Life Cycle Management

Environmental management practices in most business organizations from the early 1990s were characterized by their focus on internal operations, cost savings, and compliance and risk management approaches. Such a traditional view of sustainability management, however, is not sufficient to address current business challenges – to create competitive advantages while contributing to sustainable development. There is a need for a life cycle management practice that expands the scope through including the complete value chain and that links sustainability management and performance of organizations and products to business value and value creation. Being an extremely powerful concept and process, life cycle management can ensure businesses deliver real-world improvements for all stakeholders. In the long term, it can also help to transform the market by making sustainability a differentiator just as quality is today.

Life cycle management is a business management concept applied in industrial and service sectors to improve products and services, while enhancing the overall sustainability performance of the business and its value chains. Life cycle thinking and product sustainability is operational for businesses that are ambitious and committed to reducing their environmental and socio-economic burden while maximizing economic and social value. In this regard, life cycle management is used beyond short-term business success and aims at long-term achievements. The term “life cycle management” has been confused with other uses in engineering and manufacturing (product life cycle management) and in software development (application life cycle management), in buildings, plants, information management and so on. There is a need to clarify this term and its definition more than a decade since the concept was first introduced. This chapter aims at elaborating the concept and definitions of life cycle management as currently found in literature and as extending it from focusing on implementation of life cycle sustainability assessment into business practice to include it as part of sustainable consumption and production strategies and policies. Methods and tools used and the general framework for life cycle sustainability management covering environmental, social and economic aspects in business practices are discussed in detail.

This chapter proposes a value creation framework to operationalize sustainability within organizations through an improved link between life cycle management tools and business drivers for value creation. Internal and external stakeholders’ need to be first identified and accounted for, and value creation must be clearly identified in order to be acknowledged and communicated. The question “what do we want to achieve?” needs to be answered before thinking how to best achieve the identified business value. We propose to apply “reverse-engineering” to define the value creation path and identify the departments and collaborators to be involved at different level of the organization. LCM offers an essential and flexible integrated management framework of concepts, techniques and procedures to think how to best operationalize sustainable actions to achieve the identified business value. The sustainability action involves a team that should include, at least a sponsor or a pilot from the department that is expecting final value creation (Human Resources – HR for employee engagement, marketing for product positioning, etc.) and a representative from each department involved in the value creation path. Each of them will need an LCM tool adapted to their need and specific objectives. Last but not least, one needs measurable indicators on global goals that are to be monitored by the overall project sponsor, through KPI (key performance indicators) and follow-up.

This chapter discusses how business can implement life cycle sustainability assessment into their management strategies. Life cycle management is a management approach that provides business a systematic way of managing their sustainability issues. The PDCA (Plan, Do, Check and Act) cycle is one of the quality management tools that can be used by companies to implement life cycle management initiatives in order to improve their sustainability performance. The relevance of the PDCA cycle is discussed to ensure a continuous performance improvement by setting and implementing a well-defined plan, checking whether the ambition goals are achieved or any adjustment actions are needed to continue the evaluation process.

Starting from the output ‘The Future We Want’ of the Rio+20 conference 2012, the main focus of this chapter is on social responsibility (SR) in the value chain. The historical context of SR is discussed, related to the international standards as are the Guidance on Social Responsibility and the Global Reporting Initiative, linked with the management of organizations and enterprises. It is emphasized that due diligence along the value chain is seen as a requirement for claiming ‘social responsibility’. Life cycle sustainability assessment (LCSA) contributes to the assessment and life cycle management (LCM) to the follow-up of exercising due diligence, all within the context of sustainable development. The over-arching LCSA is a combination of three different life cycle assessment techniques allowing to assess the impacts along the value chain: environmental LCA, social LCA and life cycle costing.

Although Life Cycle Management (LCM) is becoming commonplace in larger corporations it is far from mainstream. To achieve sustainable production and consumption patterns, LCM needs to be taken up by whole supply chains that include small and medium sized enterprises (SMEs). From a business perspective, this represents a competitivity issue, as these SMEs are increasingly under pressure from clients and legislators to provide more information about the environmental impacts of their products, and to take responsibility for them both up and down the value chain. Therefore a sector based and regional approach is needed to foster the implementation of LCM in SMEs. This has been done in Northern France, where professional support organizations, including clusters, business federations and Chambers of Commerce, have come together under the auspices of the [avniR] LCA Platform to explore ways to help businesses to adopt LCM. Nine pioneer sectors, textile, seafood, packaging, mechanical, food, wood, construction, recycling and renewable energies, have undertaken an ambitious project to integrate LCM into their business. The methodology for all nine sectors follows five major steps: benchmark, sector maturity assessment, needs identification, action plan and implementation.

In general, companies start using a life cycle approach to manage the sustainability challenges and opportunities of their products through projects using life cycle assessment or other tools of the life cycle management toolbox like greenhouse gases accounting. As companies gain experience the way they manage the life cycle of their products matures, it becomes less about implementing projects and more about putting in place organization-wide procedures. The latter allow companies to address systematically the identified business challenges and opportunities of their whole portfolio or at least their key products with much less effort than carrying out multiple individual projects.

In this chapter we explore the need and opportunities to make the life cycle assessment (LCA) team more relevant for the business. Sustainability trends and alternatives for LCA are analyzed to identify what makes them relevant for and appealing to business managers, the difficulties LCA practitioners face to get their message across have been identified, and a five-step approach to make the LCA team a business partner will be described. The goal is to empower LCA teams and practitioners to create sustainable value for the business they work in.

Prioritizing sustainability as a key strategic focus and managing it similar to other parts of business such as marketing and sales, leading companies have been able to better identify and manage risks as well as enhance brand value and corporate reputation. With industry partnerships a holistic approach is possible. Common metrics, shared value chain data and joint sustainability management form the basis of a successful cooperation. Decision-making processes can be supported efficiently and influence the whole product system, thereby facilitating clear, measurable value creation throughout the supply chain. Industry partnerships with implementation of innovative business models are a key enabler for companies to realize more sustainable solutions.

Life cycle management has gained traction in the last decades. However, even today it is not yet implemented in all companies due to lack of the connection between sustainability and value creation. In fact, managers are pressed to deliver value, and their performance is measured on how well they deliver the value. In this chapter the authors contribute to bridging the gap between sustainability science and business management by application of life cycle assessment (LCA) in corporate sustainability and aligning it with business activities/functions and value creation. They illustrate the context of corporations, sustainable value creation opportunities and the role of different business functions in integrating sustainability in the core business. Two cases demonstrate how business functions can use LCA-based insights for business decisions and how they are directly connected with value creation opportunities.

The technique ‘hotspots analysis’ belongs to the toolbox life cycle management. ‘Hotspotting’ or ‘hotspots analysis’ is an emergent technique being used in a growing number of different analytical disciplines, so research disciplines and functions within organizations (e.g., R&D, new product development, procurement), and in diverse geographies, in support of the green economy and the United Nations post-2015 Sustainable Development Goals. It can be used to inform government policy priorities, drive growth and innovation in business and empower citizens.

The objective of this chapter is to explain which secondary environmental consequences (often called rebound effects) life cycle assessment (LCA) and life cycle management (LCM) of products need to consider in addition to the conventional product LCA, and which roles different actors in society have in the context of environmentally sustainable consumption. The key issue is that any consumption decision affects the consumer’s household resources of available income, time, and space (volume, area), what leads to additional or reduced overall consumption, within the limits of further consumption constraints and cross-category effects. Exactly how any additional resources are used by the consumer strongly affects the overall consumption. Moreover, this chapter considers the consumption on person, on national and global level, with some focus on sustainable lifestyles, and concludes with recommendations on next steps towards better measurement and management of the environmental secondary consequences of consumption.

Product life cycles and companies’ value chain dynamics now extend to far-away countries, linking a multitude of end-users with numerous upstream suppliers and manufacturers. The breadth of the sustainability issues of popular concern, together with the complex nature of supply chains from which they arise, leads to serious management challenges. These challenges have been met in different ways depending on the interests and the institutional context of the actors. Corporations are strongly focused on optimizing product performance through a reliance on life cycle assessment based procedures. Commodity sectors are often seeking harmonized sustainability performance across a broad geographical range. Management institutions and business associations are providing life cycle management frameworks for corporations, followed up with training, and further research into improved metrics. At regional level some efforts have been made to introduce life cycle approaches, e.g. sustainable procurement, but the formal application of structured life cycle management is not yet widespread. The different approaches taken by the above actors reflects not only their different situations, but also the lack of a clear universal framework for life cycle management and a more generalized toolbox that will support their sustainability ambitions throughout the value chain. Limitations of current life cycle assessment methodologies imply that not all sustainability challenges are addressed in a consistent manner.

Life cycle thinking is on the political agenda and widely used in practice. Moreover, numerous industries have actively been developing life cycle assessment (LCA) approaches for many years. As the authors think that it is in substance “right” to base environmental legislation on LCA, they started to explore and to develop policy options for integrating LCA into legislation. Commissioned by WorldAutoSteel, the authors focused on CO₂ legislation in the automotive industry, but the options developed based on this example can be used for other industries and other environmental impacts as well. It was found that theoretically a broad range of policy options exists, and that practically some of them are already implemented in real world legislation and that there is no clear scientific overall preference for one single option. It was also shown that solutions for most technical requirements are already available, but that a consensus on proper setting of these requirements is missing.

What does it take for life cycle management (LCM) to capture the attention of the financial community? LCM experts face a window of opportunity as technological progress and economic developments lead to greater interest in mainstreaming the sustainability agenda and integrating it in business decision-making. This includes new approaches to the assessment of impacts on Natural Capital, environmental management as well as annual corporate reporting. Having highlighted these, this chapter employs a Green Business Case Model to define ways in which life cycle applications can be employed to link with core financial indicators of special interest to investors. It describes three hypotheses to illustrate where LCM tools can best make a difference, positively affecting core financial value drivers. The author suggests three hypothetical pathways to capture the attention of investors, linking environmental life cycle costing (LCC) and financial, activity-based costing. These are complemented with company case examples. It draws lessons from past work on the business case as well research on environmental versus financial life cycle costing (LCC).

Corporations are being pressured to integrate life cycle thinking and practices across global supply chains. The UNEP/SETAC Life Cycle Initiative has been developing a life cycle management capability maturity model (LCM CMM) to help mainstream life cycle assessment (LCA) and life cycle management (LCM). Pilot projects in small-to-medium-sized enterprises (SMEs) to apply the model showed the companies were able to identify and implement projects that delivered both near-term business value and developed the organizational capability for LCM. A key benefit of the life cycle approach was enhanced cross-functional integration and collaboration with suppliers and customers. The projects did identify a need for more guidance on how to interpret the business impact of environmental concerns and to align LCM efforts with company business strategy. Collaborative networks where more advanced companies can share their knowledge are a key enabler, particularly in developing economies.

The development of life cycle assessment in Brazil began in 1994. Business companies were involved in this process by the government, and in this way life cycle management developed. To support and disseminate LCA and LCM, a group of nine companies created the Brazilian Business Network for LCA in 2013. In 2014, the Brazilian Business Council for Sustainable Development became the coordinator of the Network. Despite the many challenges in promoting the theme in Brazil, the Network is advancing and benefits from the representativeness of large companies and their power to push governments, peers and their value chains.

Professionals in companies in industrialised countries as well as consultants and academics working for these companies have acquired capabilities in life cycle sustainability management (LCSM). Actors in emerging economies are beginning to develop those capacities as well, supported by training programmes. This chapter highlights the work of the UNEP/SETAC Life Cycle Initiative which has worked toward strengthening LCSM/LCA capacities worldwide since its creation in 2002; presents the current conditions for mainstreaming LCSM following an analysis of available knowledge and infrastructure in 18 rapidly growing economies (including least developed countries, rapidly growing and emerging economies) based on four criteria; and discusses the results and proposes a framework to develop LCSM capacities and provides conclusions and an outlook with recommendations. As some capacities in a number of emerging economies are beginning to consolidate, the implementation and changes of current practices toward improved performance by implementing LCSM remain insufficient.

This chapter addresses two major challenges for mainstreaming life cycle management that are intrinsically linked: collaboration and communication. To this end it is argued that in order to radically increase the take up of life cycle based approaches in business and government, life cycle professionals need to enhance global collaboration among themselves, as well as with others and communicate to a wider set of stakeholders. The chapter makes the case that the life cycle community does not have a home, and thus currently does not exist as one coherent and clearly identifiable stakeholder. It concludes that successful communication on behalf of and with the community can only be achieved when the community is formally organized. To this end the newly established Forum for Sustainability through Life Cycle Innovation is presented as a possible way to overcome the outlined gaps and challenges.

Electricity supply is often cited as a significant hot spot in life cycle assessment results, and consequently in life cycle management results. Despite its importance, however, practitioners continue to overuse generic LCI data and different simplified methodologies regarding electricity supply modeling. Such simplifications and inconsistencies can result in difficulties, e.g. to compare the findings of various studies. This chapter is intended to highlight issues on electricity supply modeling, methodological choices and data set selections. Attributional and consequential perspectives as well as systemic aspects of the electricity sector are also reflected. Finally, key challenges and opportunities are summarized and suggestions on how to deal with such problems are provided when possible.

Due to the rapid urbanization and the large contribution of cities to the global environmental impact, urban policies integrate sustainability in the public space design. Current literature has accounted for the environmental impact of the main elements of the urban fabric, although studies have dealt with them individually. This chapter aims to optimize the environmental performance of the urban fabric for supporting planning processes, based on existing life cycle assessment (LCA) data of the main elements of urban fabric: sidewalks, pavements, and the gas, water and wastewater networks. Material selection and lifespan are key issues in the environmental profile of the paved skin, while the installation accounts for the greatest share of the burdens in subterranean networks. The best design consists of concrete sidewalks, asphalt pavements, HDPE (high density polyethylene) gas pipes, PVC (polyvinyl chloride) water pipes, and concrete sewer pipes. Pavements and sidewalks are the most contributing elements to the overall environmental burdens of streets.

This chapter describes the implementation of life cycle engineering, a life cycle management component that focuses on the environmental performance improvement, in the context of automotive design for environment. The purpose of life cycle engineering is to derive measurable technical targets from life cycle assessment (LCA). This approach is described using the example of lightweight design. The progress in this methodology is the ability to calculate measurable targets – such as weight reduction, fuel reduction on a vehicle level, or the amount of secondary material – on the basis of LCA results. It is important to note that LCA is not used here for comparing the environmental performance between competing materials or technologies. Instead, life cycle engineering, as a helpful management tool to support design for environment, shows the technical roadmap of measures that must be taken in order to assure environmental progress over the entire life cycle. In doing so, this tool supports putting life cycle assessment results into business practice.

An important target on the way to a sustainable development is ensuring a more sustainable production and a reduced consumption of energy and material resources. The automotive industry is considered one of the most strategic contributors to reach this objective. On the one hand, the automotive sector represents a meaningful pillar for the economic stability and social welfare of several countries; on the other hand, with its huge supply chain, it is often a cause of negative environmental as well as social impacts. In the past, the main focus was the reduction of environmental impacts in the use phase first, and then along the entire life cycle. More recently, the attention has moved to include the social performance according to the three pillars concept of sustainability. If the target of achieving a more sustainable development is clear, the methodology and tools that should be used to assess the sustainability performance of a vehicle along its life cycle still needs to be settled. This chapter presents and discusses the benefits and challenges of methods and tools that have been used in the automotive industry.

Nestlé is using life cycle management approaches to operationalize the Creating Shared Value concept that is strongly promoted by the company. Following the success of the implementation of PIQET, an LCA software for packaging designers to integrate environmental criteria in their decision-making, Nestlé has decided to develop a specific tool moving from packaging to product ecodesign tool. This tool, EcodEX, is linked to the recipe system of the company to facilitate the realization and improve the quality of LCA. The number of users has increased to reach 700 people today. However, there have been many challenges to overcome, such as: the availability and the management of inventory data, following-up the latest methodology, as well as the training and education of users.