO 14044, clause 4.3.4.2).
I am sometimes asked: “Is this ‘system expansion’ of ISO not something different from the ‘substitution’ approach (also sometimes described as the ‘avoided burden’ approach) used in consequential LCA?” This lack of clarity in the ISO standards is also sometimes lamented in the literature, e.g. by Brander & Wylie (2011).
This makes me miss the very clear Figure B.2 that we had in the original ISO 14041:1998 (which was merged with ISO 14042 and 14043 into the current ISO 14044 in 2006). This figure illustrated clearly that the authors of the ISO 14040 series viewed system expansion as a substitution. Unfortunately, the informative annex in which this Figure B.2 was placed did not survive the merger. Since few nowadays have direct access to the original ISO 14041 text, let me share this with you:
EXAMPLE 3: Utilizing the energy from waste incineration.
One of the widely used examples of avoiding allocation by expanding the system boundaries is when utilizing the energy output from waste incineration as an input to another product system.
The allocation problem arises because the investigated product system has two outputs: the product or service investigated (A) and the energy output from incineration (B). This allocation problem is often solved by expanding the system boundaries, as illustrated in Figure B.2.
Figure B.2 – Expanding system boundaries for waste incineration
End of quote from ISO 14041:1998
As you can see clearly from the figure, the expansion is done by subtracting the alternative system. Mathematically, subtraction is the same as a negative addition. There are also additional examples of this in Figure 15 and 16 in ISO 14049 (entitled “Illustrative examples on how to apply ISO 14044 to goal and scope definition and inventory analysis”).
But the fact that this discussion pops-up from time to time just goes to show the current ISO 14040/44 sometimes fail us in its role as a standard, that is, to minimize or eliminate unnecessary variation (more about that in Weidema 2014).
References:
Brander M, Wylie C. (2011). The use of substitution in attributional life cycle assessment. Greenhouse Gas Measurement and Management 1(3-4):161-166. http://dx.doi.org/10.1080/20430779.2011.637670
Weidema B P (2014). Has ISO 14040/44 failed its role as a standard for LCA? Journal of Industrial Ecology 18(3):324 326 https://lca-net.com/p/1273
Public hearing of LEAP draft guidelines
July 24, 2014 by Bo Weidema
Last week, I spent 20 hours making more than 30 pages of comments to the three draft guidelines from the FAO Livestock Environmental Assessment Performance (LEAP) Partnership. They are currently in public hearing until July 31st. You can find my comments in our executive club, if you are a club member.
There is already a large number of guidelines that interpret the basic ISO 14040/44 standards for LCA for specific products, countries and/or impact categories. Every time a new one is made, there is the risk of introducing new inconsistencies (see Weidema 2014) although each new guideline sets out with the praiseworthy intention to provide consistency and harmonisation – in the case of LEAP for environmental performance assessment and monitoring of livestock supply chains on a global scale. If we should make comments on all the guidelines that are continuously being produced, we should have a full-time person or more for this task alone. But in the case of FAO, I made an exception – like I previously did with the EU product environmental footprint guideline – since I regard FAO as an important public-service organisation with a large international impact.
And although it was a lot of pages to read and comment – with some unavoidable redundancy due to the three parallel guidelines for feed, poultry, and small ruminants – I found it worthwhile, since the guidelines actually contain quite some default data and assumptions, for example for nitrogen excretion from chicken and laying hens, that will hopefully lead to less arbitrariness when applied in future studies.
But with more than 30 pages of comments you can imagine that I have not been entirely happy with the current state of the drafts. At the most fundamental level, it does not seem wise for an international guideline to adopt an attributional modelling approach that cannot be used for decision support. The main problem of the attributional approach is that the results cannot be used for decision support regarding improvements of the analysed systems, simply because the results do not reflect the environmental consequences of such improvements. The results will be misleading if they by mistake should anyway be used for decision-making. The authors appear to be unaware that an attributional approach cannot say anything about the environmental performance of a product, only about the environmental performance of that part of the product system that is included according to the chosen allocation rules for by-products. This is why ISO 14040/44/49 recommends the use of system expansion to avoid allocation, and generally describes a consequential approach to system modelling. The main reason for this is that ISO 14040/44/49 is intended for supporting improvements, which requires LCAs that provides information on the consequences of these improvements.
And you will probably not be surprised that I am also not happy with the deviation from the ISO hierarchy for handling co-products, where the draft LEAP guidelines m ix system expansion and allocation. Mixing these approaches in the same study leads to the result being neither attributional nor consequential. System expansion is not relevant for attributional questions and allocation is not relevant for consequential questions. Each allocation method provides an answer to a specific question, so when combining several different allocation methods within the same study, both the question and the answer is obscured. Consistently applying system expansion for joint production and subdivision by physical causality for combined production provides an unambiguous answer to the question of the consequences of a decision, which is the purpose of the majority (if not all) LCAs.
The FAO text here suggests that there are situations where system expansion cannot be applied because the avoided production cannot be unambiguously identified. However, since the input to a market is identified by the same procedure whether the market output is decreasing (avoided inputs) or increasing (normal inputs), the avoided production can always be determined with the same degree of (un)ambiguity as any other market input to the product system. If the procedure that is generally accepted for identifying upstream market inputs is discarded just because the sign of the flow has been inversed, this places into question the entire procedure by which we link our product systems, and can therefore not be used as an argument for not applying the procedure specifically for avoided production.
And then there are all the things that are not included in the guideline even though these are exactly the kind of things that would have been relevant. Such as how to determine the temporal boundary between two subsequent crops with an intermittent fallow period, or how to deal with biogenic carbon (excluded, which is not in line with ISO 14067).
These were just some of the many issues that hopefully will be corrected in the final version. Which is why such public hearings are so important.