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What is the Real Cost of Your Products?

Posted by Matthew Gardner on Mar 5, 2015 9:00:00 AM

Editor's note - Matthew Gardner is Managing Partner of Sustainserv, Inc., an international consultancy helping clients develop sustainability strategies, programs and communications.

What are the environmental impacts associated with the products your company provides to its customers?

MosiacA growing number of companies are seeking to understand, document, and in some cases, take responsibility for the entire range of environmental impacts that their products have, from the extraction of raw materials, to manufacturing, to distribution of the product, to usage, to the end of the product’s usable life. It’s a far different approach than evaluating the cost of a product only to the point when it leaves the factory and reaches the customer.

Why would a company broaden its view of environmental impacts?

  • The company may want to market a product as “eco-friendly,” or “green,” promoting the fact that it offers environmental benefits over other products.
  • The company may wish to understand the factors that contribute to not only the cost of manufacturing a product, but to the total cost of ownership of that product – another potentially favorable angle from which to market.
  • There is increasing interest among employers in formal environmental certifications for some types of products, and these certifications often require formal accounting methodologies (e.g. ISO 14040/14044). 

Life Cycle Analysis (LCA) is a sophisticated method in which material and energy inputs to a product are cataloged, and the environmental impacts calculated, scaled and weighted into an overall environmental profile. By understanding how a product is used in the “real world,” and what its typical disposition is at the end of its life, you can develop a quantitative picture of the relative impact of the manufacturing process versus the use phase versus the end-of-life stage and see where the largest opportunities for improvement may lie.

For example, LCA can quantify whether there are energy and environmental benefits to using recycled versus virgin materials in a product. Those same approaches can uncover parasitic energy losses in electronics, or identify opportunities to show end-users how to use products more efficiently to lower their operational costs.

One of the criticisms of LCA is that comprehensive and rigorous reviews can be complicated and time consuming (read: expensive), especially when analyses related to toxic materials and ecosystem impacts are included. Sometimes the level of detail required by the ISO standards don’t provide results that justify the time and expense required.

There are alternative and cost-effective approaches to Life Cycle Analyses called “screening” LCAs. The idea is that smart, informed approximations regarding materials used and processes employed enable the user to focus efforts on alternative design or manufacturing approaches that address the stages that are of most concern. 

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Topics: Environment, Energy, Sustainability

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