The Sustainable Environmental Performance Indicator: LCA Based Strategic Decision Making

Life Cycle Assessment (LCA) is a well used tool for analyzing environmental impacts on a wide perspective and with a reference to a product system and economic activity. However it has some limitations and there is a need for a novel approach that complements environmental and financial considerations. This is addressed in this study with the introduction of a new graphical representation: the Environmental Performance Strategy Map. This particular graphical map allows combination of the main environmental indicators (footprints) with the additional dimension of cost. Into a Sustainable Environmental Performance Indicator.

1. From Environmental Assessment to Strategic Environmental Map

The ecological footprint is a way to compare human demand with our planet capacity to regenerate it and it is measure of our burden on the ecosystem. In a broader view the ecological footprint is related to the method of LCA. One of LCA advantages is that it better covers the whole range of impacts, and it may also provide an accounting of the upstream impacts.  Nevertheless, one of the most important limitations in the application of LCA as an input for strategic decision-making is the limited inclusion of cost and investment considerations. A new approach is required to integrate financial, environmental, resource and toxicological considerations into a single analysis. The core of the concept is to calculate some specific sustainability indicators based on LCA. The cradle to grave approach will assure that all environmental and human consequences taken into account. To represent these relations and to compare options from an environmental and, more generally, business perspective a new graphical representation needs to be introduced: the Environmental Performance Strategy Map (EPSM). The objective of this representation is to build upon the strength of Ecological Footprint and Life Cycle Analyses to provide a single indicator for each option. The first step in building the EPSM correctly is to calculate the impact of the option under analysis for all of the main environmental burdens. The combination of these elements and the cost perspective will provide a single indicator to assign to each option.

2. Selection of Footprints

Different methods have been developed in the last years to correlate environmental sustainability of specific activities with land and water areas required to supply this activity with resources and to absorb its wastes (Monfreda et al. 2004). This is usually referred to as Ecological Footprint. The difficulty in using the tool in the decision making process have been noted by Ayres (2000) and overcome by the development of specific indicators - SPI (Krotscheck and Narodoslawsky 1996) and DAI (Eder and Narodoslawsky 1999). In particular the Sustainable Process Index (SPI) considers the area as a basic measure: the more area a process requires, the more its burden from an ecological point of view.

To provide a more comprehensive analysis of the interaction of the environmental burdens and financial costs newly developed the EPSM is based on the combination of various footprints (further details are available in De Benedetto and Kleme? 2009): 

• Carbon footprint (Hujbregts et al. 2008, Wiedmann and Lenzen 2007)
• Water footprint (Hoekstra and Hung 2002, Hoekstra 2007)
• Energy footprint (Land, Renewables, Non-Renewables) (Stoeglehner 2003)
• Emission footprint (emissions in Air, in Water, in Soil, Waste materials) (Sandholzer and Narodoslawsky 2007)
• Work environment footprint (work-environment and toxicological impacts) (Schmidt et al., 2004)
•  

3. Building the Map

Once the contribution of each option to the specific footprints has been calculated, it is possible to build the EPSM. The basic concept is to map the footprint on a specific spider-web plot (Fig. 1, a). To compare measures the results of each footprint are normalized, resulting in a scale from 0 to 100. A deviation-from-target methodology is proposed, where for each of the footprints, the targets are either based on maximum available resources or are drawn from scientific consensus or regulatory requirements. Each value is recorded as a percentage. The aim is to lower as much as possible the contributions of each footprint. Each option has an area assigned that represents a combination of all footprints. To specify the cost and financial impacts an additional dimension has been introduced (Fig.1, b). The indicator takes into account the total financial investment required for each options. The volume of each pyramid represents the overall environmental and financial impact. The authors define this index as the Sustainable Environmental Performance Indicator (SEPI).

Fig. 1 (a) Plotting the footprints in the EPSM , (b) The additional dimension in the Environmental Performance Strategy Map, (c) Example of simplified Bill of Materials

Finally it is possible to plot all options under consideration in a specific EPSM. The map thus enables comparison of different options for strategic decision-making purposes, based on a single sustainability indicator.   

4. The Environmental Bill of Materials and Technology Routing

The EPSM considers production processes as a whole. In case a more granular approach is required we need to introduce two new elements. The term ?Bill of Materials? (BOM) is used to indicate basic materials, components, parts and the quantities of each needed to manufacture a product or service (Reid and Sanders 2002). The idea is to associate contributions to the above mentioned footprints to each component of a manufactured good or service (Fig 1, c).   With regards to the previous work on this subject (De Benedetto and Kleme? 2009), the contributions of each item to the footprints specified in the previous paragraph is recorded (Environmental Performance Points or EPP). We define this new BOM as Environmental Bill of Materials (ENV-BOM).

Table 1. Example of Environmental BOM

When all components are recorded it is possible to consider also the operations and the technology process. We define the collection of all operations Technology Routing (Table 2). As done for the BOM, it is necessary to define the contributions in terms of the footprints for each step of the process.  Table 2. Example of Technology Routing table:

When all Environmental Performance Points are defined, it is possible to sum them all to provide the final figures to build the Environmental Performance Strategy Map.

5. Conclusions

The Sustainable Environmental Performance Indicator, and the associated Strategy Map, provide an overall indicator of the environmental performance. One of its main characteristics is that it aggregates all contributions in a very high level. In case this is not desirable and a more granular approach is required, we introduced two new elements: the Environmental Bill of Materials and Technology Routing. These elements allow the decomposition of each environmental burden at materials and process steps level. This approach has been demonstrated with specific case studies.

Acknowledgement:

Financial support from MC Chair (EXC) INEMAGLOW: FP6-042618 Integrated Waste to Energy Management to Prevent Global Warming is gratefully acknowledged.

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