Click here to view Life Cycle Assessment
While a life cycle assessment (LCA) is a powerful tool for measuring environmental sustainability, businesses must consider a broader range of factors to drive strategic decision-making and success.
Before we explore how to effectively integrate an LCA into decision-making, check out the series so far: LCA and its role in sustainability, You can’t manage what you can’t measure: Leveraging LCAs, and LCA: From micro to macro.
Beyond LCA
There are many factors (criteria) beyond environmental impacts that play pivotal roles in decision-making, including product quality, net revenue, product safety, and more.
The challenge facing organizations is integrating LCA effectively into planning while considering these diverse aspects. Also, neglecting these in favor of a singular focus on environmental factors could lead to suboptimal outcomes or missed opportunities.
Multi-criteria decision analysis (MCDA)
Multi-criteria decision analysis (MCDA) frameworks offer a structured methodology to incorporate diverse criteria into decision-making processes effectively. MCDA allows decision makers to assign weights to different criteria based on relative importance to the business and evaluate alternatives comprehensively.
Including LCA into Multi-Criteria Decision Making
Imagine a company is launching a new product, and they need to choose between two different packaging materials, Material A and Material B. They want to make the best decision possible, so they consider three important factors: environmental impact (LCA score), production cost, and product durability.
To evaluate these materials, they use a rating system from 1 to 10, where 1 is the lowest score, and 10 is the highest score.
Click here to view the ratings for each material.
Now, some factors may be more important than others for the business. In this case, it’s decided that environmental impact is the most important, so that’s given a weight of 40 percent. Production cost and product durability are equally important, so they each get a weight of 30 percent.
To calculate an overall score for each material, they multiply the rating by the weight for each factor, and then add them up:
- Material A overall score: 2.8 + 2.4 + 2.1 = 7.3
- Material B overall Score: 2.4 + 2.7 + 1.8 = 6.9
Click here to view the table.
So, even though Material B has a better production cost rating, Material A has a higher overall score (7.3 vs. 6.9) because it performs better on the more important environmental impact factor and the equally important product durability factor.
Note: This example is intended to illustrate the general approach of Multi-Criteria Decision Analysis (MCDA) incorporating Life Cycle Assessment (LCA) scores alongside other decision criteria. There are various methodologies and setups for integrating LCA into decision making, and the specific weights and scales used here are for demonstrative purposes only.
As organizations face challenges and changing stakeholder demands, systematic MCDA methodologies will be indispensable for leveraging LCA insights effectively alongside other strategic imperatives. The most sustainable companies will be those that optimize across environmental, economic, and social dimensions through decision-making frameworks like MCDA.
Watch for more in Ramin Ghamkhar, Ph.D. upcoming series on LCAs in supporting global sustainability initiatives. Visit BSI’s Experts Corner for more insights from industry experts.
