Life cycle assessment (LCA) is a standardised methodology for the quantification of the potential environmental impacts of processes and systems. The data provided can be used

effectively to assist in decision making situations. This paper gives examples on how the results from LCA studies and the process of conducting the study can assist in decision making processes. Emphasis is on explaining and guidance on interpretation of the information delivered by an LCA as an essential part of achieving broader goals such as sustainability rather than the simple comparison of products.
The role of environmental labels and rating tools in decision making processes from the perspective of LCA is discussed and examples from companies who have already successfully
implemented LCA in their organisations are provided.
The paper concludes with recommendations about using LCA more effectively in decision making processes in the built environment in New Zealand.

TE201/3

Final
A report prepared for Beacon Pathway Limited
October 2007

About This Report

Title

The Role of LCA in Decision Making in the Context of Sustainable Development

Authors

Nebel, Barbara, Scion; Warnes, Jeremy, Scion (team leader)

Reviewer

Gifford, John, Scion

Note

This report was written as part of the research Beacon Pathway Limited (Beacon) commissioned under the banner of “LCA education”. The project had two main components. The first was to conduct workshops that would introduce the concept of LCA, demonstrate its application in the built environment and highlight specific issues related to LCA and the building industry. The second component involved the production of two reports, the first to describe LCA methodology to help stakeholders interpret LCA studies and the second to document the role of LCA in decision making.
To reach our goal of a high standard of sustainability with respect to materials, Beacon (and ultimately the building industry and the regulators) needs to understand the impact of materials used in homes from cradle to grave.
This report should be considered within the series of reports written for Beacon on materials, in particular the following resources:

  • White paper – LCA and the Building/Construction Industry
  • Analysis of current profiles of building products.
  • The workshop presentations given as part of this LCA education stream of work.

Reference

Nebel, B. October 2007. The Role of LCA in Decision Making in the Context of Sustainable Development.Report TE201/3 for Beacon Pathway Limited.

Rights

Beacon Pathway Limited reserves all rights in the Report. The Report is entitled to the full protection given by the New Zealand Copyright Act 1994 to Beacon Pathway Limited.

Disclaimer

The opinions provided in the Report have been provided in good faith and on the basis that every endeavour has been made to be accurate and not misleading and to exercise reasonable care, skill and judgment in providing such opinions. Neither Beacon Pathway Limited nor any of its employees, subcontractors, agents or other persons acting on its behalf or under its control accept any responsibility or liability in respect of any opinion provided in this Report.

Contents

1. Executive Summary…………………………………………………………………………………………………. 5
2 Introduction……………………………………………………………………………………………………………. 6
3 Definitions ……………………………………………………………………………………………………………… 7
4 LCA Methodology…………………………………………………………………………………………………… 7
4.1 Decision Making Process (DMP) ………………………………………………………………………. 9
5 The Application of LCA in Decision Making ……………………………………………………………. 11
5.1 Introduction…………………………………………………………………………………………………… 11
5.2 Strategic Decision Making………………………………………………………………………………. 11
5.3 Operational Decision Making………………………………………………………………………….. 17
6 Existing Tools……………………………………………………………………………………………………….. 20
6.1 Environmental labels ……………………………………………………………………………………… 20
6.2 Rating tools…………………………………………………………………………………………………… 23
7 Case studies of companies or organisations which have embedded LCA into their business
systems………………………………………………………………………………………………………………… 24
7.1 Formway………………………………………………………………………………………………………. 24
7.2 BlueScope Steel …………………………………………………………………………………………….. 25
8 Conclusions ………………………………………………………………………………………………………….. 25
9 References……………………………………………………………………………………………………………. 27
10 Appendix One: Environmental Product Declaration …………………………………………………… 29

1. Executive Summary

Life cycle assessment (LCA) is a standardised methodology for the quantification of the potential environmental impacts of processes and systems. The data provided can be used
effectively to assist in decision making situations. The following attributes of LCA contribute to its overall usefulness in the decision making process:

  • LCA takes a holistic approach to identifying and quantifying environmental impacts;
  • LCA is data driven;
  • LCA is replicable where it is based on standard methodologies (i.e. ISO 14040 and 14044);
  • A range of tools already exist to effectively collate, manage and report data;
  • LCA provides a robust methodological framework for quantifying environmental and Economic factors, and over time is also likely to include social and cultural issues.

Decision making situations can be categories in both operational and strategic decisions. The choice between two building products would be an operational decision and the choice to implement sustainability in a manufacturing process would be a strategic decision. The use of LCA in these situations is demonstrated in the examples of a wall system for an operational decision, and the production of brick for a strategic decision.
The paper also discusses tools such as environmental labels and rating tools which are frequently used for decision making processes. LCA is increasingly implemented in these
tools, but often they are not based on data. Environmental product declarations are one way of communicating LCA data for the use of decision makers.
Companies such as Formway Furniture and BlueScope Steel have already successfully implemented LCA in their organisations. How these companies use LCA, and how they
benefit from using this holistic approach in their pathway towards sustainability, is briefly described.
The paper concludes with recommendations about using LCA more effectively in the built environment in New Zealand:

  • Life cycle assessment approaches should be implemented in the development of new building materials as well as building components.
  • The use of LCA should be demonstrated in operational as well as strategic decision making by looking back at the construction process of the two NOW Homes®.
  • There should be increased use of LCA data in the development of product specifications for eco-labels and to promote the uptake of environmental product declarations as a tool for the communication of environmental information.
  • LCA approaches should be fostered in the building industry in New Zealand, as they have been used successfully in previous New Zealand-based examples.

2 Introduction

The development of more sustainable products and processes requires comprehensive and reliable decision support systems which are based on data. Life cycle assessment (LCA) is an established methodology for quantifying potential environmental impacts and can feed into decision support systems for improved environmental choices by manufacturers, policy
makers and consumers.
Previous reports (White Paper (Nebel 2006), Methodology Paper (TE201A, Nebel 2006a)) have focused on the process of LCA, explained the methodology, and highlighted the use of
LCA as a framework to support the implementation of a “sustainable development” strategy for the building industry in New Zealand. LCA is a particularly useful tool for this latter point
as it can contribute to:

  • a greater understanding of product life cycles and interrelationships between users and stakeholders.
  • the building industry in New Zealand becoming a leader in the systems approach to sustainable development and gaining recognition for its contribution to the development of robust procurement systems, rating tools and environmental labels.
  • the development of processes that encourage a high level of transparency and which ensure that both internal and external stakeholders receive regular and appropriate information on improvements through benchmarking and ‘hot spot analysis’, as well as effectively explaining decisions and implications.
  • the application of a ‘sustainable design’ process, on a company level, that allows effective lock-in of ‘environmental gain’ and for individual companies’ members to position themselves ahead of other companies and their products in terms of product stewardship and extended producer responsibility.

This report focuses on using LCA results and outcomes to improve overall sustainability for the built environment, i.e. for making decisions that impact on sustainability. The focus is on
use in improving supply chains as well as on the comparison of building products. Other applications for LCA include decision aiding systems such as environmental labels, databases
and rating tools. These are also briefly discussed in this report. The respective applications and limitations in the decision making process are described for each system.
Quantifying the potential environmental impacts helps to improve the production processes of certain products by analysing each production step with LCA and comparing the results one below the other. The result of this so called product- and company-specific life cycle analysis is to find out where improvement measures could be started and where the biggest
improvements can be obtained.

This report intends to assist organisations to use Life Cycle Assessment both to improve their products internally and to place their products in the right context for comparing them with
other products or product systems.

3 Definitions

This study focuses on the use of LCA in decision making in the context of the built environment. In order to ensure a common understanding of the terms building material,
building product, building component, LCA and the decision making process, these terms are briefly defined in this chapter.
Building material:
A material that does not fulfil a specific function, but will be used in different applications. For example, steel can be used as a connector for timber frames or for steel framing.
Building product:
Products are based on one or more materials and have a specific function. For example, timber can be a stud or a weatherboard. The term building product does not necessarily refer
to a specific brand of a product, e.g. the building product would be plasterboard and not Gib® board.
Building component:
Building components consist of different building products. A wall would include framing, insulation, external cladding and internal lining.

4 LCA Methodology

Life cycle assessment (LCA) is a standardised methodology for the examination of processes and systems from an environmental point of view that can assist the process of good decision making in many ways.
The key attributes of LCA that contribute to its overall usefulness in the decision making process are shown below.

  • LCA takes an holistic approach to identifying and quantifying environmental impacts;
  • LCA is data driven;
  • LCA is replicable where it is based on standard methodologies (i.e. ISO 14040 and 14044);
  • A range of tools already exist to effectively collate, manage and report data;
  • LCA provides a robust methodological framework for quantifying environmental and economic factors, and over time is also likely to include social and cultural issues.

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