231
mation. It may, for example, be asked whether the price of the product includes
costs associated with the use and the end-of-life phases of the product. In as far as
the greener product may be more expensive, consumers need education and guidance
to realize that over the full life cycle the product is in fact cheaper. To start with, the
LCA opportunity starts at the design phase. Eco-design has often been cited as one
of the obvious applications of life cycle thinking, integrating business economics
and the environmental sciences. Consider, for example, that most of the resource
requirements and environmental impacts of products are predetermined during their
design stage.
The need for reliable labels and certifi cations applies not only to manufactured
products. Consider agrifood products and increasing consumer concern about where
(local versus imported) and under what conditions (organic or sustainable) they
have been produced. The retailer sector provides growing evidence of the use of
green labels and the ability of major corporations to report impressive growth in the
sales of such products. Whole Foods Market ( 2011 ), a Fortune 500 company and
largest retailer of natural and organic foods in the USA, has seen its sales grow from
$92.5 million in 1991 to $10.11 billion in 2011, at a compounded annual growth
rate of 26 %.
Topical examples of product innovation and LCC can be found from companies
such as Procter & Gamble (P&G), General Electric (GE), Puma, and Baxter.
Mindful that consumers’ product use causes the highest level of water consumption
related to a detergent product’s life cycle, P & G in 2007 switched all of its liquid
detergents to a compact formula. By fall 2008, its Fabric Care and Home Care segment had seen a 10 % increase in net sales growth (CERES and Pacifi c Institute
2009 ). Launched in 2005 as an explicitly cleantech labeled product range, the
Ecomagination products of GE reached sales of US$18 billion in 2009 – the size of
a Fortune 150 company. GE has since predicted that revenues of Ecomagination
products will grow at twice the rate of total company revenues over the coming 5
years (Porter and Kramer 2011 ). By 2015 the company reported sales revenue of
Ecomagination products since 2005 was US$160 billion.
In 2010, the sporting goods company PUMA published an environmental profi t
and loss (EP&L) account, providing a monetary value on life cycle environmental
impacts along its entire supply chain. The methodology in doing this involved a
hybrid I-O process LCA. It enabled the company assess its overall environmental
impacts valued at EUR 145 million in 2010 and defi ne its most signifi cant environmental impacts, where these impacts mainly occur (tiers 3 and 4 of the supply
chain), in which regions most of the impact occur (Asia Pacifi c) and how they are
spread in its product portfolio (e.g., mainly related to footwear). Today its annual
report includes a Sustainability Scorecard that gives performance data by product,
factories and company. From 2010 to 2012 its global brand sales grew from EUR
2.86 billion to EUR 3.45 billion (PUMA 2012 ).
The EP&L published by Puma can be compared with the Environmental
Financial Statement published by healthcare company Baxter in its annual environmental reports since the mid-1990s. The statement by Baxter lists annual environ16 Taking Life Cycle Management Mainstream: Integration in Corporate Finance…
mation. It may, for example, be asked whether the price of the product includes
costs associated with the use and the end-of-life phases of the product. In as far as
the greener product may be more expensive, consumers need education and guidance
to realize that over the full life cycle the product is in fact cheaper. To start with, the
LCA opportunity starts at the design phase. Eco-design has often been cited as one
of the obvious applications of life cycle thinking, integrating business economics
and the environmental sciences. Consider, for example, that most of the resource
requirements and environmental impacts of products are predetermined during their
design stage.
The need for reliable labels and certifi cations applies not only to manufactured
products. Consider agrifood products and increasing consumer concern about where
(local versus imported) and under what conditions (organic or sustainable) they
have been produced. The retailer sector provides growing evidence of the use of
green labels and the ability of major corporations to report impressive growth in the
sales of such products. Whole Foods Market ( 2011 ), a Fortune 500 company and
largest retailer of natural and organic foods in the USA, has seen its sales grow from
$92.5 million in 1991 to $10.11 billion in 2011, at a compounded annual growth
rate of 26 %.
Topical examples of product innovation and LCC can be found from companies
such as Procter & Gamble (P&G), General Electric (GE), Puma, and Baxter.
Mindful that consumers’ product use causes the highest level of water consumption
related to a detergent product’s life cycle, P & G in 2007 switched all of its liquid
detergents to a compact formula. By fall 2008, its Fabric Care and Home Care segment had seen a 10 % increase in net sales growth (CERES and Pacifi c Institute
2009 ). Launched in 2005 as an explicitly cleantech labeled product range, the
Ecomagination products of GE reached sales of US$18 billion in 2009 – the size of
a Fortune 150 company. GE has since predicted that revenues of Ecomagination
products will grow at twice the rate of total company revenues over the coming 5
years (Porter and Kramer 2011 ). By 2015 the company reported sales revenue of
Ecomagination products since 2005 was US$160 billion.
In 2010, the sporting goods company PUMA published an environmental profi t
and loss (EP&L) account, providing a monetary value on life cycle environmental
impacts along its entire supply chain. The methodology in doing this involved a
hybrid I-O process LCA. It enabled the company assess its overall environmental
impacts valued at EUR 145 million in 2010 and defi ne its most signifi cant environmental impacts, where these impacts mainly occur (tiers 3 and 4 of the supply
chain), in which regions most of the impact occur (Asia Pacifi c) and how they are
spread in its product portfolio (e.g., mainly related to footwear). Today its annual
report includes a Sustainability Scorecard that gives performance data by product,
factories and company. From 2010 to 2012 its global brand sales grew from EUR
2.86 billion to EUR 3.45 billion (PUMA 2012 ).
The EP&L published by Puma can be compared with the Environmental
Financial Statement published by healthcare company Baxter in its annual environmental reports since the mid-1990s. The statement by Baxter lists annual environ16 Taking Life Cycle Management Mainstream: Integration in Corporate Finance…