What is a Life Cycle Assessment (LCA) and Why Does It Matter?

As sustainability becomes an increasingly important focus or requirement for businesses and consumers, understanding the full environmental impact of products and services is essential. This blog explores what an LCA is, why it matters to businesses, and its benefits to supporting a more sustainable future.

What is a Life Cycle Assessment (LCA)?

A Life Cycle Assessment simply put is used to evaluate the environmental impact of a product, service or process through its entire life cycle. This includes everything from extracting the raw materials to manufacturing, transportation, usage and disposal. LCAs provide a comprehensive understanding of where their environmental impacts are and how businesses can reduce them.

LCAs help answer important questions like:

• Where in my life cycle is the greatest environmental impact occurring?
• How can these impacts be reduced?
• Are there alternatives to current materials or processes used that could be less harmful?
  

LCAs are conducted according to internationally recognised standards 14040 and ISO 14044, ensuring that the measurement process is consistent and comparable across different industries.

By performing an LCA, organisations not only gain a clear understanding of their environmental footprint but also meet growing stakeholder demands for transparency and accountability.

What is ISO 14040 and ISO 14044?

ISO 14040 and ISO 14044 are internationally recognised standards that provide guidelines for conducting LCAs. They ensure consistency and reliability across assessments.

ISO 14040: Focuses on the principles and framework of LCAs, and details how assessments should be structured

ISO 14044: Offers practical requirements and guidelines for conducting LCAs, such as data collection methods and reporting

Both standards are key to ensuring that LCAs deliver actionable insights whilst maintaining transparency and credibility.

What’s the difference between a Product Carbon Footprint (PCF), a Corporate Carbon Footprint (CCF) and a Life Cycle Assessment (LCA)?

A PCF, CCF  and an LCA sound similar right? Whilst they are all used to measure environmental impact, they each focus on different aspects.

PCF

A PCF only looks at the greenhouse gas emissions for a product or a service, from production to disposal

CCF

A CCF measures the total greenhouse gas emissions of an entire company, including its operations, supply chain and employee activities.

LCA

An LCA assesses the entire environmental impact of a product or service and looks at additional factors such as water or social impact.

You can learn more about Product Carbon Footprint and Corporate Carbon Footprint in our blog.

Stages of the Product Life Cycle

To provide a full picture of a product’s environmental impact, LCAs assess these key stages:

1. Raw material extraction

This stage involves sourcing the materials needed to create a product. E.g. mining metals for electronics or farming crops for food products. Environmental impacts here may include deforestation, water consumption or energy use.

2.Design and production

At this stage, the raw materials are processed into finished products. This step often requires significant energy and water input and releases greenhouse gas emissions. For example, the energy required to refine aluminium or the emissions from operating machinery in factories.

3. Packaging and distribution

This stage includes the preparation of products for transportation and delivery to end users or retailers. Emissions come from the product of packaging (such as plastic or cardboard) and the fuel used in distribution.

4. Use and maintenance

This involves the consumption and upkeep of the product by the consumers. Emissions may include energy consumption e.g. electricity for appliances and resource use e.g. water for cleaning or maintenance. Over time, these emissions can accumulate significantly depending on the product’s lifespan.

5. End of life

This stage focuses on disposing of or recycling the product at its end of life. Common emission sources include methane from landfills, energy use during the recycling process and pollutants from incineration.

The Life Cycle Assessment Stages

Conducting an LCA involves four key stages, as defined by ISO 14040 and ISO 14044 standards:

1. Goal and Scope definition

This stage defines:

• The goal: Why the LCA is being conducted. Examples include regulatory compliance or product improvement.
• The scope: The boundaries of the study, such as cradle-to-grave (the entire life cycle of a product) or cradle-to-gate (up to the production stage)
• Functional unit: A measurable unit to quantify the product’s performance. For example ‘1 can of beer delivered to a customer”.
  

2. Life Cycle Inventory Analysis (LCI)

This phase involves collecting data on the following:

• Inputs: Materials, energy and water used during production.
• Outputs: Emissions to air, water, soil and any waste generated in the process. For example, measuring the by-products of producing wine.
  

3. Life Cycle Impact Assessment (LCIA)

In this stage, inventory data is translated into measurable environmental impacts such as:

• Global warming potential (GWP): The contribution to climate change in CO2 equivalents (CO2e)
• Ozone Depletion Potential (ODP): The effects of substances that degrade the ozone layer
• Acidification Potential: The emissions that contribute to acid rain
• Eutrophication potential: Pollution in water bodies that causes algae blooms which in turn reduces oxygen in the water and affects the ecosystem
• Human Toxicity Potential (HTP): The health risks from toxic substance exposure
• Water use impact: The effects of freshwater consumption on local ecosystems
• Land use impact: Environmental harm from land degradation and deforestation
• Resource depletion: The usage of non-renewable resources like fossil fuels
• Ecotoxicity: The damage caused by toxic substances to ecosystems
• Particulate matter formation: The respiratory and cardiovascular health issues that arise from air pollution
  

4. Interpretation

The results of the assessment are then analysed to:

• Identify environmental hotspots i.e. areas with the highest impact
• Propose recommendations for improvement
• Validate findings to ensure they align with the original goals.

Why Conduct an LCA?

Life Cycle Assessments are important for businesses aiming to make informed sustainability decisions. There are multiple benefits which include:

• Identifying environmental hotspots: Pinpoint where in the life cycle the greatest impacts occur, which can help with targeted reductions
• Regulatory compliance: It helps stay ahead of evolving regulations
• Informed decision-making: It can help identify areas for improvement, such as sourcing renewable materials or reducing emissions during the production stage
• Boost brand credibility: Demonstrating sustainability leadership enhances business reputation with both customers and stakeholders
• Support net-zero goals: LCAs provide the data needed to set realistic and science-based reduction targets
• Drive efficiency: By identifying areas where resources aren’t being used efficiently, LCAs can help to reduce costs and also improve operational performance

Challenges and Benefits of LCAs

Challenges

• Data intensity: Collecting accurate and granular data for all the life cycle stages can be time-consuming and resource-heavy, depending on your product/service
• Complexity: Managing all the variables and impact categories requires expertise support
• Cost: Conducting a valuable LCA can be expensive, especially for businesses on the smaller side
  

Benefits

Even though the challenges can seem overwhelming, here are some key benefits to LCAs:

• Supports decision making: LCAs support businesses in prioritising sustainability actions with the most impact, both in the design and use of the particular product or system being assessed in the LCA
• Customer trust: Transparent reporting can improve brand credibility and customer loyalty
• Understand your supply chain: Performing an LCA will provide a good handle on your company’s upstream and downstream supply chain, meaning you’ll have robust Scope 3 calculations
• Regulatory alignment: LCA can support compliance with sustainability standards, including upcoming regulations like the EU Carbon Border Adjustment Mechanism (CBAM) which we will discuss below

Alignment with upcoming regulatory requirements: CBAM and DPP

The EU Carbon Border Adjustment Mechanism (CBAM), which aims to levy carbon costs on imports from non-EU countries, currently only applies to a handful of sectors, including cement, electricity, fertilisers, iron and steel, aluminium, and hydrogen. The CBAM will be phased in starting from January 1, 2026, and does not yet apply across all industries.

Similarly, the EU Digital Product Passport (DPP), which will require companies to provide detailed information about the environmental impact of products, is expected to be gradually adopted between 2026-2030. Although it’s a few years away from full implementation, certain industries considered high impact, such as batteries, vehicles, construction and electronics, are being prioritised for earlier adoption. For now, while widespread adoption is still on the horizon, having an LCA in place will help businesses prepare for this future regulation.

‍Key takeaways

• LCA evaluates the environmental impact across the entire life cycle of a product or service
• It helps identify opportunities to reduce resources used and emissions emitted
• It enables informed decision-making for more sustainable product development