Organizations with strong social values are increasingly sought after by investors, customers, and employees. As awareness and expectations of social value (the “S” in ESG) increase, organizations are becoming more and more It is becoming increasingly important for companies to take an active role in managing their corporate responsibilities. and ethical solutions.
Ricardo’s world-renowned Life Cycle Assessment (LCA) team helps organizations deeply understand and act on the environmental impact of their products and services. They recognize and encourage the growing prevalence of social impact assessment. We asked his LCA team to explain why organizations need to embrace this rising trend, and why acting now can build resilience and reap future benefits. Ta.
What is LCA, Social Life Cycle Assessment (SLCA)?
LCA is a method of assessing the environmental impact of a product (or service) over its lifetime. The results are categorized into different product lifecycle stages, from raw material extraction to manufacturing, transportation, use, and end-of-life disposal.
In recent years, this same lifecycle thinking approach has been expanded to include the social impact of a product, service, site, or organization. This method is known as Social Life Cycle Assessment (SLCA).
SLCA helps organizations measure and manage social risks within their supply chains. This will enable the assessment and identification of social issues, allowing them to be prioritized, mitigated, targeted and reported for future legislation, in line with international best practices.
The social topics covered in the SLCA vary depending on the choice of methodology and supply chain risks, but common social topics that impact workers, users, communities, society, and other stakeholder groups include: It is as follows:
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What are the legal requirements for social LCA?
Social impacts resulting from business activities are increasingly covered by legal requirements, particularly in Europe where the European Commission is working on the new Corporate Sustainability Due Diligence Directive (CSDDD). The Directive requires large companies operating within the EU to carry out due diligence on their own and their suppliers’ activities to identify, reduce and avoid actual or potential negative impacts from their business operations.
Violations will result in fines, but more importantly, the law builds on the precedent already set that supply chain victims can sue organizations for damages. It will be established based on. The CSDDD applies not only to EU companies within its scope, but also to non-EU companies, so customer requests for social and environmental information and data are not limited to large organizations in the EU.
Beyond legal requirements, many organizations and government agencies are also beginning to consider social issues in their bidding decisions. For example, the UK government currently requires 10% of bid scores to be based on social value criteria.
It is clear that political and investment pressure on social issues is increasing, and there are several requirements to ensure that social issues are properly assessed, managed, mitigated and reported. In Ricardo’s expert opinion, the best way to do this is to use his SLCA. By starting this process now, you can maximize the opportunities offered by the SLCA and minimize risk by ensuring you have a foundation for when the legal requirements come into force. Masu.
What are the benefits of conducting SLCA?
SLCA benefits your organization by helping you:
- Identify supply chain and reputational risks and mitigate them early.
- Anticipate and prepare for future legislation.
- Meet consumer and customer expectations.
- Identify opportunities for new or improved products and solutions.
- Understand gaps and opportunities for improvement.
- Enhance your reputation and improve dialogue with stakeholders.
- Improve the lives of people within your organization’s broader network.
SLCA allows you to fully assess impacts across the value chain, beyond your employees and local communities.
SLCA is an important tool for developing strong social value credentials that positively impact critical business issues such as workforce attraction and retention, corporate reputation, customer choice, and investor support. It’s a tool.
How does Ricardo support clients with SLCA?
Social values are a complex topic with many aspects to consider. This is why our Ricardo Social LCA experts work with organizations of all sizes and experience levels, from those looking for help in starting their social impact assessment to those already taking action and considering building. That’s why we created a step-by-step roadmap for your organization. Continue and improve existing work.
Ricardo offers a wide range of services based on the United Nations Environment Program (UNEP) and the SLCA methodology for product social impact assessment, including:
Social Hotspot Survey Our recommended starting points include a high-level, global database-based survey based on sector and country-specific data to provide an early indication of social issues within the supply chain that are likely to be a risk. Includes research.
Data collection and data prioritization strategy The results of the hotspot survey will result in a data prioritization strategy that outlines what kind of social data needs to be collected on each issue, and practices on how to implement this. used to develop recommendations.
Social LCA/FootprintFor organizations that already have great primary social data on their supply chain, Ricardo works to assess impact beyond the supply chain. The best way to assess these effects is using SLCA.
social hand print
After an organization conducts a SLCA and takes action to address the impacts highlighted, a social bill survey measures positive changes from the SLCA baseline as a result of the intervention. This survey measures your progress toward your goals and provides material to improve your reputation.
Ricardo’s support is tailored to the needs and circumstances of each organization we work with, combining our deep knowledge and experience working in many sectors including automotive, chemicals, manufacturing, food and beverage. I am.
Can social LCA and environmental LCA be combined?
Yes, integrating social and environmental LCA allows you to fully understand the environmental and social impact of your products/services. This approach allows us to develop more socio-ethical and sustainable products and services that withstand scrutiny and meet or exceed customer expectations. Communication that highlights the positives and shows how you are addressing or overcoming negative impacts is a powerful tool for improving your reputation with investors, customers, and employees.
Combining environmental and social assessments can also advance existing efforts such as sustainable portfolio assessments and UN Sustainable Development Goals (SDG) reporting.
Ricardo has recently been supporting organizations in the early stages of their social journeys. Our experts have worked to assess the potential social impacts associated with the upstream supply chain of the company’s tropical wood products. This Social Hotspot study is conducted in conjunction with an Environmental Product Declaration (EPD), which is verified by a third party, to provide a comprehensive overview of both the environmental and social impact of a product. (Click here for more information about EPD). .
This research enables clients to understand the social issues that may impact their supply chains and begin implementing mitigation measures to address, reduce and prevent them. Ricardo works with clients to understand stakeholder priorities and develop prioritization strategies to collect key social data on the highest-risk societal issues.
Clients also gain insight into where different environmental impacts occur in a product’s lifecycle and can target reduction measures accordingly. A validated EPD provides an independent and robust overview of a client’s environmental credentials and can be used to feed into broader assessment schemes such as BREEAM.
“Our business is investing in a combination of social hotspots and EPD assessments to gain a clearer picture of the social impact of our product supply chain and the environmental impact of our products. Our Business It is important for us to be open and transparent with our customers about the environmental and social impact of our products, and third-party evaluation by Ricardo allows us to do that.” – Testimonials
What’s next for SLCA?
Much work has been done in recent years to simplify the “UNEP” and “Product Social Impact Assessment” SLCA methodologies and make them more robust in line with generally accepted social science approaches. However, there is still work to be done regarding the standardization and agreement of social impact categories between different methodologies. Ricardo’s experts help companies navigate these difficult technical aspects and determine the best methodology and methodological options for each situation in line with best his practices.
Social LCA is attracting increasing attention as a method for assessing social impact. Work is underway to standardize social LCA techniques globally and develop best practice approaches. The International Organization for Standardization is currently developing the Social Life Cycle Assessment Standard (ISO 14075) to help standardize approaches and best practices.
SLCA has much to offer organizations as a methodology to help them assess and manage social issues in their value chains. We strongly recommend that you start prioritizing social values sooner rather than later to maximize the opportunities they offer, minimize risks, and prepare for what will become a legal requirement.
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As a world leader in LCA, we can help you navigate the difficult technical and methodological options involved in SLCA and environmental LCA, and leverage the skills and knowledge of other Ricardo expert teams in areas such as: Together, we can offer a broader, more comprehensive support package. Carbon management, circular economy, sustainable procurement, ESG reporting, energy management, etc.