Initiative for Global Environmental Leadership (IGEL) Second Annual Conference-Workshop

March 27-28, 2009

Integrative Thinking About Life Cycle Analysis: Promises & Limitations
Summary Report The promises and limitations of life cycle analysis (LCA) was the topic of a March 2009 conference-workshop convened in Philadelphia by Penn/Wharton’s Initiative for Global Leadership (IGEL). In recent years, as climate change and its attendant challenges have increased public awareness of the environmental effects of everyday business, LCA has seen a resurgence of interest and use as a methodological tool to evaluate and improve business practices, processes, and products. The following article is a summary of the conference-workshop, which addressed four key topics: History and Current Practices of LCA, Valuing Water in Life Cycle Analysis, Best Business Practices and Current Challenges in LCA, and Policy Implications of LCA. In opening the first session, Dr. Marilyn Yakowitz provided a brief perspective on LCA, recalling that the roots of life cycle assessment (also LCA) reach back 40 years to energy audits and other attempts at quantifying resource costs and environmental consequences, as well as to concepts in the physical sciences of assessing materials and mass balance. In the early 1990s, several organizations began developing LCA1 and life cycle management (LCM)2 concepts and practices. Ideas about LCA were interwoven with other topics such as extended responsibility for consumption and production patterns. The Organization for Economic Co-operation and Development (OECD) and the United Nations Environment Programme (UNEP) began small initiatives to explore the usefulness and practicality of


Life cycle assessment (LCA) is a systematic approach used to manage the potential environmental impacts of product and service systems. It is applied methodologically to build a quantitative inventory of environmental burdens or releases, evaluate the potential impacts of those burdens or releases, and consider alternatives to interpret the results and/or improve environmental performance. See ISO 14040.

Life cycle management (LCM) means making life cycle thinking and product sustainability operational for businesses through continuous improvements of product systems, as well as, supporting business assimilation of, for example, integrated product policies. UNEP, LCM Guidebook.


life cycle approaches,3 and the U.S. Environmental Protection Agency (EPA) sent experts to work with the OECD in the early 1990s to promote thinking in the field. Today, with many progressive companies adopting life cycle approaches, Yakowitz noted, many would argue that LCA has come of age. Moreover, LCA requirements have emerged from the public and private sectors. Both have attendant human and financial resource implications and raise concerns about consistency and methodology. LCA requires both resources and expert talent, and practitioners are in short supply. Dr. Yakowitz argued that life cycle approaches are beginning to drive institutional change in some cases and can lead to innovation and be a positive, integrative force. As well, LCA is proving helpful in examining and assessing processes and products. While the initial impetus toward LCA arose from environmental interests, LCAs today are done for strategy, design, marketing, and production reasons, as well as motivations connected with environment, health and safety. In some cases, LCA thinking is gaining wider CEO recognition and moving from being solely the concern of sustainability and environment departments. It appears that LCA is having an integrative role, fostering greater exchange and collaboration across multiple divisions within companies. Penn/Wharton’s IGEL sought to address these and other issues concerning LCA during its second annual conference-workshop. The following report summarizes some of the highlights taken from the four panel discussions. Keynote speakers in addition to those on panel include Anne Papageorge, Penn’s Vice President of Facilities and Real Estate; William Braham, Associate Professor of Architecture at Penn; Ted Emmett, Professor of Medicine at Penn and Deputy Director of the Center for Excellence in Environmental Toxicology; Harry Ischiropoulis, Research Professor of Pediatrics and Pharmacology at Penn; and Donna Cooper, Pennsylvania’s Secretary of Policy and Planning. Life Cycle Analysis – History and Current Practices Panel one of Integrative Thinking About Life Cycle Analysis was co-moderated by Wharton’s Marilyn Yakowitz, Senior Associate Director of MBA Admissions and an IGEL fellow, and Wendi Latko, Manager of Environmental Products and Services in Environment, Health and Safety at Xerox. The panel brought together five thought leaders in the field, each a prolific writer and actively engaged in key aspects of LCA. The group presented a soup-to-nuts overview of LCA, introducing critical issues associated with LCA, first principles derived from physical science and engineering, lessons gained from hundreds of real world LCA efforts with business and industry, the design and manufacturing processes, the energy sector, and finally, bottom-line concerns. Dr. James Fava of Five Winds International launched the panel, noting the growth of private requirements and regulations and the current roles of firms, governments, and international organizations in advancing life cycle approaches. He called attention to life
We use the term life cycle approaches to include LCA and other tools which may not be as quantitative as LCA but which attempt to examine environmental issue s over a product or service life cycle. See UNEP, “Why Take a Life Cycle Approach.”

cycle approaches that influenced product changes, marketing claims, customer interest, reductions in costs of ownership, and other areas that benefited from taking a life cycle approach to inform decision making. Dr. Fava argued that life cycle thinking must be integrated from the top down into the day-to-day operations of the firm – from material selection, product design/development, portfolio/product alignment strategy, mergers and acquisitions strategies, and marketing. He stressed that life cycle management (LCM) can improve performance, communicate information, build capacity, and ultimately promote more sustainable production and consumption patterns. Because LCM is a flexible yet integrated framework of techniques and procedures, it applies to a wide range of businesses. In an example taken from product development, Dr. Fava said, life cycle thinking highlights solvent emissions from paints as a potential environmental issue that product formulators can address by developing water-based paints and reducing overall emissions over the entire life cycle of the product – not just in the manufacturing stage. In another example, procurement questionnaires have been used to identify suppliers that take leadership roles to manage and improve environmental and social performance along the value chain. LCM includes a variety of management tools and systems to better understand products’ environmental life cycle impacts, including environmental or eco-risk assessment, eco-design, total cost of ownership, as well as life cycle assessment. Dr. Robert Ayres of INSEAD conducted seminal work in the field before it had the LCA label. He emphasized first principles: the science, materials cycle, mass balance, energy, laws of physics and chemistry, industrial ecology, processes, and how to measure the components involved. An LCA is a tool for making technology choices in order to avoid costly unintended consequences, Ayers said, describing a number of instances during which LCAs should have been conducted but were not, at great cost to human health and the environment. He cited the use of lead paint for interior walls, the use of tetra-ethyl lead as a gasoline additive, the ethanol-from-corn subsidy program, and the use of lead pipes as plumbing for drinking water as instances in which LCAs could have prevented lead ingestion, mercury contamination, and a myriad of problems from ethanol-from-corn subsidies, including groundwater pollution, deforestation, and high grain prices. Dr. Nabil Nasr of the Rochester Institute of Technology shared his experience from 21 years of leadership in environmentally benign manufacturing, remanufacturing, and sustainable design, including integrated manufacturing studies, resource recovery, and other applied research. He defined sustainable production as the economical creation of goods and services using technologies and processes that are non-polluting, conserve energy, and natural resources while being safe for employees, communities, and consumers.

Nasr cited growing demand from consumers and institutional purchasers for an easy-touse tool to compare and select sustainable products. Industry, Dr. Nasr argued, needs clear, consistent criteria to respond to sustainable requirements. LCAs can provide market advantages to companies that produce sustainable products. In addition, LCA can promote product design changes that reduce environmental and health impacts and provide a path forward for organizations to advance their systems and measure progress. Dr. Noam Lior from Penn’s School of Engineering and Applied Science brought a wide range of issues to the table, with a depth of 35 years of leading work in energy, renewable and fossil fuel, technology, water desalination, and many other areas. Dr. Lior explained that LCA in its full form, when addressing environmental, economic, and social impacts, is a cornerstone of sustainable design and development. LCA provides a comprehensive consideration/analysis of all conceivable impacts of a project, process, or product. Good LCAs allow quantitative comparison between alternatives. They aid optimal choices that are based on chosen sustainability metrics. Lior then provided insight into problems with the use of LCAs and recommended that managers should start with an understanding that LCAs have many possible sources of error, starting with the inability to predict the future and including modeling errors, definition of spatial boundaries and scenario assumptions, and other methodological hazards. Managers must assess these errors and introduce them in LCAs, Dr. Lior explained, and work to validate what can be confirmed and understand their limitations. Lior stressed that the serious, inevitable uncertainties of LCAs – and the difficulty in evaluating them – make absolute quantitative outcomes meaningless. Nonetheless, Dr. Lior believes the LCA process and methodology are valuable in learning more about a particular product or method and its environmental effects. Managers should recognize the inherent uncertainties of LCAs and adjust their expectations accordingly. The LCA policy and management community should also work to develop a better understanding of this uncertainty and variability and move toward developing protocols for reliably characterizing, propagating, and analyzing uncertainties in LCA. Dr. Paul Kleindorfer of Wharton and INSEAD probed the financial implications of LCA for industry, addressing drivers of change, the value chain and its restructuring, carbon impact, regulation and markets, and overall LCA benefits for improved sustainability. Dr. Kleindorfer discussed the considerable efforts in Europe over the past decade to measure and limit human-caused emissions of the primary greenhouse gases (GHG), especially carbon dioxide (CO2), methane, and nitrous oxide. With the Kyoto Protocol in full operation since 2005, a cap-and-trade system is now in effect across the European Union and its 27 member states for CO2 emissions credits. For an electric power company or a cement manufacturer with facilities operating in Europe, the implication of this is that the company must measure its CO2 emissions throughout the year, subject to audit, then provide emissions credits to its Kyoto regulator for each ton of CO2 emitted. Dr. Kleindorfer noted that an active emergent carbon infrastructure now exists in Europe, with a growing number of exchanges, brokers, certification agencies, and information and

research sources arising. Thus, market mechanisms have begun to flourish in response to the requirements of business to value the carbon liabilities their operations imply and to seek the least costly solutions for them. LCA use to determine the total carbon footprint of companies and supply chains and to identify what alternatives are available for reducing this footprint have followed in step with these market developments, Dr. Kleindorfer said. Among other consequences of the move in Europe to reduce GHG emissions is a growing awareness among corporate board members, investors, and the public of the nature and magnitude of the climate problem. A downside of this development is that too great an emphasis on carbon may come at the expense of other resources, such as water, and other environmental impacts, such as those related to heavy metal pollutants and air emissions. Although these issues have been the focus of environmental regulation in Europe in previous decades, they have taken something of a back seat to the “carbon economy” in the past few years. Dr. Kleindorfer noted that perhaps the most surprising aspect of the European experience to date has been the amount of sheer waste in pursuit of carbon mitigation that LCA has identified. For some industries, lowering carbon emissions and energy use by more than 20 percent in the next decade will be very difficult. But for others, including industrial and district heating, the innovations that are emerging for the use and reuse of previously discarded products, materials, and unvalued byproducts are now looking like significant opportunities for carbon mitigation and profit. This new spirit of innovation that has been awakened by the red flag of climate change and powered by metrics and measurement derived from LCA and industrial ecology. It is a very positive element, Kleindorfer argued, arising from the current perceptions of planetary peril and resource exhaustion. Business, if suitably motivated, and markets, if suitably structured, can be powerful forces in addressing environmental concerns, even those as large as climate change, he concluded. Panel one conference participants gathered in four discussion sessions to address the following issues: 1. Private LCA requirements and public LCA regulations and the reality that private requirements today may carry more influence than government regulations. -- What private requirements, regulations, standards/norms are emerging? -- What can be done to streamline and rationalize differing and contradictory guidelines, regulations, and norms? -- What are effective channels for formulating responsible advice and organizing for its delivery? -- What are the front-burner issues being tackled privately and publicly? -- Who are the winners and losers? 2. LCA: forecasting and uncertainty -- How is or can forecasting be used in LCA by business, industry, and academe?

-- Given the many uncertainties, for example in materials, commodity prices, and other variables, how can/does LCA take these uncertainties into consideration? -- What are the practical lessons to help foster useful outcomes, given possible scenarios? -- What kind of expertise is needed for forecasting and dealing with uncertainty? 3. Board-level LCA strategies and involvement -- Are, can ,or should boards get involved in LCA? What are the benefits for boards and senior management in LCA? -- What institutional changes are occurring or might occur? As LCA is seen touching not only the sphere of environment, health, and safety, but other areas as well – including overall firm strategy, marketing, purchasing, etc. – what are the institutional implications? -- Is LCA broader than environmental considerations, and if so, what are the jurisdictional issues? 4. LCA – the impact on the use – and the link with households and consumers -- How to assess? -- Marketing niches and competitive advantages -- Opportunities, successes, and failures Valuing Water in LCAs Panel two examined the likelihood that water shortages will be the next political and economic flashpoints. Moderated by Karen Klimas, Vice President of Global Safety and the Environment at Merck, and Dr. Stan Laskowski, of Penn’s Department of Earth and Environmental Sciences, the panel brought together a group of noted experts from across the globe. The presenters were: Piet Klop, Senior Fellow, Markets and Enterprise Program, World Resources Institute; Jeff Fulgham, Chief Marketing Officer, GE Water and Process Technologies; Hughes Vanden Bossche, head of Suez Environment’s CIRSEE Technology and Innovation Center; and Anne P. Wallin, Director of Dow Chemical’s Life Cycle Assessment Expert Group Anne Wallin stressed the reality that water is the single most important chemical compound for human life, and yet today more than a billion people have no access to safe, clean drinking water. Water is also a key to wealth creation, but essential agricultural and industrial production processes are stifled by water scarcity; it is also integral to the health of the world’s ecosystems, but drought and flooding continue to throw these ecosystems into chaos. Wallin described Dow’s approach to sustainability and its commitment to helping to solve the global water challenge. She argued that providing sustainable solutions is a complex problem that necessitates a collaborative approach from governments, businesses, and non-profit organizations. Sustainability joins availability, quality, and security as critical challenges to maintaining water, energy, and food supplies.

Finding and implementing solutions to these challenges will require the willingness of the private and public sectors to work together using an integrated approach that goes beyond technology, she said. Specifically, Wallin said that governments must have the will to drive pragmatic policies that ensure adequate water and reward conservation; and society as a whole must work to change behaviors, re-use existing supplies, and adopt new technologies. Businesses, meanwhile, must drive innovative technology solutions that solve problems and are economically viable. Wallin outlined several of Dow’s specific water-related actions. They include: • The Dow Water Solutions (DWS) business, which is dedicated to providing technologybased solutions to a broad spectrum of water issues – treating seawater to make it fit for human consumption, removing contaminants in municipal water supplies, developing industrial and residential water purification systems, and reducing and reclaiming water used in industrial processing. • As part of Dow’s sustainability program, DWS is driving a 35 percent reduction in the cost of water reuse and desalination through component technology advances. The pivotal factor in achieving this goal is reducing the overall energy used during desalination. • Dow Water Solutions' FILMTEC™ membrane technology is a key component of the sea-water desalination plant in Perth, Australia, the largest such facility in the Southern Hemisphere. The plant is designed to provide available drinking water for the more than 200,000 residents of Perth. Dow membranes enable the desalination of 144,000 cubic meters of seawater per day. The facility is also partnered with Emu Downs, a Wind Energy Farm that provides electricity into the Western Australia electricity grid at 272 giga-watt-hours (GWhr) per year – more than what is needed to meet the 180 GWhr per year energy requirements of the seawater desalination plant. • Improvements made to Dow's FILMTEC membranes have resulted in a threefold volume increase of treated water while reducing energy requirements, helping to lower the cost of desalinated water production by as much as 20 percent. • In Singapore, Dow is collaborating with the national water agency (PUB) to test the latest generation of FILMTEC™ membranes, which are double the diameter, for water reclamation. The testing program seeks to determine conditions for larger-model membranes to deliver superior performance on both economic and water quality levels. PUB has spearheaded Singapore's comprehensive, diversified water supply strategy in order to ensure that that sustainable water management and use for Singapore's total population. • In Brazil, Dow is working to begin to manufacture polyethylene from sugar cane - an annually renewable resource. Traditionally, ethylene is produced using either naphtha or natural gas liquids. Dow LCA results show that the new process will produce significantly less CO2 as compared to traditional hydrocarbon based processes. Wallin

added that the sugar cane project also highlights the interconnected nature of energy with food and water. Care was taken to evaluate the impacts of water, land use, and farming practices for the project. Dow officials found that while such a plan makes sense in certain regions of Brazil, different approaches are needed in other parts of the world. • Dow and BASF jointly developed a hydrogen peroxide (HP) to propylene oxide (PO) technology, which reduces wastewater by more than 70% and energy by 35% compared to traditional technologies. The new process requires only HP and PO as raw materials, and produces only PO and water, thus eliminating the need for additional infrastructure or markets for co-products. The first facility is running at BASF’s site in Antwerp, Belgium and a second facility is to be built in Map Ta Phut, Thailand.  Dow AgroSciences is working with millions of farmers across the globe to produce higher yields while conserving the precious resource of water through the development of drought-tolerant crops including corn and canola.  Dow scientists have developed polyols from renewable natural oils, primarily soybean oils, thus significantly reducing the environmental impact associated with manufacturing polyols. The process is greenhouse gas neutral and uses less than half of the petroleumbased resources (fuel and raw materials) of current technology. An LCA for this project was recently published in the journal Green Chemistry.4  Since 1995, Dow has reduced the amount of water used per pound of product by 35%. Wallin highlighted the partnership with the government in Terneuzen, the Netherlands, and a local water provider to re-use the city’s wastewater in our largest plant in Europe and second largest globally, as a creative example. As a result of the project every liter of water is used three times instead of once, reducing energy use for water purification by 65%  which equals 5,000 tons of CO2 reductions annually. Panelist Piet Klop discussed the reality that water, for cultural and socio-political reasons, has long been undervalued and under priced. Indeed, just as the late 20th century has seen several oil shocks, the 21st century may be characterized by major water shortages. In the face of scarcity, Klop said, water prices will rise to better reflect its delivery and opportunity costs while emerging water markets will facilitate the trade of water from low-value to high-value uses. Both higher prices and opportunities to sell or lease water rights will drive investments in efficiency. Life cycle analysis is especially complicated for water issues since “all water is local” and has different attributes such as source, renewability, and quality. Klop argued for a risk rather than a "footprint" perspective when considering companies' water issues.

Richard K. Helling and David A. Russell, “Use of Life Cycle Assessment to Characterize the Enviornmental Impacts of Polyol Productions Options,” Green Chemistry, vol. 11, pp. 380-89 (2009).


Water scarcity can create physical, regulatory, and reputational risks at different points in the value chain. Investors, meanwhile, lack the information to assess those risks and need regional, sector-specific "intelligence" concerning, for example, tightening water quality standards, higher water prices, and emerging water markets. Water also creates investment opportunities in infrastructure and metering, efficiency improvements, and other technologies to reduce risk exposure. Jeff Fulgham, Chief Marketing Officer for GE Water & Process Technologies, offered a similar outlook on water scarcity and demand issues. Water stress, he said, will increase significantly in 60 percent of the world, while environmental regulations will drive up costs significantly. Meanwhile, emerging market populations will grow at six times the levels of developed countries. The result, Fulgham noted, will be dramatic increases in water costs. Companies will be driven to implement reuse/recycle solutions to reduce these costs. Through its Eco-Imagination business strategy, GE Water has, like Dow, focused in recent years on overcoming the unprecedented water challenges facing the world today. Fulgham urged conference participants to be proactive about water usage rather than waiting for regulations that force change. Companies must move toward understanding their footprint, starting by taking a hard look at water cost and usage at work and at home. For GE, he told conference participants, “green is definitely green.” The company has realized $25 billion in revenue through green products, Fulgham claimed, and is doubling its investment from $715 million to $1.5 billion into environmentally friendly products. GE is also working to reduce greenhouse gases internally, with a new goal of a net 20% reduction in water consumption by 2012. Best Business Practices and Current Challenges in LCA Moderated by David Struhs, Vice President of Environmental Affairs at International Paper, this panel included presentations by Erin Meezan, Vice President of Sustainability for Interface, and Jeff Rice, a Program Manager in the Applied Sustainability Center, part of the Sam M. Walton College of Business at the University of Arkansas. Additional insight came from Paul Firth, Vice President of Technology for The Green Standard; Emily Davis, Senior Associate, Product Stewardship for International Paper; Bruce Uhlman, a Senior Sustainability Specialist at BASF; and Wendi Latko, Manager of Environmental Products and Services at Xerox. Meezan presented a case study of Interface’s use of LCA, which began in 2000 as a part of an aggressive sustainability strategy. Company officials saw LCA as a tool to move Interface closer to assessing and reducing its environmental impact. In the eight years since, hundreds of LCAs have been completed globally on products and processes, including manufacturing processes and processes related to installing or using products. The company has found it a valuable way to compare facility footprints, to find new processes and solve problems, to introduce new materials such as recycled nylon,

and to compare the environmental footprint of new versus old products as well as the same product over time. Interface, a modular carpet manufacturer, has also used LCA to assess the carbon footprint of its products, though Meezan acknowledged the lack of a well-accepted protocol for this process. In addition, Interface uses LCA to document its footprint reductions in support of product certifications. Interface’s use of LCA has continued to evolve over the years. Initially, LCA was used largely as an after-the-fact tool to assess a product. Today, it has shifted toward more of a “what if” planning tool for future decisions. Using LCA as a planning tool has brought concrete changes to Interface’s business decisions. New products have been scrapped and others found and developed based on LCA results. LCAs have also been integral to examining process changes at Interface, Meezan explained. Today the company has attempted to integrate LCA into all of its business decisions. Global facilities are given incentives to track the use of LCAs as a decision-making tool by a sustainability metrics program that awards points by which all global facilities are measured. Meezan cited several communications challenges, however, that result from this LCAfocused approach. Interpreting and understanding LCA results is often complex and difficult, and outcomes are rarely black and white. Employees and business units such as marketing often seek a single answer or message to promote; this is often not possible. At Interface, therefore, LCAs have traditionally not provided the basis of marketing efforts, though results have been used in one-on-one communication with customers interested in a high level of detail or interested in the company’s commitment to sustainability. Meezan argued against companies pursuing LCAs for perceived marketing advantages. Two exceptions at Interface are LCAs that have supported the company’s carbon neutral product claims as well as the launch of a new product called TacTiles, though company officials now believe including information on these LCAs was ultimately not an effective marketing strategy. Similarly, Meezan opposes using LCA results to make product comparisons against competitors for marketing purposes because such assertions cannot be proven unless LCAs are conducted on both products then verified by a third party. In general, Meezan discouraged the use of LCAs as an external communication/marketing tool. Meezan also described changing market/customer interest in LCA data. Although a product’s environmental impact is still top-of-mind for a small fraction of Interface customers, the burgeoning green building movement is changing the overall business environment. Increasingly, architects, designers, and corporate customers express an interest in Interface’s LCA efforts, and Meezan expects universities to quickly follow suit. If federal policies expand to mandate LCA for purchasing decisions in federal agencies, LCA use could mushroom in several sectors in the years ahead.

Because of the challenges of marketing products with LCA data, in particular the challenges that come with product comparisons, Interface has moved toward the use of “Environmental Product Declarations” (EPDs) becoming one of few U.S. manufacturers to issue third-party verified EPDs on products. Meezan believes EPDs are a better, simplified way to communicate the impacts of products to customers while also eliminating the issue of product comparison problems by establishing a fixed set of boundaries in the EPD. Wendi Latko of Xerox agreed. At Xerox, LCAs are not required for all product development; instead the tool is used in the company’s time-to-market process with each phase including life-cycle elements that are considered and reviewed by the product development team. Specific criteria are assessed and evaluated with various levels of rigor depending on the phase of the product development process. International Paper’s Emily Davis said that she believes LCA use is appropriate within most divisions of an organization, particularly in the design and product use phases. But while interest in LCA is high among employees, most don’t understand its use or results. Rice, who helped to manage Wal-Mart’s 2007 global GHG inventory, described lifecycle approaches underway at the world’s largest retailer. With 66,000 suppliers sourced from 70 countries and nearly 100,000 stock-keeping units (SKUs) at a typical supercenter store, implementing LCA systems at Wal-Mart is a monumental undertaking, Rice said. Its potential uses are myriad, however, from prioritizing supply chain initiatives and finding supply chain inefficiencies to informing product promotion and buying decisions. The company’s use of life-cycle approaches is two-fold, Rice explained. First, Wal-Mart has created an LCA system to prioritize supply chain initiatives. This started somewhat informally as sustainability networks across various company departments – work that addressed the company’s carbon footprint in areas from building design to products. More recently, an input-output model was created to prioritize supply chain GHG initiatives. Wal-Mart is also working toward a system that would allow its buyers to incorporate LCAs into purchasing decisions. The company is also leading an effort to create a consumer good sustainability index that would drive Wal-Mart’s supply chain toward sustainable business practices. More specifically, the index would continually track Wal-Mart’s supply chain performance, ensure compliance with ethical standards, score products and suppliers, and allow for scoring of ongoing buyer/supplier progress over time. It will likely be organized around key topics, Rice said, including energy and climate, material efficiency, natural resources, and people and community (social issues). An LCA approach will help Wal-Mart in prioritizing the product categories, impact areas, and the metrics it uses, Rice said, though he added that many outstanding questions remain, such as whether the index will be pure LCA, LCA-based, or LCA-informed – as well as how the index would be governed.

At BASF, sustainable development drives innovations in chemistry, presents market opportunities for eco-efficient products, and creates true, measureable value for BASF and its customers, Bruce Uhlman said. The company’s ability to measure sustainability is critical to its integration into business strategy and decision making. BASF’s methods for measuring sustainability throughout the supply chain vary from the simple to the complex. BASF’s eco-efficiency analysis, for example, is a quantitative, science-based, strategic assessment tool used by the company’s business units to evaluate the environmental and economic impacts of products and processes over their entire life cycle. Created with the assistance of an external consultant, the methodology is based on ISO 14040-14044 standards for life-cycle assessment with additional improvements that allow for timely review and decision-making at all business levels. Since developing the methodology in 1996, Uhlman noted, nearly 400 such analyses have been completed on products ranging from building and construction materials to packaging systems and personal care products. Six questions guided small group discussions following panel three: 1. What needs to take place to better enable comparability between LCAs? Are environmental product declarations effective enough with the additional restrictions and guidance? What else needs to be in place in order for EPDs to be more effective? 2. What challenges do people and organizations face as new cross-sector collaborations emerge between business, government, NGOs, and academic institutions? What opportunities are these new alliances creating? What role should each play in the LCA field? 3. Discuss the focus on carbon footprints versus LCA. Are we missing the boat by focusing on carbon footprints instead of looking at the bigger picture? 4. Will the advent of simplified measurement techniques, software, and online assessment tools create a landscape for businesses where customers are confused about products and impact? 5. What internal corporate programs or staff should resource LCA research and study work? Should companies do their own work or rely on academic expertise and consultants? 6. Should LCA be used to change products or change consumer actions? Life Cycle Information and Policy Implications Moderated by Ellen Goodman, Professor of Law at Rutgers University, this panel drew on the expertise of the following experts: Mary Ann Curran, Director, System’s Analysis Branch, Life Cycle Analysis, EPA; Rebecca Tushnet, Professor of Law at Georgetown University; Dr. Mario Teisl, Professor of Economics at the University of Maine; and

Laura Forlano, the Kauffman Fellow in Law at the Information Society Project at Yale Law School. Despite the many questions that remain, Goodman noted, LCA-related information is being communicated in the market and is influencing policy at the EPA, the Federal Trade Commission (FTC), and state and local levels. The panel addressed these policy choices, particularly as they relate to consumer protection. Whether advertising is truthful depends on what consumers understand advertising to mean, Goodman said. Thus, marketers are not just in the role of giving consumers labels and LCA data points, but are in the role of educating consumers about how to understand particular claims in particular ways. Communicating information gleaned from an LCA presents two realities that often work at cross purposes, Goodman argued. The first is market efficiency, that is, the production of information to allow consumers to make informed choices. Communicating LCA information is also about another reality involving underlying externalities, underlying environmental goals, and attempts to drive or structure markets in directions that reduce negative environmental impacts. This second dimension can involve attempts to change or skew consumer choices away from what the market currently offers, Goodman said. Panelist Mary Ann Curran shed light on her life cycle work at the U.S. EPA’s office of research and development. Curran stressed that the EPA has no plans to regulate LCA or otherwise require manufacturers to conduct LCAs of their products. In addition to industrial applications, life-cycle approaches can also be used within government in policy and regulatory development, though such an approach is difficult within a structure like EPA’s, which is based on individual “silos” that focus on various environmental media such as air, water, land, and solid waste, Curran said. These divisions make the promotion of life-cycle thinking difficult to advance within the EPA itself. Curran’s early efforts in LCA research largely focused on building awareness of the need to look holistically at business products and processes using a multi-media, multiattribute approach. This approach was later standardized by the International Standards Organization (ISO). ISO also established that LCA stands for “Life Cycle Assessment” not “Analysis.” An analysis is strictly a quantitative exercise, while an assessment allows for more qualitative information in the process. Life Cycle Management, Curran noted, is another term growing in popularity. The goal of LCM is to integrate information that is generated by different tools. LCA captures environmental information, but information about economics and social aspects (the other pillars of sustainability) are also needed. Though the term “life cycle assessment” has become increasingly popular, its use is inconsistent, Curran said. She cited three examples of this inconsistency: greenhouse gas

analysis, end-of-life management, and life cycle thinking. Each approach is driven by specific policy concerns. Biofuels are often subjected to GHG life-cycle analysis in order to meet the growing concern of global warming. Materials that raise concerns at the end of their useful life, such as nanotechnology materials, lead to end-of-life management efforts. Life cycle thinking is used in areas such as eco-labeling or green purchasing, where the entire life of a product is considered, but conclusions about what is good for the environment are made a priori (such as requiring a minimum recycled content rather than engaging in a broader risk-based analysis). Such simplifications in the use of LCAs are largely due to the lack of readily available life-cycle inventory data, which is needed to model the entire product system. In Curran’s current research at the EPA, she is evaluating various life-cycle based approaches and comparing the information they generate. She has identified the following ten approaches: carbon management, comparative risk assessment, ecological footprint, energy analysis, fuel cycle analysis, GHG life-cycle analysis, LCA, material flow assessment, net energy balance, and sustainable development indicators. These approaches are useful tools toward sustainability, but their results must be interpreted within their scope and original intent, Curran stressed. LCA’s holistic approach is the cornerstone of sustainability. A key hurdle for the further promotion of LCA methodology and practice is the lack of reliable, available data to conduct lifecycle inventories. Much additional research is needed in this area. Mario Teisl of the University if Maine addressed the effectiveness of eco-information strategies. Companies are increasingly using eco-labels, he said, to tap heightened consumer awareness and interest in the environment. While some industry sectors have adopted eco-labeling to take advantage of specialized product markets and potential product premiums, others have been very skeptical about the touted environmental and economic benefits of these approaches. Given that eco-labels are not costless, labeling and certification programs may not achieve their objectives unless consumers are willing to pay for the underlying improvements in the production practices specified by the program. Consumers must also notice, understand, and believe the information presented to them by the product manufacturer. Thus, the success of labeling is contingent on consumer behavior and of the labeling program itself. What factors influence eco-buying? Consumer tastes and preferences, which can include a person’s level of environmental concern, their perceptions of their effectiveness as an eco-consumer, their basic norms, and their faith in the eco-behavior of others, Teisl said. Barriers to environmentally friendly consumption also exist, including the idea that buying environmentally preferred goods is less convenient and costly, or may entail accepting a decrease in product quality, especially when the consumer is unfamiliar with the product or the eco-labeling program. Recent research has also shown that ecomarketing and labeling can increase consumers’ perceptions that the product is inferior across several non-environmental dimensions Teisl outlined characteristics of eco-labeling programs that he believes are important to their success. They include compulsoriness (the degree to which all firms are required to

provide product information), explicitness (the degree of detail given to consumers), standardization (the degree to which information is required to appear in a uniform format), and source (the organization that provides the information). He addressed the issue of compulsoriness, explaining that labeling programs are either mandatory or voluntary, with most falling into the latter category. Voluntary policies often yield an information environment in which consumers lack data on key product attributes. As a result, consumers must infer a value for missing information by looking at equivalent attributes from other brands or other attributes of the same product. Others suggest that consumers may not infer missing values at all, but merely pay less attention to a product with missing information. Teisl’s own research has found that a move from voluntary to compulsory labeling does not significantly change buying behavior because respondents correctly infer that the lack of environmental information signals that the product performed relatively poorly on this characteristic. Teisl added that as labeled products become more common, they are more likely to be noticed, appear credible, be useful in making cross-product comparisons, and may influence some consumers’ perceived effectiveness. In explaining the issue of explicitness, Teisl explained that consumer scientists have long understood that more information is not always better, even if accurate, because of the danger of information overload and distraction from more authoritative information sources. However, increasing the amount of information given on an eco-label can significantly increase the credibility of the label and the respondents’ ability to correctly identify an environmentally friendly product, research has found. Other research indicated that both simple and more detailed information improve consumer efficiency, but adding some forms of eco-information can backfire, leading to decreases in the perceived credibility of the label or the perceived eco-friendliness of the product. Studies suggest that standardized displays provide the largest benefit to consumers because they increase the number of products or attributes considered during choice, allowing for more accurate choice decisions. However, standardization can also mask differences. For example, Teisl and a colleague found that when respondents view multiple products bearing a standard eco-label with different prices they assume the ecocharacteristics of the products are similar and are not willing to pay a price differential between the two certified products. However, when respondents view a similar situation with non-standard eco-labels they assume the environmental characteristics of the higherpriced product are better, and at least some of them are willing to pay the higher price. The success of an eco-labeling program depends on the credibility of its label. Several studies have found that consumers are skeptical of eco-claims on products, while others indicate that labels provided by independent sources are trusted more than information provided by business/industry. Teisl concluded that when it comes to debating the effectiveness of eco-labeling programs, arguments that the lack of consumer response to eco-labeled products shows a

lack of interest and concern among consumers are not necessarily true. An alternative explanation, he suggested, is that consumers do care about and are willing to pay for more environmentally benign products, but the current state of labeling them well and effectively is slowing the development of this market. Rebecca Tushnet of Georgetown University Law, who specializes in trademark law and the relationship between the First Amendment and false advertising, addressed the issue of how life-cycle approaches become questions of advertising law. When making a representation in an advertisement, Tushnet advised, companies must always consider what a reasonable consumer will think or perceive. A reasonable consumer is moderately skeptical, but believes in specific factual representations. In addition, they believe there is evidence behind these factual representations – thus companies must be able to back up their marketing claims. Consumers don’t and won’t understand the details – labels such as “assessment” versus “analysis” are meaningless to them. In the U.S., three sets of potential challengers of false claims can be identified. First, the government, acting through the FTC and its guidelines, may set down rules for marketers with examples of what is and isn’t acceptable. Carbon neutrality and offsets, for instance, are currently a major issue; LCA is a new development since the FTC’s guidelines were first introduced. Two other potential challengers to false and misleading advertising claims are the Better Business Bureau and consumer lawsuits. Companies must also be aware that the European Union regulates comparative claims much more rigorously than in the U.S. Tushnet offered examples of advertising that attempted to capitalize on heightened consumer interest in eco-friendly products but that in fact, misled consumers. These claims include those that have advertised “Animal Care Certified,” “raised without antibiotics,” “degradable,” “environmentally friendly,” and “without mercury” – each of which was found to be misleading for a variety of reasons. LCA done fairly and in good faith can strengthen a company’s ability to make data-based claims. Under the current case law, Tushnet said, if a company’s methodology is reasonable and done without cherry-picking or shading the facts, then it is not likely to be held liable for false advertising. One caveat: If the FTC or the EPA decides in favor of one research method or metric, companies will need to use it. Legal developments should therefore be followed closely. Tushnet stressed that false claims are not the same as misleading ones, and that companies should be wary of both. Substantiation will be needed in dealings with the FTC and the Better Business Bureaum, as well as competitor or consumer lawsuits. Substantiation means that claims should have scientific backing. Finally, companies should beware of using terms such as “environmentally friendly” as it raises regulatory hackles. Good LCAs may ultimately become the only way to credibly make general “environmentally friendly” claims.

In her presentation on “New Media, Ubiquitous Computing and Life Cycle Analysis,” Laura Forlano noted that the environmental movement has served as a model to media, telecommunications, and technology policy fields when it comes to engaging citizens in policymaking involving complex scientific issues. She described a growing interest in designing applications for sustainability by the pervasive and ubiquitous computing communities as evidenced by recent conferences and journal issues dedicated to the topic. New media and ubiquitous computing refer to hardware, software, tools, and various applications such as e-mail and online communities and including Google Groups, blogs, wikis, micro-blogging such as Twitter, mobile social networking, mapping applications and radio frequency identification tags (RFID), wireless sensors, and WiFi networks. Use of these tools has decreased the cost of connectivity, collaboration, and innovation, which has enabled a number of important developments including the growth of what is known as “peer production” as exemplified by open-source software, emergent forms of organizing such as MeetUp groups, and other new forms of citizen participation. In the design field, an emphasis on human-centered design has emerged. Human-centered design focuses on creating products and services that are better aligned with people’s uses and needs. Companies such as Xerox, Intel, and IDEO have pioneered the use of ethnographic observations and qualitative research in order to understand counterintuitive uses, meanings, and cultures – as well as to identify unmet needs. For example, IDEO recently conducted a project for the Department of Energy (DOE) and found that despite widespread messages about the importance of environmental conservation, citizens have diverse and counterintuitive reasons for wanting to conserve. According to IDEO, this helped transform the highly technical culture at the DOE into one that valued a humancentered focus by telling meaningful stories about personal relationships to the natural environment. By looking at recent examples from new media art and ubiquitous computing projects, researchers can begin to understand some of the ways that social media and emerging technologies might support the goals of life-cycle assessment at various stages, from raw materials, to manufacturing, to use and maintenance of products, to recycling and waste management. One example of a ubiquitous computing prototype related to measuring air quality is the Pollution e-Sign Project, which communicated the local air quality to passersby through messages sent to mobile and wireless devices. New media artist Natalie Jeremijenko’s One Tree Project planted 1,000 cloned trees in different locations around the country and then monitored their growth. Similarly, she designed a printer application that printed tree rings every time a full tree of paper was used. These projects, Forlano said, are intended to raise awareness about raw material use. Pervasive computing technologies can also be deployed to monitor energy consumption in homes, offices, and factories, Forlano said. There are tradeoffs, however, between deploying these monitoring-and-measuring technologies and their own LCAs and environmental impact. In the manufacturing sector, Marc Smith’s AURA prototype project, designed at Microsoft Research, allowed consumers to learn more about a

company’s practices by scanning a bar code on a mobile device at the point of purchase that would link to recent articles about the company. Forlano also outlined a project still under development in New York City that attempts to address the lack of accurate and timely information for public transportation passengers when buses and subways are running late. Robin Chase, one of the founders of Zip Car, is working to create an interface for New York City buses that would give citizens access to real-time bus information while also allowing free wireless Internet access with an open-source, mesh-network infrastructure. Open-source hardware and software may prove to be a more sustainable choice because proprietary equipment is not secured from a single vendor and then discarded at the end of a contract, but rather maintained by a community of developers. Finally, in the area of citizen participation and empowerment, Eric Paulos’ Urban Atmospheres and Living Environments Lab projects have focused on enabling citizens armed with mobile phones equipped with wireless sensors to collect and monitor environmental factors such as air quality. Debate still exists, however, about the quality of the data being collected since high-quality wireless sensors are still quite expensive. Forlano summarized that new media art and ubiquitous computing projects offer myriad ways for the sustainability community to integrate new communication technologies into the process of LCAs. By looking to transformations underway in media technologies and telecommunications fields, companies may be able to create new strategies for managing raw materials, collecting environmental data about manufacturing processes, and more directly involving consumers in the creation of new tools to monitor the use, recycling, and discarding of their products. Two breakout groups addressed the following issues: Lifecycle Information and Policy Implications – Information Technology, LCA Assessments, and Communication: 1. How might consumers be involved in recording, tracking and reporting LCA data? 2. What tools might be used i.e. blogs, social media, etc.? 3. How can pervasive and ubiquitous computing technology be employed during LCA? What are the environmental impacts of deploying these technologies? 4. Given the need for collaboration among industry, government, non-profit and consumers, what new tools and networks are needed to facilitate these partnerships? Lifecycle Information and Policy Implications – Advertising, Marketing, Labeling, and Policy: 1. What governmental agencies should lead on LCA labeling and communication?

2. What reporting should be required? 3. What labeling regimes are best adapted to promote innovation and consumer adoption? 4. How are or can labels, certifications, and disclosure be harmonized internationally? 5. How can labeling and other communication be used to improve choices between product categories? Conclusions A number of questions emerged from the conference-workshop sessions that warrant further study. Conference-workshop participants discussed at length but did not come to agreement about whether carbon footprints should be the driver of LCAs as opposed to a broader focus on product scorecards or product labeling. Similarly, debate exists about the ultimate role of LCA – should it be used for marketing, manufacturing, or both? It is clear that some significant differences arise between various internal groups. Finally, some business participants questioned whether the expansion of LCA methodologies strengthens or weakens free markets as its use could limit choices and materials or be used to impose value judgments. Several key takeaways also emerged. Participants argued that future research on LCA should focus pragmatically on how businesses can apply LCA in their day-to-day operations. Businesses today are working to develop tools to assess sustainability, with the ultimate goal of reducing costs by cutting energy needs and reducing raw material consumption. Given the reality that LCAs are an important and detailed tool in this process, how can businesses better use it? How can the data be improved and the process simplified? Clear frames of reference for LCA terminology and the application of life cycle approaches are also necessary. One recommendation was the educational programs, perhaps including executive education, should include LCA coverage. Several executives argued that sustainable development can only be effective when it is incorporated as a key strategic guideline from the top-down and given the necessary management systems and resources. Also, a range of executives from a variety of industries presented information that demonstrated the value and long-term economic success that came from incorporating principles of sustainable development through LCA-based management strategies and practices. A range of concepts relating to sustainable development – going beyond LCA – should be integrated in the everyday thinking of business managers, to the earliest stages of product and research and development processes, much in the same way that companies have integrated concepts of safety and risk management, several panelists stressed. In addition, further education and awareness about sustainable development supplemented with consistent and clear definitions and understandings of terms such as “life cycle analysis,” “life cycle assessments,” and “life cycle management” are critical to success.

Recommended Readings: Lynn L. Bergeson, “The Explosion of Green Marketing Claims: FTC Jumps into the Fray,” Environmental Quality Management (winter 2008) (reprinted in Washington Watch, Wiley Periodicals 2008). Daniel Goleman, Ecological Intelligence: How Knowing the Hidden Impacts of What We Buy Can Change Everything (Broadway Business 2009). James A. Fava, “Can ISO Life Cycle Assessment Standards Provide Credibility for LCA?” Building Design and Construction (November 2005), pp. 17-20. Shannon M. Lloyd and Robert Ries, “Characterizing, Propagating, and Analyzing Uncertainty in Life-Cycle Assessment: A Survey of Quantitative Approaches,” Journal of Industrial Ecology, vol. 11, pp. 161-78 (2007). Rita Schenck, “The Business Case for Life Cycle Assessment in US Policy and Legislation” (Institute for Environmental Research and Education, American Center for Life Cycle Assessment, February 2009). Scientific Applications International Corporation (Mary Ann Curran, work manager for U.S. EPA), “Life Cycle Assessment: Principles and Practice” (EPA/600/R-06/060, May 2006). Susan Svoboda, “Note on Life Cycle Analysis,” (National Pollution Prevention Center For Higher Education, University of Michigan, March 1995). United Nations Environment Programme, “Why Take a Life Cycle Approach?” (2004).

Final note: Thanks is due especially to Nancy Moffitt, who attended the conferenceworkshop and prepared the original draft of this report on behalf of IGEL. Thanks also to our internal editors, Joanne Spigonardo and Marilyn Yakowitz, as well as everyone on the panels who have contributed the original content as well as changes and final edits. Thanks also to Elaine Wright for moderating the small group discussions, which were more lively and more provocative of further thinking than we have been able to capture in this report. – Eric Orts

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