Assessing Non-Environmental Aspects of Sustainability
Life Cycle Assessment and GHG accounting are proven approaches to environmental assessment. But in the pursuit of triple bottom line sustainability, there are two other pillars that need to be considered on our journey to sustainability—the social and economic aspects of our choices. In this article, we explore several assessment techniques that examine social and economic choices, at times in conjunction with environmental assessment. These assessments include SROI, TCA, S-ROI, and SLCA.
Social scientists have long used case studies to understand the impacts of choices. These studies are similar to risk assessments and environmental impact assessments because they are site-specific and delve into one or more specific aspects of a choice. Case studies can be informed by on the spot interviews, behavioral observation, or other techniques.
More recently, Social Return on Investment or SROI has been considered as a way to uncover broader implications of our choices. In SROI, the researchers try to determine which stakeholders are affected by the choices and whether the impacts are material to the stakeholder. In most cases, the impacts are assessed monetarily, and since the investor is also a stakeholder, this monetary assessment also covers the economic pillar of sustainability. Some SROI’s include future generations and so may include the environmental pillar as well. The assessment is accomplished through a workshop, survey, interviews or a combination. Literature research is used to ensure the results are robust. Some of the principles of SROI are Involve Stakeholders, Measure what Matters, and Be Transparent.
Total Cost Assessment (TCA) was developed to understand the economic impacts of corporate environmental and safety investments. TCA considers the impacts to a single stakeholder—the company or investor, yet because the impacts affect other stakeholders and those stakeholders may in turn affect the investor, the result is often a multi-stakeholder assessment.
If assessing prior to the choice or investment, there is a high level of uncertainty about the effects on stakeholders. TCA adds the element of uncertainty to the assessment; including the uncertainty enables inclusion of very low probability but very high cost risks in the assessment. TCA includes five cost types: direct, indirect, contingent liabilities, intangibles and externalities. The data for a TCA typically come from a workshop. Because the economic data may be highly confidential, workshop participants are typically internal to the company and results are kept internally. Life Cycle Assessment is often a key part of TCA, including a monetization of the impacts.
Sustainable Return on Investment (S-ROI), also called Triple Bottom Line Cost-Benefit Analysis, was developed out of TCA and incorporates many of the same principles as both TCA and SROI. Like TCA, S-ROI includes uncertainty. Like Social ROI, Sustainable ROI attempts to identify all affected stakeholders and to assess those materially affected. The assessment uses similar techniques to SROI, but adds the concept of risks and opportunities with less than 100% probability. Because S-ROI purposefully includes benefits as well as costs, it has been used to assess triple bottom line handprints, or the assessment of the good a product or company is doing across society, the environment, and the economy.
Social LCA or SLCA was developed to perform the same type of assessment as LCA for social impacts. Databases have been developed with social impacts by sector and country that can be used in LCA software tools. However, these databases are imprecise, so SLCA may also include surveys and literature research to capture site-specific or project-specific impacts. Like LCA, SLCA is identifying potential impacts, and a specific supply chain may not exhibit the impacts shown in the SLCA. SLCA is appropriate for identifying and mitigating potential hotspots.
Sustainable LCA or S-LCA combines the results of an LCA and Social LCA.
Life Cycle Costing analysis (LCC or LCCA) focuses on the economic pillar of sustainability. When focused on the user of a product or service, LCC is also called cost of ownership. Both LCC and cost of ownership were originally marketing tools, but have since been adopted by the sustainability community as a way to consider and market the economic effects of choices. It may or may not include uncertainty. Like SROI and S-ROI, LCC can focus on different stakeholders, although a single study typically focuses on either the end user or the product developer. In the former study, the functional unit and scope is often the same as you would find in an LCA. In the latter case, the life cycle would span research and production through to product obsolescence.
While known for insightful LCAs, EarthShift Global has experience with all of the environmental, social, and economic analyses discussed in this article. We can help determine which assessments are best for your sustainability planning. We work with social scientists as needed to ensure we are providing robust assessments that offer the same or greater level of insights to our traditional LCAs. If we can help you expand to all three pillars of your sustainability journey, please reach out.