Introducing a product sustainability budget at an automotive company—one option to increase the use of LCSA results in decision-making processes

Abstract

Purpose:The assessment and improvement of sustainability impacts of products is integral to achieve sustainable development. A way to assess the impact of a product over its entire life cycle on all three dimensions of sustainability (environment, economy and society) is Life Cycle Sustainability Assessment (LCSA). LCSA suggests to carry out three complementary assessments: Life Cycle Assessment (LCA), Life Cycle Costing (LCC) and Social Life Cycle Assessment (S-LCA). While LCA is widely applied across various industries, the use of LCSA at industrial companies is still scarce. This is, inter alia, due to the challenges in data acquisition in S-LCA and missing support in decision making based on LCSA results as well as their implementation in the decision processes at companies. This thesis aims at remediating these shortcomings to achieve its overarching goal: Increasing the applicability of LCSA to identify and implement product sustainability improvement potential. For this, three research objectives were defined to address the main impediments. First, an approach to select social indicators and to focus primary data collection in S-LCA. Second, a method to interpret LCSA results for decision makers. Third, a mechanism to integrate LCSA based results into product-related decision making at an automotive company. Methods:To put the LCSA framework into practice at an automotive company, it was applied to the component level of a vehicle to assess the impact of every component over its life cycle. In the proposed framework, criticality scores for every LCSA dimension were defined. They were calculated based on the relative performance of a component in the respective LCSA dimension (LCA, LCC and S-LCA) to the rest of the components of the assessed vehicle. This conceptual approach formed the bearing for the integration of the individual research objectives. The three research objectives were addressed in individual publications. The results of these separate papers were combined to increase the applicability of the conceptual approach of the LCSA framework. Multi-Regional Input-Output (MRIO) databases were assessed regarding their possible use to address the first research objective.The findings were applied to enable an assessment of the S-LCA dimension in the LCSA framework.A study on the weighting of sustainability dimensions by decision makers in an automotive company was carried out to tackle the second research objective. The results were used to determine an overall LCSA impact result for every component of a vehicle. To address the third research objective, the customer added value of product sustainability features was investigated. The results were used to create a mechanism that enabled the integration of the assessment results of the LCSA framework alongside other indicators in product-related decision processes at an automotive company. Results:Supply chain analysis based on MRIO analysis did not offer substantial support for focusing primary data collection in S-LCA. Therefore, a material-based appr...

Review of Sustainability Assessment Approaches Based on Life Cycles

“…Tarne, et al [246] have introduced the concept of a "product sustainability budget" which can be used alongside the LCSA evaluation as a decision support tool. Using the example of an automotive manufacturer selling various models of car, they suggest that certain customers may be willing to pay a premium for a car with a 'sustainability interior package'.…”

“…Part of the profits from this sustainability interior package would be reinvested in a product sustainability budget out of which sustainability improvements across the range of vehicles would be financed. Since these improvements are already accounted for in this budget, their additional cost does not adversely affect the overall LCC performance [246]. Crucially, this "product sustainability budget" acts as an interface with the LCSA evaluation, helping managers to identify sustainability improvements from the LCSA, which lead to the largest improvement in sustainability performance without negatively impacting the LCC performance.…”

What's the catch? Trade-off challenges in early design for sustainability

“…There is often lack of data, uncertainty in what data to use, or low levels of data quality (de Oliveira et al, 2015; "We can never be really sure of the data" Interpretation and communication (5) Some properties or indicators may be hard to communicate (Bertoni et al, 2020) and might be unfamiliar to decision makers (Tarne et al, 2019).…”

Life Cycle Sustainability Assessment—A Survey Based Potential Future Development for Implementation and Interpretation

“…After the elimination of duplicates, 13 publications remained, which indicated single terms or combinations of the mentioned search terms in the title, abstract or in key words. After a detailed examination of the content, we found that a majority of the publications used their surveys to: obtain primary data especially for LCA [11][12][13], to understand and set up relevance and ranking of indicators, e.g., midpoint indicators in LCA [14][15][16], to explicitly implement a Social Life Cycle Assessment [11,17], or to make decisions in the automotive sector regarding sustainability assessment indicators [18,19].…”

“…Further focusing on correlations from educational background, working sector and age; the equivalent execution of the three pillars seems to be more challenging for the consulting sector and for younger (18-29 years) and older experts (>60) than for the average respondent; data availability is named by almost all experts as partly challenging, except for those working in industry (more challenging); in particular, data availability in S-LCA seems to be more challenging for industry and consulting than for university staff or employees of research institutes; defining equivalent system boundaries is more challenging for younger (18)(19)(20)(21)(22)(23)(24)(25)(26)(27)(28)(29) and older (>60) age groups; and in the interpretation and presentation of the results of LCSA, the consulting sector mentioned increased challenges.…”