Up until now, life cycle analysis (LCA)—a tool used to assess the environmental impact of a product’s development, from raw material extraction through materials processing, manufacturing, distribution, use, repair and maintenance, and disposal or recycling—has mostly been performed on one product at a time. This limitation makes it very time-consuming and expensive for an organization to quantify possible positive or negative environmental impacts.
The new methodology, outlined in the October 2012 issue of Journal of Industrial Ecology, could greatly reduce the cost and effort associated with carbon footprinting, a measurement of the greenhouse gas (GHG) emissions caused by an entity. The tool is designed to generate estimated emission factors for materials, thereby eliminating the time and expertise required to manually map a product’s ingredients and packaging materials to LCA databases.
“Often, but not always, high GHG emissions in supply chain materials and internal operations correlate with high cost, inefficiency, and exposure to fossil fuel prices. Therefore, determining GHG emissions can often point to potential not only for reducing carbon but also overall cost, supply chain inefficiencies, and price risk,” said Dr. Christoph Meinrenken, the study’s lead author and an Associate Research Scientist with the Earth Institute and adjunct professor in Columbia Engineering. “And even in situations where this correlation is not present (or where indeed lowering emissions would mean higher costs) at least knowing the effect on GHG emissions means that executives do not have to make those difficult decisions blindly,” he added.
Rather than blindly reducing its overall pollution, a company can use this software to identify concrete areas of improvement. “For example, if a company were to consider replacing oil in their snacks with another alternative (say from another supplier), there is a long list of implications: GHG emissions and costs from growing and processing the oil, energies for ‘baking’ the affected snacks (again GHG and cost), shipping distances (GHG and costs), possibly health implications. Because the LCA tool, by its very nature, traces in microscopic detail which products, brands, factories, and logistics would be affected by the considered oil replacement, it has the potential to offer the company’s marketing, brand, and financial managers a rich amount of actionable information to support their decisions,” said Meinrenken.
Started in 2007, the project’s original objective was to evaluate and to standardize PepsiCo’s calculations of the amount of carbon dioxide emitted as a product moves through the supply chain. Meinrenken and his team applied the innovative life cycle analysis tool to a database of 1,137 PepsiCo products to estimate carbon footprints and to assess resource constraints. The underlying algorithm is compliant with the World Resources Institute’s “accounting rules” for bottom-up, full life cycle product carbon footprinting.
“The newly developed software promises to not only save time and money for companies like PepsiCo, but also to provide fresh insights into how companies measure, manage, and reduce their carbon footprint in the future,” said Al Halvorsen, Senior Director of Sustainability at PepsiCo.
Though the methodology is not based on any specific models previously used for carbon footprinting, it does share systematic similarities with a few savvy social media platforms. “The facebook and netflix inspiration refers to the general idea of mining ‘big-data’ to arrive at meaningful conclusions (whether that’s a conclusion about what movie a person may like, a possible romantic or ‘friend’ match, or how much carbon is emitted during manufacturing and use of a car), said Meinrenken. “One specific application of this general idea in our methodology is that we use statistical algorithms to predict the so called ‘carbon emissions’ (i.e., combined emissions of all GHG) of all the individual raw or intermediary materials that are used in manufactured goods such as orange juice, laptop computers, or a pair of jeans.”
The speedy software does make some trade-offs, as the margin of error on an output can be +/- 20 percentage points. Meinrenken and his team are actively looking for new corporate partners who can pilot the software. “Having more real life data will help to us to further fine-tune some of the statistical algorithms and calibrations and extend the automated LCA approach from GHG to other environmental impacts such as e.g. water,” he remarked.
As organizations in the public, private, and governmental sectors seek to reduce their environmental impact, they rely on cost efficient and easy-to-use methods to make assessments. This new LCA is one such tool that can enable companies to better understand the environmental impacts associated with their products, processes, and activities. Ultimately, “the tool cannot make the decisions – as these remain multi-dimensional judgment calls where different, sometimes contradictory aspects and trade-offs have to be balanced,” admitted Meinrenken. “But companies prefer this over having to make these judgments calls without all information on the table.”
Interested in learning more? CERC offers a course in Environmental Sustainability and Corporate Decision-Making, part of the Earth Institute’s Executive Education Certificate in Conservation and Environmental Sustainability. This course addresses how innovative corporations are beginning to address environmental issues from a business perspective: minimizing associated costs and risks and capturing business opportunities to improve competitive advantage. It is taught by Jeff Potent, Environmental Protection Specialist, Office of Water, United States Environmental Protection Agency & Adjunct Professor, Columbia’s School of International and Public Affairs on Mondays, Nov. 12, 26, Dec. 3, 10, 17 (6:10 – 8:10PM). Contact Desmond Beirne, Program Coordinator, at firstname.lastname@example.org or 212-854-0149 for more information.