PE S GABI EXEMPLIFIES HOW PRODUCT LCA CAN EMPOWER CSOs MARCH 2013 Verdantix Ltd 2007-2013. Reproduction Prohibited.
PE S GABI EXEMPLIFIES HOW PRODUCT LCA CAN EMPOWER CSOs March 2013 EXECUTIVE SUMMARY Corporate sustainability cannot rely for long on quick win projects such as energy efficiency, recycling or policy setting. Leading firms move beyond the enterprise view to take a product life cycle approach and the challenges that this presents are driving sustainability teams to work closely with non-sustainability colleagues. The decisions that determine product sustainability are made by R&D, product design, procurement, marketing and sales teams. This report helps Chief Sustainability Officers (CSOs), VPs of Environment and their colleagues to understand how product life cycle assessment (LCA) software can support different functions to incorporate sustainability considerations into their processes. The report looks specifically at PE International s GaBi solution, including the add-on GaBi DfX and Envision tools, because of the software s multiple usage scenarios. Customer usage examples demonstrate how LCA supports the embedding of sustainability as it informs decision-making at the product design and procurement stages, and provides a fact base to facilitate engaging sustainability communications by marketing and sales teams. TABLE OF CONTENTS FIGURES & REFERENCES Licensed Content PE INTERNATIONAL S GABI BRIDGES GAP BETWEEN COMPLEX AND SIMPLE LCA SOLUTIONS LCA SUPPORTS DIFFERENT BUSINESS FUNCTIONS TO ADDDRESS VALUE CHAIN SUSTAINABILITY Old And New Challenges Pit The Paths Of CSOs GaBi Helps Embed Sustainability By Bringing Benefits Of LCA To Broader Audience ORGANIZATIONS MENTIONED Apple, Bluehorse Associates, Daimler, Dell, Heinz, Interface, Kimberley-Clark, Kraft, Levi s, National Renewable Energy Laboratory, PE International, Puma, Swiss Centre for Life Cycle Inventories, TATA Steel, Volkswagen, Walmart, WSP Energy & Environment, Zumtobel Group 2013 Verdantix Ltd. All Rights Reserved. Verdantix, Green Quadrant, Total Portfolio and Critical Moments are trademarks of Verdantix Ltd. All other trademarks are the property of their respective companies. Verdantix clients may make one attributed copy of each figure or paragraph contained herein. Additional reproduction is strictly prohibited. Verdantix Ltd 2007-2013. Reproduction Prohibited. 2
PE INTERNATIONAL S GABI BRIDGES GAP BETWEEN COMPLEX AND SIMPLE LCA SOLUTIONS This report helps CSOs and VPs of Environment to understand how life cycle assessment (LCA) software can support them and their colleagues, in areas such as procurement, marketing and product teams, to benefit from improved product sustainability. Germanybased sustainability software and consultancy firm PE International (PE) launched the first version of its LCA software platform, GaBi, in 1991. Verdantix selected GaBi for analysis because of the software s multiple usage scenarios and position; it bridges simple and complex solutions. To find out more about GaBi and the business benefits of LCA software, Verdantix spoke with Peter Girard, Global Product Manager at PE International; Sebastian Gann, Environmental Program Manager at Zumtobel Group; and Stephan Krinke, VP Sustainable Products at Volkswagen. The GaBi LCA product suite includes: Detailed product life cycle assessment software. PE released the latest version of its LCA solution, GaBi 6.0, in December 2012. The core GaBi software models the life cycle environmental impacts of a product, from raw materials to usage and disposal. GaBi has evolved from academic solutions and is now primarily used by expert LCA practitioners, both in house or at licensed consulting firms. LCA solutions allow users to define the scope of the product system to model, and bring together databases of life cycle data, analysis engines and output interfaces whose results support multiple usage scenarios (see Verdantix Smart Innovators Product LCA Software). GaBi solutions vary widely in terms of cost and are priced depending on the number of licenses, the types of database included, add-on extension tools and type of license (either perpetual or subscription). Entry-level solutions start at 2,000 ($2,600), while enterprise-wide automated solutions for a range of user types can reach over 100,000 ($130,000). Decision-making and reporting tool. The main GaBi LCA solution is supported by GaBi Envision, a web-based tool that translates the complex data produced by LCA into outputs, such as simplified pdf reports, for non-lca experts. The tool informs decisionmaking using LCA data, for example during the product design process or at the procurement stage, and reports and communicates full life cycle impacts. PE International first launched GaBi Envision, previously GaBi Reader, as a web version in 2009. This coincided with a rise in the number of simplified LCA and footprinting tools on the market, such as Bluehorse Associates Carbonostics and WSP Energy & Environment s Product Ecology (see Verdantix WSP Democratizes Product LCA Software). When used together GaBi and GaBi Envision bridge the gap between complex and simple solutions as both can run the same LCA model. This reassures the CSO that all users in different functions are using the same data and assumptions, whether it is at a high or simple level of detail. Product portfolio integration tool. GaBi DfX is an additional tool that allows integration between GaBi and a firm s existing ERP (enterprise resource planning) or PLM (product life cycle management) software platforms. This allows automated LCA studies to be performed on entire product portfolios, using existing data on materials, quantities and supply chains. PE International first released GaBi DfX in 2002; users can complete a full LCA in ten minutes. This allows DfX users to create Environmental Verdantix Ltd 2007-2013. Reproduction Prohibited. 3
Product Declarations (EPDs) for a large number of products, to satisfy client requests or compliance requirements, and to understand the material impacts of product portfolios before establishing a sustainable product strategy. LCA databases including 10,000 product life cycle inventories. PE International s proprietary product life cycle inventory (LCI) databases support GaBi solutions. The firm offers over 5,000 LCI datasets, spanning industries including food and beverage, metals and mining, and textiles. GaBi users can also access the Swiss Centre for Life Cycle Inventories ecoinvent database, with over 4,000 LCI datasets, and the publicly available European Life Cycle and US LCI database, managed by the European Commission and National Renewable Energy Laboratory respectively, which include nearly 1,000 records. In addition, PE International offers a data on demand service, which allows customers to request new LCI datasets from PE, at additional cost. LCA SUPPORTS DIFFERENT BUSINESS FUNCTIONS TO ADDDRESS VALUE CHAIN SUSTAINABILITY PE International s GaBi solution has evolved from a traditional LCA solution to a full suite, combining detailed modelling with portfolio-level automation and a non-expert web-based platform. Firms such as PE International that position products and services to support corporate sustainability need to address both the challenges facing Heads of Sustainability, while at the same time, support them in their mission to influence the entire organization s sustainability improvements. Old And New Challenges Pit The Paths Of CSOs CSOs and their teams face a multiplicity of obstacles when seeking to embed sustainability at their organization. Exacerbating this, firms with leading sustainability strategies have shifted from a corporate enterprise perspective to address sustainability performance across the value chain, opening up an array of new and evolving challenges, including: Empowering other functions to implement projects effectively. Verdantix research shows that sustainability executives share responsibility for the implementation of most sustainability initiatives, and particularly those that involve value chain impacts (see Verdantix Global Sustainability Leaders Survey Budgets And Priorities). Heads of Sustainability continuously attempt to engage colleagues in other functions, such as marketing and procurement, and to embed sustainability considerations into their dayto-day jobs. Starting in 2013, Walmart will evaluate key global sourcing merchants on sustainability objectives as part of their annual performance reviews. Reducing product impacts through innovation and resource substitution. To address product impacts across the value chain, leading firms must look at the resources they use and examine how to innovate and substitute materials to create products with lower environmental impacts. Dell, for example, is piloting organic mushroom-based packaging, to replace petroleum-based polystyrene, in its packaging of laptops, desktops and other electronic equipment. Levi s announced a new line of Waste<Less denim products in October 2012, using an average of eight post-consumer recycled Verdantix Ltd 2007-2013. Reproduction Prohibited. 4
plastic bottles per pair of jeans. Levi s estimates that the entire collection will use 3.5 million plastic bottles. Optimizing performance in the supply chain. Supply chain impacts can account for very large proportions of a firm s value chain impacts. Apple estimates that 61% of its value chain impact is at the manufacturing stage, the vast majority of which the firm outsources to third party suppliers (see Verdantix Sustainable Supply Chain Benchmark: Consumer Electronics). To reduce this impact, sustainability executives must work with procurement and sourcing teams. Heinz, for example, aims to reduce the absolute agricultural water usage related to the tomatoes that it sources for its products by 15% by 2015, on a 2005 baseline (see Verdantix Sustainable Supply Chain Benchmark: Food Sector). Communicating performance credibly to a growing audience. Mandatory and voluntary initiatives encourage greater disclosure on sustainability. Audiences are increasing too, as firms look beyond producing a tick box style sustainability report to communicating sustainability in a more dynamic and engaging way. Leaders are responding to demands for information by eco-labelling products, such as EPDs, to inform B2B and B2C audiences, as well as incorporating sustainability into corporate communications and marketing. Verified product-level information on environmental impact is crucial to support this. In addition, regulations such as the French government s eco-labelling pilot continue to apply more compliance pressure on firms, particularly in consumer-facing industries, to measure and report product environmental performance (see Verdantix France Eco-Labelling Pilot Reveals Sector- Specific Benefits). GaBi Helps Embed Sustainability By Bringing Benefits Of LCA To Broader Audience Heads of Sustainability taking a lead on shifting their entire organization to a more sustainable position face an array of challenges, and they can t meet them alone. How do LCA solutions support actions to overcome these challenges? A review of GaBi by some of its 7,000 users at 1,500 global customers demonstrates how LCA enables: Product engineers and designers to create more sustainable products. Product designers at Kimberley-Clark use GaBi s Envision tool to understand the environmental impacts of potential product designs and redesigns. Kimberley-Clark didn t have to invest in significant training or hire new staff to use Envision as its Sustainability Director manages the process and administers product metrics and report formats for use by designers. Puma used the results of an LCA study to identify and communicate the environmental benefits of its Clever Little Bag redesigned shoebox, replacing cardboard with a reusable bag. According to the study, the switch saves 8,500 tons of paper and one million litres of water per year. Sustainable supply chain executives to engage suppliers. TATA Steel has used GaBi to identify hotspots in the steel value chain, so as to prioritize sustainability budgets on initiatives that will have the most benefit in the supply chain. Interface, the flooring Verdantix Ltd 2007-2013. Reproduction Prohibited. 5
firm, uses GaBi to engage suppliers to reduce the impact of the materials that Interface sources (see Verdantix Sustainability Shaping Markets: The Interface Experience). For example, Interface identified that yarn in its carpet tiles accounted for 45% of the life cycle global warming potential of its carpet tile products. Interface was able to work with suppliers to find a lower-impact alternative, and now procures recycled yarn. Interface passes resulting cost savings on to customers. Marketing and communications teams to sell product sustainability. Zumtobel Group, global lighting firm, has used PE s GaBi LCA software to respond to B2B customer demands for environmental product information. The firm uses GaBi DfX to automate the creation of LCA and subsequent EPDs, which can then be shared with clients directly and on Zumtobel Group s website. Volkswagen also uses GaBi to conduct detailed modelling and to provide B2B customers with whole life cost information relating to its vehicles, to inform customer purchase decisions. In the B2C market, Kraft has used GaBi to conduct LCA on packaging. Once designers had worked with LCA experts to create more sustainable packaging, the Kraft marketing team used the results to inform and validate communications around the firm s new salad dressing packaging, YES Pack (Yield, Ease, Sustainability). Kraft s packaging designers continue to leverage the initial project by using GaBi Envision and their packaging LCA model to test new designs and record product improvements. EH&S and compliance teams to ensure and report product compliance. Regulatory requirements in some countries and sectors mean firms must offer visibility on product impacts. The automotive industry in Europe, for example, is subject to the EU Directive 2005/64/EC on the recyclability of motor vehicles and firms need to be able to prove compliance. GaBi customers Daimler use GaBi DfX to ensure and monitor compliance and to quickly produce reports to support this. Firms using LCA software for compliances purposes are likely to import primary data from suppliers, a functionality that GaBi supports. Other examples of regulations that increase the demand for LCA include the EU s Directives for Eco-design of Energy-Related Products, Restriction of Hazardous Substances and Waste Electrical and Electronic Equipment and the forthcoming California Safer Consumer Products regulations. Verdantix Ltd 2007-2013. Reproduction Prohibited. 6
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