Gestione del ciclo di vita
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Module 4: Accountability

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Gestione del ciclo di vita

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Accountability

Life Cycle Management

Life Cycle Thinking

Sustainability involves taking a holistic perspective to understand the true short-term and long-term impacts of a business activity. Life cycle thinking has emerged as a useful tool in sustainability to consider the total impacts of an activity, product, or service from its origin to its end. This differs from conventional business practices in which the focus has traditionally been on more immediate factors, such as cost, quality, and availability in the supply chain. Life cycle thinking still takes into account these factors but considers them over a product’s lifetime.
While conventional business practices have given limited consideration to disposal costs, life cycle thinking considers the impacts of disposal to be an important part of the overall process of product or service provision.

Life Cycle Thinking Aspects

Life cycle thinking in a business context considers business activities using a “cradle to grave” perspective. Cradle to grave starts by considering the impacts of raw material extraction and other inputs. It considers transportation of inputs to the organization and the impacts of the transformation process into a useful product or service that occur at the organization. It then considers transportation from the organization through the use of the product or service up to the ultimate disposal. Each step in the life cycle features a specific focus on inputs and outputs, such as raw materials and waste.
Life cycle thinking came into attention in the 1960s, when life-cycle-based accounting was first used to account for environmental emissions and economic costs associated with various energy technologies over their life cycle. Life cycle thinking has evolved as a sophisticated method for businesses to consider their environmental and social impacts.

Life Cycle Management

The management philosophy that integrates a comprehensive life cycle approach for organizations in managing their value chain is called life cycle management (LCM). A value chain is the connected activities that an organization undertakes in providing a product or service, with each interconnected activity adding value. LCM is a systematic progress of organizing, analyzing, and managing of sustainability impacts throughout the entire life cycle of a product, process, or activity.
LCM can occur at the product or service level or at the entire company level. For example, a company may be interested in managing the life cycle of one of its products to improve sustainability, or it may take a more comprehensive look at the portfolio of activities that it engages in as part of a more far-reaching approach to sustainability. One of the key benefits of life cycle management is that it can alert management to potential “hot spots,” or areas that may be ecologically or socially problematic.

LCM Example
If a company is selecting raw materials for the production of a product, they may have several material options to consider. The company can have a goal of choosing materials that have a higher degree of sustainability, meaning less negative societal impact or greater positive societal impact.
For example, if a product could be produced with three pounds of plastic material or two pounds of wood material, which material selection would result in lower pollution emissions per unit of product produced? Which would use less water? The impacts may vary depending on what other materials are required; for example, wood may require paint, while plastic would not. What about the quality of labor conditions for where the wood is harvested versus where the plastic was produced?
Materials that do not have environmental and social impact do not exist; every material has some form of impact. LCM can be used to manage for ecologically and socially preferable products and services.

Phases of a Life Cycle

There are three key phases in a life cycle.
Cradle
Cradle is the resource extraction or impacts of elements that serve as inputs to the process. Throughout the business activity or process, there are inputs and outputs, including water, energy, emissions, and waste. Upon completion of the activity, the finished output of the activity is at the gate.
Gate
The gate is the defining point when a business output activity is completed and it moves beyond the organization to the next step in its life cycle.
For example, the gate at a factory that produces tablet PCs is when the manufactured tablet is boxed and ready to be shipped from the factory.

Grave
Between the gate and up until the grave is the active use phase of the output of the organization, with the grave being the ultimate disposal of the output.

Upstream and Downstream

Two terms that are associated with the life cycle are upstream and downstream processes.

Upstream refers to activities occurring before the organization (supply chain).

Downstream refers to activities occurring after the organization (product distribution and product use and disposal).

Upstream and downstream can also be in reference to a specific point in the life cycle. For example, a company might be interested in the impacts of all activities “upstream” of a specific supplier. While business life cycles frequently are focused on products or tangible goods, it can also apply to services.

Types of Life Cycle Management

Life cycle management does not need to consider the entire life cycle, but instead, it can consider discrete phases or parts. This depends on the needs of the organization. Sometimes, the greatest opportunities for reducing environmental or social impacts may exist outside a company’s own operations and in its supply chain, in which case, life cycle management would focus on its supply chain. Or the assembly of a product might be quite complex, and life cycle management is focused on one specific part of the assembly process.
Click on the buttons below for information on different types of life cycle management.

Cradle to cradle specifically focuses on the end-of-life step being recycling. This type of life cycle management is becoming more in focus where considerable attention is paid in designing products so that they can become part of another beneficial use and not be disposed of as waste.


Cradle to gate focuses on the phase from input extraction through the organization output, but not downstream impact.


Cradle to grave includes the whole product life cycle from beginning to disposal.

Impacts
There are economic, social, and environmental impacts associated with the harvesting of the wheat, vegetables, and beef required as inputs to the burger. Other impacts would be associated with the napkins, packaging, condiments, and other supplies. There are also impacts associated with the transportation of these inputs to the restaurant. These impacts would be considered upstream.

Impacts
There are economic, social, and environmental impacts associated with the harvesting of the wheat, vegetables, and beef required as inputs to the burger. Other impacts would be associated with the napkins, packaging, condiments, and other supplies. There are also impacts associated with the transportation of these inputs to the restaurant. These impacts would be considered upstream.

Gate and Grave
The gate would be the customer receiving the burger at the checkout counter. All impacts after this point would be considered downstream. The useful life of the burger would be the customer eating the burger and the grave would be the disposal of the packaging for the burger in to a trash or recycle bin.

Inputs
As part of the transformation process, inputs-such as water, electricity, and raw ingredients-are required. Waste is generated in the process of producing the burger and pollution emissions are generated-for example, carbon dioxide and other forms of air pollution are generated depending on the type of power plant that generated the electricity.

Energy Use for a Cheeseburger
SPI
One sustainable performance indicator (SPI) that could be used in life cycle thinking is to consider the total energy used in the production of a product. A 500-calorie cheeseburger requires about 1,700 calories of energy from oil and electricity to make it from the farm to the finished product at a restaurant. This means that it takes more energy to make a burger than we receive from eating the burger.
This negative energy flow and its dependence on fossil fuels has its own implications for the sustainability of eating cheeseburgers, but from the restaurant owner perspective, they would be most interested in the areas where changes to their business practices would have the most impact in reducing energy use.

Supply Chain
Another option for the restaurant owner would be to consider which steps have the greatest energy impact in the life cycle of a cheeseburger. The area with the biggest impact on the energy use of a cheeseburger is agricultural activities, or the activities that occur at the farm.
This suggests that the biggest impacts on energy use that a restaurant owner can make actually occur in his supply chain and not at his own facility. This might be a finding that the owner may never have expected or have known about without considering his operations from a life cycle perspective. Only about 10 percent of the energy in the entire cheeseburger life cycle is generated on-site in the cooking of the burger; the other 90 percent comes from various upstream activities.



Energy Impact
One option for the restaurant owner is to consider which ingredients of the burger have the greatest energy impact in their life cycle. Almost 80 percent of the energy in a cheeseburger comes from all the steps associated with producing, preparing, and cooking of the hamburger meat. This would be an area for the restaurant owner to focus on.
Cheese and bread are also two ingredients that require a significant amount of energy in the cheeseburger life cycle.

Carbon Footprint
One of the key drivers for sustainability reporting relates to greenhouse gas emissions reporting. A popular and specific application of life cycle management is to calculate a carbon footprint. A carbon footprint measures all greenhouse gas (GHG) emissions associated with the life cycle of a product, service, or business operation, including carbon dioxide, methane, and nitrous oxide.

To help organizations, standards have emerged to assist with the complexities of calculating carbon footprints. As carbon footprints involve the complex interaction of organizations, supply chains, retail activities, and consumers, there is often imperfect data and uncertainty in the total emissions impacts of a business activity. These standards help provide organizations with a consistent way of reporting and addressing common problem areas, such as the double counting of emissions and system boundaries.

Carbon Footprint

Organizations are calculating their carbon footprints to:
Provide carbon registration and reporting (such as for the Carbon Disclosure Project).
Provide sustainability information to their stakeholders, including customers
Provide data for carbon offsets and clean energy projects
Provide data for allowances management to allow organizations to manage
voluntary or mandatory emissions trading programs
Forecast future emissions

Greenhouse Gas Protocol

The Greenhouse Gas Protocol (GHG Protocol) Corporate Standard [1] is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions. This standard was developed by the World Resources Institute and the World Business Council for Sustainable Development, whose working committee includes the World Wildlife Fund, the United Nations, Ford, BP, PricewaterhouseCoopers, the US EPA, and other organizations.

Scopes
The GHG Protocol Corporate Standard considers three different scopes.

Scope one consists of direct emissions from an organization’s operations.
An example of scope one would be emissions from fuel consumed to heat a building.
Scope two emissions are emissions from energy purchased by the organization that are generated outside of the organization.
Typically, this would be the emissions from power plants for the electricity used by an organization.

Scope three emissions are emissions from sources outside of the organization but related to an organization’s business activities.
Supplier emissions and emissions related to transportation not directly owned by the organization would fall under scope three emissions.

Water Footprint

Another common application of life cycle management is to calculate a water footprint. The water footprint is an indicator of water use that looks at both direct and indirect water use. A product or corporate water footprint is the first step toward identifying the processes and activities, which significantly influence an organization’s water use. The water footprint of a product (good or service) is the volume of fresh water used to produce the product, summed over the various steps of the value chain. The water footprint of a business consists of its direct water use for producing, manufacturing, and supporting activities plus its indirect water use-that is, the water used in the business’s supply chain. [2]

As freshwater becomes an increasingly scarce resource-especially in some parts of the world-companies that are able to understand, measure, and manage their water footprints and water scarcity risks can gain competitive advantage over those organizations that do not.

Water Footprint

A water footprint has three components:
1. Green water footprint. Use of rainwater stored in the soil as moisture.
2. Blue water footprint. Use of surface and ground water.
3. Grey water footprint. Use of freshwater required to absorb pollutants based on water quality standards.

Applications of a water footprint are as follows:

Water risk assessment to map vulnerable watersheds, ecosystems, and communities

Assessment of local and regional water resources


Measurement of corporate water use and wastewater discharge both in direct operations and in the supply chain

Coca-Cola Water Footprint
Company
In 2008, Coca-Cola Enterprises undertook a water footprint assessment for the company’s most popular beverage, Coca-Cola. They evaluated the water used in a 0.5-liter PET bottle of Coca-Cola produced at CCE’s Dongen bottling plant in the Netherlands.

Findings
Coca-Cola found that to produce a 0.5 liter of Coca-Cola, 15 liters of green water, 8 liters of blue water, and 12 liters of grey water were required. A key finding of the assessment was that the water footprint of sugar was a significant component of the overall water footprint of Coca-Cola. More than two-thirds of the total water footprint of a 0.5-liter PET bottle came from blue and green water used in the supply chain to grow sugar beets. The operational water footprint only accounted for 1 percent of the total water footprint.
This study resulted in Coca-Cola taking a closer look at the water use associated with sugar beet production and supported the business value of conducting a water footprint [3].

Accounting
The accounting process began with the water used in the supply chain to produce ingredients and other components (e.g., bottles, labels, and packing materials). Ingredients include sugar made from sugar beets grown in the Netherlands, carbon dioxide (CO2), caramel, phosphoric acid, and caffeine. The supply chain water footprint also included overhead, which accounts for water used to produce the energy that powers the plants; building materials; office paper; vehicles; fuel; and other items not directly related to operations.

Walmart Sustainability Assessment
Company
Walmart is the world’s largest public corporation by revenue and exerts a tremendous impact on US and global economic structures. Any initiative that Walmart undertakes can have significant social and environmental consequences, both positive and negative.

Index
The first step in developing the sustainability index has been to analyze the impact of their supply chain. This upstream analysis has involved surveying and scoring suppliers according to a fifteen-question supplier sustainability assessment. These questions are divided into four categories: (1) energy and climate, (2) material efficiency, (3) nature and resources, and (4) people and community. Walmart provided more than one hundred thousand global suppliers with the brief survey to evaluate their own sustainability, and the survey was required to be completed by their top-tier suppliers.
The next steps in their development of a sustainability index are to develop a life cycle analysis database for products and to develop a simple tool to communicate sustainability performance from suppliers to customers. [5]

Sustainability
In recent years, Walmart has put significant focus on sustainability in its business operations. Walmart produces an annual social responsibility report, as do many other major multinational companies, but their recent efforts extend far beyond reporting on sustainability performance [4]. Part of this initiative is the construction of a sustainability index. Walmart’s goal is to communicate to customers the safety, quality, and social responsibility of the products they purchase from Walmart.

Bibliography

[1] http://www.ghgprotocol.org/files/ghgp/public/ghg-protocol-revised.pdf
[2] “Water Neutral: Reducing and Offsetting the Impacts of Water Footprints” Institute for Water Education, http://www.waterfootprint.org/Reports/Report28-WaterNeutral.pdf.
[3] “Product Water Footprint Assessments: Practical Application in Corporate Water Stewardship” Coca-Cola Company and Nature Conservancy, , http://www.thecoca-colacompany.com/presscenter/TCCC_TNC_WaterFootprintAssessments.pdf.
[4] http://sustaindane.org/uploads/2011/Walmart%20Supplier%20Assessment.pdf
[5] “Sustainability Index,” Walmart, http://corporate.walmart.com/global-responsibility/environment-sustainability/sustainability-index-leaders-shop.


























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