Session Title: Impact Valuation and Planetary Boundaries
Time: 4:45 – 5:15pm
Session Type: tba
Monetary values of the impact of emission and resources are useful to improve our understanding of sustainable development of production and consumption. One of the benefits of monetary valuation is its holistic approach. In current politics and company management there is a very strong focus on climate impacts. The current work looks into the use of monetary valuation of natural capital and its degradation as an approach to facilitate integration of environmental and to some extent social aspects in various decision contexts: Product development and Purchasing/Sourcing of raw materials in industry, Infrastructure/Railroad construction, Financial Accounting, among others. Results from the work will be presented and discussed, as to the methods importance and powers to guide these decisions in the right direction including and beyond climate impacts.
Steen B, Monetary Valuation of Environmental Impacts – Models and Data, CRC Press, Edition 1, 11 November 2019.
Steen B, Hallberg K, Hanarp P, Lindberg J, Riise E, Romare M, Rydberg T, Wikström A, Communicating monetary values of environmental impacts – Case studies related to ISO DIS 14008, Poster at SETAC Europe 28th Annual Meeting, Rome 13-16 May, 2018.
Impact Measurement and Valuation is an emergent approach to bring sustainability into the arena of strategic decision making. Impact valuation is a way for companies to gain a more comprehensive, concrete understanding of the value (or cost) of their impacts on society. Impact valuation is a tool companies can use to help identify, measure and value their impact on economic, social and environmental.
For a large logistics provider we have developed a prototype framework for Impact Measurement & Valuation (IM&V). The developed frameworks needed to enable the logistics provider to 1) report impact on the three pillars namely economic, social and environment, 2) monitor performance, 3)compare innovations and 4 )substantiate targets.
Two pilots for two of their main activities were conducted (reverse logistics and reduced packaging) to validate and test the framework. Within 10 weeks a strategic Framework for Impact Measurement and Valuation was compiled and used to assess the social, economic and environmental impact of these activities. One of the concrete outcomes was that the best performing options from an environmental point of view also had the highest margins, thus creating business value and reducing risk at the same time. Next to that, the top 10 clients were covering almost half of the total environmental impact of these activities. By focusing on process optimization together with their top clients, this logistics provider is set to make big improvements on lowering environmental impact with a profound business case.
The framework provided logistics provider with the metrics for daily decision making not only the environmental, but also the financial and social impact . On top the framework represents an excellent tool to increase efficiency in a strenuous project as the single source of truth for all teams within your company, providing them with the insights they need.
Wouter van Kootwijk
Since 1990 conventional life cycle assessment (LCA) has been developed to meet industry and consumer concern about reducing pollution and depleting resources. Consequentially life cycle impact assessment (LCIA) addresses system degeneration potential to the exclusion of reparation, regeneration and wellness. In theory, however, LCA has capacity to consider a total-picture of strengths, weaknesses, opportunities and threats for assessment of damage risk as well as benefit.
To enable recognition and quantification of benefits as well as damages, the Evah Institute has developed methods and metrics for conducting Life Cycle Benefit Assessment (LCBA), built upon ReCiPe, TRACI and EcoIndicator 99 LCIA philosophy, classification and methodology. In 2019 they commissioned the Dutch University of Leiden and Technical University of Delft: Master of Science Industrial Ecology students to consider LCBA. The research question was: How can environmental benefits be incorporated in LCA to enable transparent, holistic and inspiring communication of product system-related environmental performance?
The research used a mixed- methods combining literature reviews with expert interviews. A consistent definition of environmental benefits was proposed, after which the existing LCA-framework was evaluated and state-of-the-art varieties were assessed upon their benefit analysis. LCA applications were then assessed on potential to facilitate a paradigm shift to regenerative development.
In developing an LCBA framework while reducing greenwashing and unsustainability cover-ups, it was considered vital that negative impacts not be hidden behind positive benefits. To these ends four distinct end point outcome categories of benefit, net-benefit, damage and net-damage were defined.
Net-benefit is a total positive contribution towards a sustainable outcome from subtracting damages from benefit to yield a positive result. Net-damage is the total negative contribution towards an unsustainable outcome from subtracting damages from benefit to yield a negative result. Relative benefits also arise from reduced damage where a system performs better than alternatives.
This research argues for an “holistic approach” reflecting the carrying capacity of the earth rather than a “binary approach” with just unsustainable and sustainable outcomes. The holistic scale of delivering real benefits covers from unsustainable to sustainable and beyond to regenerative system outcomes. Initial potential benefit categories were described for replenishment of biodiversity; resources and stratospheric ozone; climate braking, purification, detoxification, de-eutrophication and deacidification.
Maarten J. Arentsen
The planetary boundaries framework delimits a safe operating space for humanity to operate within. In order to operationalize planetary boundaries in decision making using life cycle assessment, it needs to be downscaled at the product level. We put forward a conceptual framework to conduct such an assessment. The framework provides methodological steps to conduct an absolute environmental sustainability assessment of a product in context with planetary boundaries.
We use the distributive justice theory and provide two approaches to define the share of safe operating space for a product. First, per capita (use phase) approach – assigning a share of safe operating space between people. Second, product/sector – assigning a share of safe operating space between products irrespective of personal share. These approaches provide four sharing principles that were tested using a hypothetical case study of poultry in the Netherlands. The environmental impact of poultry was calculated using the PBLCA method. The result of LCA was then analyzed with the assigned share of the poultry to evaluate the performance in absolute terms. Based on the results using distributive justice theory, we provide that “prioritarianism” is the most compelling theory to assign a share of safe operating space of a product and navigate sustainability in the Anthropocene. We also discuss constraints associated with the PBLCA method and reflect on the conceptual framework and methodological steps to be used by LCA practitioners, companies, and policymakers to conduct such an assessment.