Life Cycle Assessment in de-risking and improving supply chains

We asked Nigel Topping, Chuck Grindstuff and Harald Floring how they see the role of Life Cycle Assessment in de-risking and improving supply chains?

Nigel Topping, CIO, Carbon Disclosure Project.
“The vast majority of companies do not have a good understanding of their entire value chain. Everything is connected, things change so quickly and we are at or beyond limits with so many resources that without proper LCA to understand risk, it can be devastating to business. There is a definite need to both understand the risks through LCA and put in place a sound strategy to address the risks throughout the supply chain. With this preparedness, a company has foresight into potential problem areas and can respond by making changes to a product over time throughout the supply chain. This will prevent the devastating impact of getting blind sighted, and help to assure the health of the business.”

Chuck Grindstaff, CEO, Siemens PLM Software.
“The high degree of standardization in material selection and LCA reduces design risks and creates a basis for innovation along the supply chain. It is imperative that the supply chain stay in sync as environmentally-minded design practices evolve from conformance to substantial regulations, to multi-domain optimization.”

Harald Florin, Director of Product Sustainability, PE INTERNATIONAL
“LCA is the proven method to bring complete transparency into product life cycles on every level. It helps to offer an understanding of a changing world, changing technologie and their implications. One of the biggest supply chain risks is a failure to think through decisions and understand risks at every level. With LCA, businesses have a tried and tested approach that will provide the visibility needed to effectively manage and improve their supply chain. “

Environmental Footprint

One of the potential hot topics for the near future is the Environmental Footprint. Do you think that this is becoming a game changer in sustainability? How are companies preparing for this?

Ramon Arratia, Sustainability Director EMEAI, Interface.
“As written in my book Full Product Transparency, I think environmental product declarations are the biggest changer in sustainability because they link the entire value chain. You can influence demand, you can redesign products, you can transmit priorities through your supply chain, and legislators can reward sustainable products or punish products with higher environmental impact. At Interface, we produce EPDs for all of our products and are heavily redesigning each one so that the embodied impacts are reduced.”

Michael Spielmann, Principal Consultant, PE INTERNATIONAL
“In my view, it may tackle one critical issue: Green Washing. By developing sector and product group specific guidelines that should guarantee the improvements claimed by producers are consistent, solid, and reproducible. This will avoid the risk of green washing which could jeopardize the entire sustainability issue. I think having a set of product category rules will be a critical component to the impact of this initiative in the future.”

Michele Galatola, Policy Officer, EU Commission DG Environment.
“Absolutely. There is growing pressure on companies to show they produce in an environmentally friendly way – both at the level of individual products and as organizations. Information on environmental performance can be used in the management of supply chains as an efficient indicator of how resource- efficient a company is. At the same time, it serves to show how green a product or organization is, because consumers increasingly want to better understand the environmental impacts of their consumption. The commission will soon adopt and publish consistent methodologies for the calculation of the life cycle environmental performance of products and organisations. Named PEF (Product Environmental Footprint) and OEF (Organization Environmental Footprint), we believe these will become more and more used in public and private initiatives, providing a more consistent and reliable way to communicate environmental information both in B2B and B2C contexts.”

Michael Betz, CEO, PE INTERNATIONAL.
“The Environmental Footprint Initiative as driven by the EU Commission might indeed become a game changer. Irrespective of that, sooner or later corporate and product footprints, declarations or LCAs will definitively become mainstream. Our key clients prepare for that by bringing manual and not integrated approaches to the next level. Our role is to help them automate and rationalize sustainability and compliance data collection, transfer, decision making and communication. In this context, LCA data collection and transfer in supply chains will achieve the critical importance it deserves.”

How do sustainability strategies help to mitigate against a limited supply of resources?

Gabriella Zahzouh, Global Environmental Manager, British American Tobacco
“As we rely extensively on natural resources, our strategies help us to forecast future scarcity issues and ensure supply and demand is in balance. Our local reforestation programmes are good examples. We understand through local assessments, what fuels are used for curing our tobacco and it is vital to us to ensure that our farmers have a ready and sustainable supply available to them year over year without negatively impacting the biodiversity around us all.”

Rodolphe d’Arjuzon, Global Head of Research and Development, Verdantix
“These strategies help you to understand exposure so that you can create sensible risk management plans. They also help you to know your suppliers so that you can work with them. There is a lot of this going on in the food sector. Companies such as Unilever, Nestle, and PepsiCo have created programmes to directly engage, teach and support their agricultural suppliers. It also improves the robustness of weak links in the chain. For example, working directly with farmers on better irrigation methods can help conserve water while boosting yield.”


Robert Gabriel, Director of Corporate Sustainability, PE INTERNATIONAL
“Any sustainability strategy will include the management of energy and material resources in its core. Understanding consumption, efficiencies and sourcing of resources are keys to evaluating and reducing the risks related to limited resource availability and price increases. In addition, a proper sustainability strategy will also address the opportunities to increase the competitive edge, whether by driving the top line with green product portfolios, or by growing the bottom line with the reduction of resource-related production costs.”

What are the impacts of limited resources on business now and in the future?

Bringing together the best and the brightest sustainability thought leaders and practitioners from around the globe is always exciting for us. The opportunity to share success stories, ideas and make connections helps further advance the evolution of the market that we all serve; And, ultimately helps organizations create further tangible business value from sustainability. This year we decided to pose some questions to our esteemed speakers, attendees and PE INTERNATIONAL leaders in advance of our event. The questions relate to the topic of the Symposium “Sustaining business success and growth in a resource constrained world” and the related program highlights. It is our hope that these casual interviews will help to evoke meaningful dialogue of the most pressing topics facing our customers today.

Q 1. What are the impacts of limited resources on business now and in the future?

 Moritz Ritter, CEO, The Ritter Group.








“The first issue is a cost factor since the cost of energy sources along the supply chain has an impact on competitiveness, as well as the cost and availability of raw materials. About 80% of the total energy consumption comes from fossil fuels. With the exception of natural gas (shale gas) whose price has decreased in countries such as the U.S. due to fracking, companies must deal with the increasing energy prices of fossil fuels. Businesses need to think in the future of a wide range of alternatives which include both fossil and renewable energy sources. Assuming that the real costs of fossil fuels will ever be accurate and transparent, renewable energy sources will be seen not only as the most environmentally responsible decision but also the most cost-efficient, and in the long run, the only available.”


 

Neil D’Souza, SoFi Software Product Manager, PE INTERNATIONAL. 

“I see the impact as increased costs of production in accordance with the basic principles of supply and demand. It implies changing supply chains and business relationships, elevating the importance of social issues of fairness and equitable distribution of resources, a focus on efficiency to reduce waste and greater importance on monitoring. There will be a case of ‘innovate or die.’ I also believe in the long term it can change how we benefit from globalization where companies source materials from one place to deliver products in another. This will be the cornerstone of economic success for major economies and will inevitably change quite dramatically in the next 10 to 15 years.”