The 3 Interconnected Pillars of Sustainability are;

1. Planet;
2. Profit;
3. and People.

In the last blog post, we looked at the Planet Pillar.  Now let’s look at the  Profit Pillar of Sustainability.

Profit Has Been Crucial Throughout History

Our companies and families all revolve around a healthy economy.  Whether we conduct our trade in direct exchanges of goods and services, trading beads, IOU notes, or any of the world currencies, humans have engaged in the practice of commerce for at least as long as written history (including cave art) has existed.  We buy the things we need, and we sell the items we have.

Adding environmental concerns has not removed the need for a business to be profitable. Therefore, profit remains an essential component of an analysis of sustainability.  If a product we use requires a mineral or material that is scarce, the laws of supply and demand increase the price to buy it until it is no longer available and can’t be purchased at any cost.

Why Bankers and Investors Are So Concerned about Sustainability

Banks and investors care about risks in their portfolios of investments.  They are looking at the complete

• upstream supply chain for the product in which they are investing including complementary products that are used side-by-side with the product in question; and
• downstream consumer chain including the complementary products that are used side-by-side.

The trend from years ago, where banks and investors were only looking at the direct supply chain and the direct consumer, are changing.

Crucial questions now include:

• Are any raw materials from nature in short supply, meaning that the price for that raw material will rise sharply, affecting the price point for the product?
• Are there pending regulations on water utilization or air emissions that will change the operational costs of the company?

Sustainability issues represent risks to investors. Therefore, more and more annual company reports are now reporting on sustainability.

In conclusion, the Profit Pillar of Sustainability considers the viability for

• consumers to continue to purchase the product at a price they can afford; and
• suppliers to continue to make the product at a cost that provides a healthy profit.

Sustainability has three interconnected pillars, namely

1. Planet;
2. Profit; and
3. People.

But what does this mean, and how does one measure or address each of these pillars?  Let’s first look at the “Planet” pillar of sustainability. The other components will be addressed in upcoming blog posts.

A common way to classify the features of planet Earth is to include

• Land;
• Air; and
• Water.

Sustainability scientists use these same terms to measure the health of the Earth. Here are some measures we might consider for these terms.

• Land Health
  • terrestrial ecotoxicity;
  • terrestrial acidification; and
  • land occupation.
• Water Health
  • aquatic ecotoxicity;
  • aquatic acidification; and
  • aquatic eutrophication.
• Air Health
  • smog formation; or
  • particulate matter.

What Is Life Cycle Assessment (LCA)?

Life Cycle Assessment (LCA) is one of the tools we use to estimate impacts on our planet or the environment.  LCA considers the effects of a process or product from cradle to grave, meaning that we consider all stages of the product’s life from raw material extraction from the earth to disposal or recycling.

The LCA process is frequently used by designers to assess the potential impacts of their designs.  You might have seen a company advertise that their new packaging material design saves x billion kg of carbon dioxide equivalent from entering the atmosphere.  Or, perhaps a company will advertise that their new manufacturing process reduces sub 2.5-micron particulate matter by x tons per year.  These are examples of statements companies make to communicate that they’re thinking about the Planet Pillar of Sustainability.

4 Critical Steps for Conducting an LCA Study

Step 1: Define the Goal and Scope of the Study

This step might sound simple and unimportant, but it is the foundation of the whole study.  Ensuring that the study is well-defined allows us to draw comparisons between equivalent solutions.

Step 2: Prepare an Inventory

In the manufacturing world, we think of this as the Bill of Materials.  But in addition to just the Bill of Materials to manufacture the product, we include all

• Upstream Materials and Transportation for movement of the materials until we have the inventory in terms of raw materials from nature,  and
• Downstream Materials and Transportation
  • of the product to the customer;
  • materials required during use;
  • maintenance and repair; and
  • finally, disposal or recycling.

We again define this in terms of raw materials from nature.
Create an Inventory Flow Diagram to show flows from nature to nature, including

• water;
• energy;
• raw materials;
• releases to land;
• releases to air; and
• lastly, releases to water.

The inventory and associated flow diagram for even a simple product can be quite complex.

Step 3: Perform an Impact Assessment

Each inventory item is associated with a potential environmental impact.  Summing all the potential environmental impacts for each inventory item provide an estimated quantification of impact.  Various software packages can assist with this assessment of impact.

Step 4: Interpreting Results

The final step involves interpretation of the results, performing sensitivity analysis on the data, and making recommendations.

So hopefully, the next time you see a company advertise that their redesigned product uses x million liters less water per year or their redesigned manufacturing process releases x million tons less particulate matter per year, you’ll have an idea about the analysis that they went through to define that estimate for impact on our planet.

We hear so much about global warming. But what about other impacts on our earth?  Sometimes the metrics show that one solution to a problem may have less impact on global warming, but more impact on human health or smog formation.

There are several metrics available to you, i.e. your carbon footprint and water footprint. How have you considered these different metrics in your analyses? Do you know which metrics to include? Do you have a clear understanding of the questions your metrics are attempting to answer?

We can help you by looking at your unique business profile and help you determine the best metrics to communicate your sustainability initiatives and answer the important questions asked by your Continue reading →