Life Cycle Assessment: Why and Who Should Adopt It

The concept of life cycle assessment (LCA) arises from the need to address environmental issues across all phases of the lifecycle of goods and services. It serves as a crucial tool for companies transitioning towards more eco-sustainable processes and circular business models.

Life Cycle Assessment as a Cornerstone of Sustainability

Life Cycle Assessment is an analytical methodology aimed at quantifying the environmental and health impacts of a product’s entire lifecycle. Its holistic approach, which spans from raw material extraction to product disposal (or all phases of service development and delivery), makes LCA a key element in corporate sustainability initiatives.

It enables companies to identify critical areas, set priorities, and seize opportunities for action, ensuring they meet their commitments to stakeholders (particularly investors and consumers) and comply with existing regulations. In this sense, LCA provides critical decision-making support for comprehensive sustainability efforts.

The 4 Phases of the LCA Procedure

Life Cycle Management is an internationally standardized methodology, especially through the ISO 14040 series, which outlines a 4-phase assessment process:

1. Definition of Goals and Scope
   In this phase, the lifecycle stages to be included in the analysis are identified, along with system boundaries (e.g., timeframes), the environmental impact categories to assess, and the quality requirements for data to be incorporated into the study.
   
   
2. Inventory Analysis
   This is undoubtedly the most delicate phase. It involves the detailed definition and quantification of input and output flows associated with all stages of the product’s lifecycle, according to the scope defined earlier.  
   During the inventory analysis phase, all relevant data are collected, such as consumed resources, energy inputs/outputs, emissions (including water), and waste produced at every stage, from raw material production to manufacturing, distribution, use, and disposal.
   
   
3. Impact Assessment
   In this phase, mathematical models are used to link inventory data to specific environmental impact categories, allowing for the identification of each stage’s contribution to indicators such as:
   
   • Climate change
   • Smog and acidification
   • Ozone formation
   • Marine eutrophication
4. Interpretation of Results
   In the final phase, the results are interpreted with scientific rigor to the initial objectives. The environmental (and health) implications of the data are evaluated, and potential opportunities for product improvement (eco-design process) or service enhancement (e.g., the Product as a Service paradigm) are identified.

Why Adopting Life Cycle Assessment Is Worth It

Implementing an LCA methodology for a company’s products and services entails significant costs, primarily related to data collection and analysis, including impact quantification. However, adopting life cycle assessment benefits companies, both from a high-level organizational perspective and within individual business units.

For top management, for example, LCA is essential for formulating corporate sustainability strategies and demonstrating the company’s commitment to corporate social responsibility. The results of an LCA analysis can be used to communicate with customers and investors about the company's commitment to transparency and sustainable practices, as well as form the basis for obtaining specific environmental certifications.

LCA also plays a central role in ensuring compliance with current regulations and helps companies identify potential risks associated with products or services (Risk Management) in advance, enabling proactive actions to safeguard their reputation.

Moreover, there are potential financial benefits, as LCA allows companies to:

• Improve production practices
• Select more sustainable suppliers
• Optimize production processes

This increases operational efficiency and competitiveness in the marketplace. Not to mention, marketing teams can promote the company’s commitment to sustainability, attracting an increasingly aware and environmentally conscious audience, which in turn can boost revenue. Meanwhile, the product development division (R&D) can receive invaluable insights for creating new eco-sustainable products.

Finally, involving many business divisions strengthens an integrated approach to sustainability and fosters a company culture centered around environmental responsibility. This, in turn, enhances the company’s reputation, helps attract and retain talent, and addresses the growing expectations of consumers and stakeholders.

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