230
precursor or lead indicators, change that eventually affect (iii) the fi nancial value
drivers. For each of the rows of indicators a cause and effect relation can be
hypothesized. For illustrative purposes three of these are discussed below, with
examples including special reference to LCA applications. It shows pathways of
making the connection between greening actions and business fi nancial
performance.
2.1 Growth of Sales
Hypothesis for Sales Growth As market and regulatory demand for sustainability
grows, the business that (i) makes effective use of design for sustainability and
delivers greener products and services will be in a position to (ii) boost its innovation ability and attract more customers, which (iii) will show positive results in its
growth of sales.
This argument aligns with the proposition by management experts that sustainability has become the key driver of innovation, in new products and services as
well as business models (Nidumolu et al. 2009 ). Take-up of such products and services is boosted by, among others, more reliable information (e.g., labeling). Of
special signifi cance for LCA-based product innovation, and LCM more broadly, is
survey research by McKinsey with Boston College ( 2009 ) which cited innovation,
new products, new customers, and new markets as specifi c areas where sustainability factors have demonstrable impact on overall organizational growth. The challenge for the LCM community is to illustrate how LCA can be employed in a
convincing manner to deliver products with reliable certifi cations and product inforTable 16.1 The Green Business Case Model (columns 1–3), with additional references to LCM
linkages (column 4)
Environmental action areas
Connectors:
lead indicators
Financial value
drivers
LCM linkages
Eco-design (DfE)
Customer
attraction
Growth of sales
Product LCA
Goods and services
Brand value,
reputation
Duration of sales
Ongoing LCM
Standards (incl. life cycle) and
technologies
Innovation
Operating margin
LCC and CBA
Supply chain management
Operational
effi ciency
Investment in
fi xed capital
Maintenance,
Remanufacturing
Education, training
Human capital,
productivity
Investment in
working capital
Product service
systems
Risk management
Risk profi le
Cost of capital
Impact risks
Communications, reporting
(incl. stakeholder engagement)
License to
operate
Tax rate
LC-based
eco-taxes
C.T. Van Der Lugt
precursor or lead indicators, change that eventually affect (iii) the fi nancial value
drivers. For each of the rows of indicators a cause and effect relation can be
hypothesized. For illustrative purposes three of these are discussed below, with
examples including special reference to LCA applications. It shows pathways of
making the connection between greening actions and business fi nancial
performance.
2.1 Growth of Sales
Hypothesis for Sales Growth As market and regulatory demand for sustainability
grows, the business that (i) makes effective use of design for sustainability and
delivers greener products and services will be in a position to (ii) boost its innovation ability and attract more customers, which (iii) will show positive results in its
growth of sales.
This argument aligns with the proposition by management experts that sustainability has become the key driver of innovation, in new products and services as
well as business models (Nidumolu et al. 2009 ). Take-up of such products and services is boosted by, among others, more reliable information (e.g., labeling). Of
special signifi cance for LCA-based product innovation, and LCM more broadly, is
survey research by McKinsey with Boston College ( 2009 ) which cited innovation,
new products, new customers, and new markets as specifi c areas where sustainability factors have demonstrable impact on overall organizational growth. The challenge for the LCM community is to illustrate how LCA can be employed in a
convincing manner to deliver products with reliable certifi cations and product inforTable 16.1 The Green Business Case Model (columns 1–3), with additional references to LCM
linkages (column 4)
Environmental action areas
Connectors:
lead indicators
Financial value
drivers
LCM linkages
Eco-design (DfE)
Customer
attraction
Growth of sales
Product LCA
Goods and services
Brand value,
reputation
Duration of sales
Ongoing LCM
Standards (incl. life cycle) and
technologies
Innovation
Operating margin
LCC and CBA
Supply chain management
Operational
effi ciency
Investment in
fi xed capital
Maintenance,
Remanufacturing
Education, training
Human capital,
productivity
Investment in
working capital
Product service
systems
Risk management
Risk profi le
Cost of capital
Impact risks
Communications, reporting
(incl. stakeholder engagement)
License to
operate
Tax rate
LC-based
eco-taxes
C.T. Van Der Lugt