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On-Demand Masterclass: Solving Sustainability Data Challenges

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In a rapidly evolving business landscape, managing sustainability data has become a critical challenge for industries worldwide. During our recent masterclass, Solving Sustainability Data Challenges, Makersite’s data experts Sophie Kieselbach and Niclas Rabel explored the hurdles organizations face in aligning their sustainability efforts with robust data practices.

From understanding different maturity levels across industries to tackling common data management obstacles, this session provided actionable insights to help businesses enhance their sustainability journeys. Below are 10 key takeaways from the masterclass that can guide companies in improving their sustainability data practices and integrating them into long-term strategies. 

10 Key Takeaways 

Sustainability Maturity Levels Across Industries 

By using data gathered through our Maturity Index submissions the data experts analysed and presented how various industries are at different stages in their sustainability journeys. They were categorized into three maturity levels:  

  • Novice (76.06%): This group comprised industries like automotive (19.72%) and consumer durable goods (23.94%) that are just beginning to integrate sustainability efforts. They are largely unaware of their entire value chain and tend to have limited visibility into sustainability data beyond Tier 1 suppliers.  
  • Intermediate (19.72%): These industries have started to address sustainability but are still in transition. Automotive and building materials make up a portion of this group, where data integration is underway, but decision-making is hindered by inconsistent and siloed data.  
  • Advanced (4.23%): These are the most mature companies in terms of sustainability data, often found in consumer packaged goods. They have harmonized data and an end-to-end view of their supply chain, allowing them to make informed decisions and leverage sustainability as a profit driver.  

These maturity levels indicate that most companies are still in the early phases, struggling with integrating sustainability into core business processes.

To find out where you sit on the maturity ladder and how you compare to companies similar to yours fill out our Maturity Index.

  

Data Challenges  

These are some of the most common challenges businesses face when managing sustainability data:  

  • Internal Awareness Gaps: Many companies are partially aware of their internal data but lack insight into the entire value chain. This creates blind spots beyond Tier 1 suppliers and disrupts accurate decision-making.  
  • Supply Chain Visibility: Limited data visibility can lead to delayed decisions, supply chain disruptions, and missed regulatory requirements.  
  • Data Silos: Inconsistent and siloed data across departments (product development, procurement, etc.) makes it harder to drive sustainability initiatives. The inability to share and integrate data from different sources prevents a holistic view of sustainability impacts.  

The goal here is to shift from fragmented, inconsistent data management to a fully integrated, transparent data landscape that supports sustainability efforts across the entire supply chain.  

   

Sourcing Challenges  

Sourcing data for sustainability presents several key issues:  

  • Data Accessibility: Difficulty in accessing data due to proprietary restrictions and varying data quality standards from suppliers.  
  • Missing Descriptions: Purchased parts often lack proper descriptions, leading to inefficiencies in understanding their sustainability impacts.  
  • Integration Complexity: The complexity of integrating internal databases with third-party providers and IoT devices can lead to fragmented data management systems.  
  • Inaccuracy and Inconsistency: Manual data entry errors, outdated information, and inconsistent data formats further exacerbate the problem. Companies often find that the same data point varies across different systems, making it difficult to trust the data.  

Addressing these sourcing challenges requires robust data integration tools and governance frameworks that standardize the collection and storage of data.  

   

Real-World Scenario

We discussed a real-world scenario where a company we worked with faced the common challenge of inconsistent and missing data, which led to inefficiencies in their product design and cost analysis. The solution involved:  

  • Data Governance Framework: Implementing a data governance framework to harmonize data from various ERP (Enterprise Resource Planning) and PLM (Product Lifecycle Management) systems.  
  • Enhanced Data Quality: Improving data quality through integration tools helped the company make better decisions, reduce costs, and design more sustainable products.  

The use case emphasizes the importance of unified data governance to overcome fragmented data systems, highlighting the role of tools like Makersite in ensuring smooth integration and accuracy of data. 

For a deeper dive into our success stories click here.

   

Data Management  

Systematic data management is a vital ingredient for a successful business, it includes organizing, storing, and maintaining data. Three core benefits are:  

  • Driving Business Decisions: High-quality data enables businesses to make informed and timely decisions, especially regarding sustainability.  
  • Enhancing Operational Efficiency: Proper data management reduces errors and inconsistencies, leading to streamlined operations.
  • Fostering Innovation: Accurate data supports research, product development, and innovation, particularly in creating sustainable products.  

There is often a high cost of poor data quality. For instance, Gartner estimated that poor data quality costs businesses $12.8 million annually, and 95% of organizations acknowledge its negative impact on business performance.  

 

Competitive Advantage  

Prioritizing data quality and management gives companies a competitive edge. We looked at how with accurate and comprehensive data, businesses can:  

  • Stay Ahead: Beat the competition by enabling better decision-making, efficient resource allocation, and long-term planning.  
  • Consolidate Data: Understanding their data landscape empowers businesses to consolidate information across departments, leading to more integrated and effective sustainability strategies.  
  • Enable Planning: Accurate data allows for stable long-term planning, which is crucial for efficient resource allocation and maintaining a competitive advantage.  

By focusing on data quality, companies not only comply with regulations but also turn sustainability into a key driver of profit and innovation.  

   

Best Practices for Data Management  

These are some of the best practices to ensure high-quality data governance:  

  • Clear Policies: Developing and enforcing data management policies to maintain data integrity across systems.  
  • Training and Awareness: Conducting training sessions and raising awareness about the importance of data governance within the organization. This helps foster a culture of responsibility for data quality.  
  • Continuous Improvement: Monitoring data maturity and striving for continuous improvement, such as through regular data audits, validation, and cleansing processes.  
  • Integration Tools: Using advanced data management and integration tools to standardize and simplify data handling.  

These practices ensure that businesses can maintain high-quality, accurate data, which is essential for driving sustainability efforts and making informed decisions.  

   

Before You Begin

It is necessary to initiate engagement with both internal experts and external stakeholders to address data challenges from the very beginning. Key actions would include:  

  • Data Workshops: Conducting workshops to align on data requirements, sources, and quality expectations early in the project lifecycle.  
  • Collaborative Approach: Ensuring close collaboration with stakeholders to resolve data issues promptly.  
  • Proactive Data Quality Maintenance: Identifying and addressing data quality issues before they escalate, and involving the right stakeholders, such as sustainability experts, from the start.  

Early engagement and alignment on data management practices ensure a smoother, more efficient sustainability data integration process.  

 

Preparation is Key

To prepare for successful sustainability data management you should first focus on:  

  • Data Discovery: Starting with a thorough review of the company’s existing data, its sources, and stakeholders involved.  
  • Pilot Projects: Running a pilot or Proof of Concept (POC) project to test the integration of the source data into the system, which helps prepare for a full rollout.  
  • Workshops and Feedback: Conducting detailed workshops with IT teams to identify all data points, receive feedback, and suggest improvements. Data enrichment processes ensure the data is ready for system integration.  
  • ETL Process: The Extract, Transform, Load (ETL) process connects raw data from various sources to the system. After user training and acceptance testing, the project can go live.  

By focusing on data quality and system readiness early on, companies can achieve smooth integration and reliable sustainability outcomes.  

   

Actions You Can Take Now

Throughout the Masterclass our data experts emphasized the need for a robust data strategy. These are some of the key action points to kick of a successful data strategy:  

  • Data Awareness: Understand the organization’s system landscape and ensure data completeness and accuracy.  
  • Leadership Involvement: Prioritize data governance and quality, with leadership setting the tone for an organization-wide focus on data integrity.  
  • Regular Audits: Perform regular data audits and implement validation processes to maintain data quality.  
  • Employee Education: Train employees on the importance of data quality and management, which is crucial for long-term success.  
  • Advanced Tools: Leverage advanced data management and integration tools to stay ahead of data governance challenges.

Sustainability data challenges can hinder a company’s ability to make informed decisions, drive innovation, and stay competitive. By addressing these challenges with structured data management strategies, clear governance frameworks, and continuous improvement efforts, businesses can unlock new opportunities.   

Prioritizing data quality not only supports sustainability goals but also positions companies for long-term success and profitability.

Want more information on how to overcome the sustainability data problem? Read our playbook on that and more now.

How to write an RFP for sustainability solutions

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The RFP template

DOWNLOAD MAKERSITE’S RFP TEMPLATE

Writing an effective RFP can be a challenge. Your company will have specific goals and objectives, and you’ll need to be able to put together a logical yet thorough question set that enables you to identify the best vendor for the project. With that in mind, we’ve worked to build out what we consider to be the ideal RFP template – and, given that we’ve seen a fair few, we like to think we know what we’re talking about. 

Our rationale was as follows:

  • The RFP template should be simple in format and execution, but adequately thorough
  • It should help your company to ask qualified questions that unlock the right answers, rather than relying on generic question sets that more often than not produce inadequate answers
  • The question set should always consider the fact that the customer has a specific goal in mind
  • Wherever possible, questions should be open rather than closed, allowing for more detail. If closed questions are deemed necessary, they should be at the bottom of the list
  • We’ll use our expertise as a company to accurately reflect what top tier manufacturers are asking. The RFP template is designed to replicate the RFP processes of leaders in their respective fields
  • To create a template that negates the need for external consultants, who don’t necessarily know what the company needs or how to articulate those needs

There are 123 questions across 13 separate sections that represent an ideal baseline. The template does not have to be set in stone. Certain manufacturers or users will have other questions they may wish to add, or will find questions in this template that they don’t consider necessary. However, its purpose is to help anyone struggling with putting together an RFP to ask the necessary questions rather than relying on a generic question set that any supplier can fulfil. 

This is what the best in their fields seek to create when it comes to building an RFP. In creating this template, our aim was straightforward: make it simple, and help users to design their solution based on what leaders are doing. 

You can view the template for reference in the embed at the bottom of this page, or you can download the Excel version to use and edit for yourself at the link at the top.

What makes a ‘best in class’ RFP?

What does the ideal RFP (Request for Prospoal) look like? It’s a common question, but one without a definitive answer.  No two are the same and many manufacturers remain unsure of what they need, relying on basic templates to communicate often complex needs and requirements. Often, unfortunately, those templates are not up to scratch. But that’s not to say that the perfect example doesn’t exist.

RFPs, without doubt, remain an important part of the manufacturing process – an essential tool when it comes to completing a project that you need outside help with. An RFP done correctly not only enables your organization to find the best solution to the task (given that different companies might have different ideas or ways to tackle it), but also helps you to compare the costs of different providers and find the right option for your budget.   

RFPs also help to negate an element of risk early on in the manufacturing process, allowing you to be sure that the company you choose to do the work knows what they’re doing and can deliver what you need. 

For many, the process of putting together an RFP can be a challenge – a drain on both time and resources. From a lack of initial clarity (meaning that proposals may come back incomplete or unaligned with company needs) to scope creep (where the scope of the project changes during the RFP process due to a lack of forward thinking and due diligence), initial hurdles can make the desired outcome significantly harder to achieve for all concerned. 

Companies also struggle to find the right balance of information. Too much detail can overwhelm potential bidders, while too little may leave vendors guessing. From writing the requirements to reviewing proposals, building out an RFP is a time-consuming process, one often further hindered by vendor management issues (where keeping track of questions, updates, and proposal submissions requires careful organization), budgetary concerns (where companies may have a hard time estimating the right budget for the project, and sometimes don’t include budget information in the RFP) and a lack of defined evaluation criteria (where companies may not have a structured approach for comparing different aspects like price, experience, and quality.) 

When these challenges are made clear and are proactively addressed, companies can begin to streamline the RFP process and increase the chances of selecting the best partner for their project. 

“An RFP done correctly not only enables your organization to find the best solution to the task (given that different companies might have different ideas or ways to tackle it), but also helps you to compare the costs of different providers and find the right option for your budget.”

Why getting it right matters

A good RFP template helps to tick a number of boxes. It saves time, facilitating a faster turnaround in creating and distributing RFPs, reducing delays in project timelines. It ensures consistency, making it easier for vendors to understand what’s required, regardless of the project. Done correctly, it reduces the risk of missing critical information, ensuring vendors have all the details needed to create a thorough proposal. It helps to avoid miscommunication or confusion, leading to proposals that better align with the company’s needs, whilst also simplifying the evaluation process, as the company can quickly compare key factors like costs, timelines, and experience side by side.  

Furthermore, it helps to prevent scope changes and misunderstandings that could arise during the project and has the added benefit of making sure that vendors know exactly what to address in their proposals, reducing back-and-forth and ensuring more complete responses. 

Ultimately, the organization issuing the RFP is seeking help because they need expertise or resources they don’t have internally. The RFP process allows them to gather multiple solutions, ensure fairness, manage costs, and reduce risks, thereby helping them choose the best provider to achieve their project goals. 

The End of the Entrepreneur: The Steps We Must Take to Build a Better Future

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What does the ‘Age of the Engineer’ – the term I use to describe our need to empower better product design and manufacturing – look like in reality, and how do we make it possible? I see three first steps:

Getting engineers back into the boardroom

I’ve talked before about entrepreneurs as the ‘villain’ of this narrative because it simplifies the framing. However, it might be better in this instance to specify that I’m talking about a non-founding CEO. As a company grows the need for a generalist – a safe pair of hands – arises. There are many benefits to that approach, of course, but too often the spark is lost – the company stops building great things, and the focus shifts to managing what it does well. We’re in need of something else now – we need to rebuild our products and the infrastructure we use to make and utilize them. We need builders. The founders and early engineers of some of our greatest companies were – and still are – engineers by trade and I think it’s time we put them back in the boardroom. For those starting out, my recommendation is to give their technology leader a seat at the board.

Why? My contention is that businesses who want to succeed in a future likely to be defined by seismic change need to spend more time on innovation-led growth than most large enterprises do now. This requires a different mindset towards risk and reward and one can only achieve that through a voice being present at the highest levels of decision making. A overarching vision of what is possible and the technical understanding of how to achieve it results in speed of execution and that combination is often found with engineering leaders. In business, speed is everything and businesses that do this will innovate out of their current situation faster and more successfully.

Adding sustainability as a core metric to product design

A company is its products. If we want to build more successful companies of the future, we’ll need them to have great products that are sustainable. That is not possible unless we embed sustainability into design, just as we do performance, risk and cost.

Every company is different and even within a company, different product lines may cater to different market segments with different preferences. There are no perfect products because there are no perfect customers or infrastructure to build or use these products, so there will always be trade-offs. I do believe, however, that unless these trade-offs are made consciously, products will continue to diverge from sustainability. This will create a widening gap to market requirements.

I’m already seeing advanced organizations who are most of the way there. They’re what we might call ‘mature’ in their approach, set apart from the ‘novices’ because they have made sustainability a design parameter. For them it is another metric, defined by a series of non-negotiable targets that must be hit in order to unlock the rewards – from growth in new markets to better productivity and efficiency to how people are compensated.

Integrating data and enriching operational systems with it

When it comes to engineering, we don’t need to be doing the same things faster. We need to be doing them better. And to do things better, we don’t need more data – we need smarter data.

Our observations show that up to 90% of the data required to understand how to make and sell products doesn’t sit within a company’s systems. The reason for that is that most products are increasingly becoming “assemblies” with large portions being built in complex upstream supply chains. An average car for example has 70% of its components built in this way. Use and End-of-Life data also typically do not sit in company systems. How could one understand the cost, risk or sustainability impacts from these stages? The solution is to collect and combine this “value chain” information from external sources with company data about the product and operations to allow for full-life-cycle view of the implications of design across all the key design criteria. I call this product lifecycle intelligence.

But it doesn’t stop there. This enriched information needs to be available not in data lakes, expert systems and BI tools, but in operational systems like CAD, PLM and ERP so that engineers can use this information in trade-off analysis, within their existing workflows. This “shifting left” of data and insight, to have it available early on and at every stage of the development process, has long been known to reduce development time and avoid costly mistakes. Technology now allows for this.

Conclusion

The ‘Age of the Engineer’ signifies a pivotal transformation in how we approach innovation and sustainability in business. By reinstating engineers into the boardroom, we leverage their unique expertise to drive not just technological advancements but strategic decisions that prioritize long-term value over short-term gains. By integrating comprehensive data into operational systems to enhance decision-making and efficiency, we will empower businesses to build smarter, more sustainable products that meet the demands of a rapidly changing world.

The ‘Age of the Engineer’ is not just an ideal; it is an imperative, charting a course towards a future where technological prowess and sustainability go hand in hand. By giving engineers the spotlight, and by doubling down on sustainable practices, we’re no longer dreaming about a better tomorrow – we’re actively creating it.

This article first appeared on Forbes.com.

From Data to Decisions: How LCA Software Powers Sustainable Growth

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In today’s business landscape, sustainability is no longer a buzzword — it’s a necessity. Companies are increasingly under pressure from consumers, investors, and regulatory bodies to adopt more sustainable practices. One critical solution to this is Life Cycle Assessment (LCA) software, a tool that transforms complex data into actionable insights, driving sustainable growth and operational efficiency. Let’s explore how LCA software addresses common pain points and empowers businesses to make informed, sustainable decisions. 

Automating Life Cycle Assessments 

One of the primary challenges companies face is the labor-intensive nature of conducting life cycle assessments. Manual LCA processes involve collecting data from various sources, analyzing it, and then interpreting the results — a time-consuming and often error-prone undertaking. LCA software (as seen in Makersite’s work with Microsoft), however, automates these processes, significantly reducing the workload, accelerating the data assessment process and enhancing accuracy by minimizing human error. This allows businesses to conduct LCAs more frequently and efficiently, ensuring that sustainability is able to remain a continuous, integrated part of their operations. 

Example: 

A consumer goods manufacturer can use LCA software to automate the assessment of thousands of products across different regions. This not only speeds up the process but also provides more reliable data for making strategic decisions on product design and material sourcing. 

Enhancing Sustainability Reporting 

Sustainability reporting is critical for transparency and compliance with an ever-growing slate of regulations. However, compiling comprehensive and accurate reports manually can be daunting. LCA software simplifies sustainability reporting by providing a centralized platform for data collection and analysis. The software can automatically generate reports that comply with various standards and frameworks, not only saving time but also ensuring that reports are accurate and consistent, bolstering both the company’s credibility and compliance. 

Example: 

A large retailer can use LCA software to streamline its annual sustainability report, ensuring that data from all departments is consistent and compliant with international standards. This has the added benefit of enhancing the retailer’s reputation among environmentally conscious consumers and investors. 

Scaling Sustainable Business Practices 

For businesses looking to scale their sustainability efforts, LCA software is indispensable. As companies grow, so do the complexities of their supply chains and operations. Manual approaches to LCA are almost impossible to scale accurately, often leading to fragmented and inconsistent sustainability practices. LCA software, on the other hand, provides a scalable solution that can handle large volumes of data across multiple sites and products. This scalability ensures that sustainability efforts are uniform across the organization, facilitating broader and more impactful environmental initiatives. 

Example: 

An automotive company can use LCA software to evaluate the environmental impact of its product lineup across multiple markets. This allows the company to implement standardized sustainability practices globally, ensuring that all operations contribute to the company’s overall environmental goals. 

Making Sustainable Manufacturing More Efficient 

Manufacturing is a resource-intensive process (research shows that approximately 80% of a product’s environmental impact is determined during the design phase), and making it sustainable is a significant challenge.  

LCA software helps manufacturers identify inefficiencies and areas for improvement by providing detailed insights into the environmental impacts of their processes. By analyzing data on energy use, waste generation, and emissions, companies can implement targeted strategies to reduce their environmental footprint. This not only helps in achieving sustainability goals but also often results in cost savings through improved efficiency and resource management. 

Example: 

A packaging company can use LCA software to analyze the lifecycle of its products, identifying opportunities to reduce material waste and energy consumption in production. This leads to both cost savings and a reduced environmental footprint. 

Overcoming the Limitations of Manual LCA 

Manual life cycle assessments are fraught with limitations. They are time-consuming, prone to errors, and often lack the granularity needed for precise decision-making. Furthermore, different business units operating in siloes can lead to inconsistent data and fragmented sustainability efforts. LCA software addresses these issues by providing a unified platform for data integration and analysis. This ensures that all business units are aligned and working with the same accurate, up-to-date information. The result is a more cohesive and effective approach to sustainability. 

Example: 

A multinational corporation can use LCA software to integrate data from various departments, ensuring that sustainability metrics are consistent across all regions and product lines. This unified approach facilitates better strategic planning and resource allocation. 

Assisting with Scope 3 Calculations 

Scope 3 emissions, which include all indirect emissions that occur in the value chain of the reporting company, are notoriously difficult to measure and manage. Traditional methods of calculating these emissions are complex and often inaccurate due to the vast amount of data required. LCA software simplifies scope 3 calculations by automating data collection from suppliers and other value chain partners. This leads to more accurate and comprehensive assessments of a company’s total carbon footprint, enabling more effective strategies to reduce emissions. 

Example: 

A food and beverage company can use LCA software to track emissions across its supply chain, including agricultural practices, transportation, and packaging. This comprehensive view helps the company identify and target high-emission areas for improvement. 

Addressing Issues with Manual Data Processing 

Manually processing the vast amounts of data required for LCA is not only tedious but also increases the likelihood of errors. Data discrepancies, incomplete information, and the sheer volume of data can overwhelm sustainability teams. LCA software mitigates these issues by automating data processing, ensuring that data is accurate, complete, and consistent. This automation allows sustainability teams to focus on interpreting the data and making strategic decisions rather than getting sidelined by data entry and verification. 

Example: 

A technology company can use LCA software to automate the processing of data from its global supply chain, ensuring that all environmental impacts are accurately recorded and analyzed. This allows the company to quickly respond to sustainability challenges and opportunities. 

Scaling Accurate and Granular Data 

Accurate and granular data is crucial for effective sustainability initiatives. Without precise data, companies cannot accurately measure their environmental impacts or the effectiveness of their sustainability strategies. LCA software provides the tools needed to collect, process, and analyze detailed data on a large scale. This granularity enables companies to pinpoint specific areas for improvement and track the progress of their sustainability efforts with a high degree of accuracy. 

Example: 

A chemical company can use LCA software to gather detailed data on the environmental impacts of each stage of its product lifecycle, from raw material extraction to disposal. This level of detail enables the company to implement more precise and effective sustainability measures. 

Common Problems Faced Without the Right LCA Software 

Businesses that do not use the right LCA software often face a myriad of challenges. As discussed above, these include inefficient and error-prone manual processes, inconsistent data across different business units, difficulty in scaling sustainability efforts, and challenges in meeting regulatory compliance. Without LCA software, companies struggle to conduct comprehensive and accurate life cycle assessments, leading to missed opportunities for improvement and potential reputational damage. 

Let’s recap the most common problems: 

Inefficient Manual Processes 

Manual LCA processes are labor-intensive and slow, often resulting in delays and increased costs. The time and resources required to collect and analyze data manually can be prohibitive, especially for large companies with complex supply chains. 

Inconsistent Data 

Different business units operating in siloes often lead to inconsistent data collection and reporting. This fragmentation hampers the ability to get a clear, unified view of the company’s overall environmental impact, making it difficult to implement cohesive sustainability strategies. 

Difficulty in Scaling 

As businesses grow, so do the complexities of their operations. Without the right LCA software, scaling sustainability efforts becomes challenging. Manual processes simply cannot keep up with the increased data volume and complexity, leading to inefficiencies and gaps in sustainability initiatives that will only increase and become harder to tackle effectively with time. 

Regulatory Compliance Challenges 

Meeting regulatory requirements for sustainability reporting is critical but can be difficult without the right tools. Manual processes increase the risk of errors and non-compliance, potentially resulting in fines and reputational damage. LCA software ensures that all data is accurately collected and reported, helping companies stay compliant with environmental regulations. 

Missed Opportunities for Improvement 

Without accurate and comprehensive data, companies may miss opportunities to improve their sustainability practices. LCA software provides the detailed insights needed to identify inefficiencies and areas for improvement, enabling more effective and impactful sustainability strategies. 

Driving Growth Through Sustainable Practices 

LCA software is not just a tool for compliance; it’s a strategic asset that drives growth through sustainable practices. By providing detailed insights into every aspect of the product lifecycle, LCA software helps businesses innovate and improve their products and processes. This leads to the development of more sustainable products that meet consumer demand and regulatory standards, opening new market opportunities and enhancing brand reputation. 

Innovation and Product Development 

LCA software enables companies to explore different materials and production methods, assessing their environmental impacts before implementation. This fosters innovation in product development, leading to more sustainable products that can attract eco-conscious consumers and differentiate the company in the market. 

Market Differentiation 

Companies that can demonstrate their commitment to sustainability through rigorous LCA practices can differentiate themselves in the marketplace. This not only attracts environmentally conscious consumers but also appeals to investors looking for responsible and future-oriented businesses. 

Cost Savings and Efficiency 

Sustainable practices often lead to cost savings through improved resource efficiency and waste reduction. LCA software helps identify these opportunities, ensuring that sustainability initiatives are also financially beneficial. 

Regulatory and Compliance Benefits 

Proactively managing sustainability through LCA software helps companies stay ahead of regulatory changes and avoid potential fines or sanctions. It also enhances the company’s reputation with regulators and stakeholders. 

Conclusion 

LCA software is a powerful tool that transforms data into actionable insights, driving sustainable growth and enhancing operational efficiency. By automating life cycle assessments, better facilitating sustainability reporting, and enabling the scaling of sustainable business practices, LCA software addresses many of the common pain points faced by companies today.  

It makes sustainable manufacturing more efficient, assists with scope 3 calculations, and ensures accurate and granular data processing. In an era where sustainability is paramount, investing in the right LCA software is essential for businesses looking to thrive while minimizing their environmental impact. 

The right LCA software not only simplifies and streamlines sustainability efforts but also provides a competitive edge by enabling companies to operate more efficiently and transparently. As the demand for sustainable practices continues to grow, leveraging LCA software will be crucial in helping businesses make informed decisions that benefit both the planet and their bottom line. 

Examining the new Ecodesign Regulation

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In recent years, legislators have passed down a glut of regulations that organizations have had to figure out how to deal with. While all have their merits, it’s almost a given that some get a little lost in the noise. However, every now and then a regulatory development occurs that has the power to change the design and manufacturing landscape as we know it, and for good. 

That happened on 23rd April 2024. The European Parliament approved a new Ecodesign Regulation to make products sold in the EU more reusable, repairable, upgradeable, and recyclable. 

Let’s take a look at what it means, who it will impact, and the actions you need to take. 

What is the new Ecodesign Regulation? 

After a somewhat tumultuous journey through the legislative corridors of the European Parliament, the version of the Ecodesign Regulation for Sustainable Products (ESPR) that passed on 23rd April was both final and unanimously agreed upon. It is a framework that will significantly alter how goods are introduced and sold in the EU. 

The intention behind it is clear. As Italian lawmaker Alessandra Moretti said, it is “time to put an end to the ‘take, make, throw away’ model that is so harmful to our planet, our health and our economy”. 

The new rules will update the current 2009 directive, which exclusively concerned energy-related products, in terms of efficiency and circularity. They call on the Commission to give priority to resource-intensive sectors such as iron, steel, aluminium, textiles, furniture, tyres, detergents, paints, lubricants, and chemicals. It’ll also enforce a Digital Product Passport to aid informed consumer choices. 

A key element of the Green Deal, ESPR is part of the broader circular economy package, which aims for the EU to use and reuse materials far more efficiently. The package also contributes towards the EU’s goal of having net zero greenhouse gas emissions by 2050 and should reduce harm to the environment. 

As Moretti summarized: “Sustainable products will become the norm, allowing consumers to save energy, repair and make smart environmental choices when they are shopping.” 

The text now needs the final approval from national governments to enter into EU law. 

Monique Goyens, director general of BEUC, the European consumer organisation, concluded that “the framework needs to be implemented quickly. It is essential that the European Commission and member state market surveillance authorities allocate resources to the development and application of the new rules.” 

What happens next? 

ESPR is due to be published in the Official Journal of the EU and enter into force by July 2024. The first delegated acts spelling out specific ecodesign requirements may not come into force until the second half of 2025. The first ecodesign requirements are expected to apply to textiles and steel, and are likely to enter into force by mid-2027.   

In addition, the EU is expected to publish a three-year working plan prioritising ecodesign requirements per product in March 2025, providing further guidance as to when products will come under increased scrutiny. 

However, given design and production cycles, manufacturers of products, especially those on the European Commission’s priority list, should begin to familiarise themselves with the ESPR’s requirements now and assess what needs to be done to ensure their products are compliant. If they don’t, they could risk losing access to the EU market as well as losing significant ground to better prepared competitors. 

Without doubt, these requirements represent a pivotal moment for the manufacturing industry, challenging stakeholders across businesses to rethink their production methods. Those companies who are able to adopt a proactive approach to ecodesign will be ahead of the curve. Companies who leave it leave to the last minute – those who lack urgency until the regulation is live – will find it hard to catch up. 

Indeed, at Makersite, we’re already seeing mature companies like Microsoft taking the necessary steps. For the last two years they’ve worked to rebuild and refine their Surface Pro 10, using Makersite’s automated LCA models to identify and evaluate hotspots in their supply chain. In doing so, they reduced its carbon footprints by up to 28% within a 24-month timespan. 

This is the gold standard. It is what all businesses should be aiming for. It takes a long time to get to where you need to be. If we look back at similar regulatory developments that went on to facilitate a sea change in manufacturing approaches and consumer awareness (like nutrition labels in the early 1970s, for example), it’s obvious that it won’t take long for something like ESPR to reach critical mass.  

Within a decade, it’s extremely likely that it will have reached mass adoption in Europe. It’s a plan as ambitious as it is comprehensive. And it’s one where a forward-thinking approach – utilizing a solution where environmental impacts can be determined in just minutes – will make all the difference. 

What actions should you take – and when? 

Now is not the time to hold back. Those organizations who wait for final approval will find themselves firmly on the back foot. Businesses who seek to get their houses in order immediately will reap the rewards further down the line. 

The impact of ESPR on companies’ core operations will be significant. Beyond specific traceability elements, the requirements will directly affect products at all stages in the value chain, including recyclability, the use of recycled contents, and durability. 

ESPR will require that companies look at products and their value chains, create transparency and evaluate impacts at that level, and report on that – all on a regular basis. It’s not something that can be done one product at a time. It needs a different approach. 

Today, most organizations are not set up to deal with reporting on that scale. But in order to succeed, they need to equip their engineers and designers with tools that offer instantaneous feedback on the environmental impact of design alterations in order for them to ensure that sustainable products not only adhere to the new regulations but become the norm. 

In order to comply with the regulation, businesses now need to take the proper steps to collect realistic data and create the necessary infrastructure to drive innovation, all while obtaining real-time insights into the impact of changes on the environmental impact of products.

In order align with ESPR and reduce a product’s environmental impact quickly, organizations need to be able to immediately see how material, manufacturing processes or supplier changes impact a product’s sustainability. Outdated methods – like manually conducted LCAs – will invariably fall short of providing those essential real-time insights which are critical when it comes to making efficient and significant progress in product sustainability.

As we stated earlier, ESPR aims to improve products by emphasising durability, energy efficiency, recyclability, and more. With access to immediate insights, design teams can align their efforts with ESPR objectives, in turn enabling them to test and discover a significantly higher number of possible solutions to improve their products. Those who do so are likely to dramatically outpace peers yet to embrace a new approach, with those lagging behind likely to find themselves waiting weeks or even months to find out if their new ideas positively affect their products’ environmental impact.

The journey to sustainable product design is paved with challenges, but each obstacle is an opportunity to innovate. Whilst new regulations might seem daunting, time consuming and even frustrating they also represent a chance to make meaningful change and to take alead over competitors not ready or aware enough to act quickly.  

Don’t let poor data, slow LCA execution speeds and external dependencies stop you from discovering the most sustainable version of your product.

Top 5 LCA priorities for American automotive manufacturers

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The American automotive industry stands at a crucial junction where sustainability isn’t just a buzzword; it’s fundamental to continued profitability and regulatory compliance. With the clamor for eco-friendly vehicles rising in pitch, it’s imperative that manufacturers align themselves with the latest in sustainable practices. By zeroing in on Life Cycle Assessment (LCA) priorities, companies can not only enhance their environmental credentials but also ensure greater efficiency and accuracy too. 

Analyzing missteps in automotive Life Cycle Assessment practices 

Despite notable strides made by the automotive industry toward sustainability, significant areas of oversight within the realm of Life Cycle Assessment (LCA) practices remain. The industry’s focus has predominantly been myopic, concentrating narrowly on tailpipe emissions while overlooking the comprehensive environmental impact generated throughout a vehicle’s life cycle.  

This shortsightedness results in neglecting critical stages like raw material extraction, manufacturing processes, and end-of-life disposal or recycling procedures. Moreover, a prevalent undervaluation of the environmental footprint associated with electric vehicle batteries is evident, as it fails to consider the emissions and resource depletion linked to their production and ultimate disposal.  

Through the incomplete integration of LCA practices into decision-making processes, manufacturers unintentionally bypass opportunities for innovation in sustainable materials and practices. This shortfall hampers their ability to effectively mitigate the overall environmental impact. Recognizing and rectifying these deficiencies is not just advantageous; it is crucial for those aiming to take the lead in the forthcoming era of automotive manufacturing. 

This list dives into five pivotal LCA priorities that are essential to the modern American automotive manufacturer. From production phases to the hands of consumers, these strategies can redefine the industry’s standard for responsible vehicle manufacturing.

1. Embrace LCA beyond tailpipe emissions 

With a growing emphasis on eco-friendliness, many automotive manufacturers have solely focused on reducing tailpipe emissions to comply with regulations and consumer demands. However, this narrow outlook neglects the bigger picture of a vehicle’s environmental impact throughout its entire life cycle. By expanding their LCA analysis to include all stages – from raw material extraction to end-of-life disposal or recycling – manufacturers can make more informed decisions and develop more sustainable vehicles. 

An LCA-driven approach that encompasses the entire production process can identify areas for improvement and innovation, allowing manufacturers to reduce their overall environmental impact and gain a competitive edge.

2. Integrate LCA into design processes 

Innovation is at the heart of automotive manufacturing, and LCA needs to be integrated into this process from the very beginning. By implementing LCA principles during the design phase – such as using more sustainable materials, optimizing production processes, and considering end-of-life options – manufacturers can reduce the environmental impact of their vehicles without compromising performance. This approach also allows for the identification of potential trade-offs between sustainability and other key factors, enabling more comprehensive evaluation and informed decision-making. 

Advancements in technology have opened new opportunities for sustainable practices in automotive manufacturing. By embracing digital tools like simulation software and machine learning, manufacturers can optimize production processes and reduce waste and emissions. Additionally, innovation in electric and autonomous vehicle technologies presents opportunities for greater sustainability throughout a vehicle’s entire life cycle. By incorporating these advancements into LCA analysis, manufacturers can identify areas where AI can be leveraged to enhance sustainability and make informed decisions that align with their environmental goals and meet global regulatory compliance requirements.  

3. Consider battery environmental impact 

With electric vehicles rapidly gaining ground in the market, manufacturers must consider the environmental impact of their batteries. From raw material extraction to end-of-life disposal, these essential components can have a significant impact on a vehicle’s overall environmental footprint. By integrating LCA into battery production processes and exploring more sustainable battery materials, manufacturers can reduce emissions and resource depletion associated with this critical component.  

The shift towards electric vehicles introduces new environmental considerations, particularly regarding the production, use, and disposal of batteries. A thorough LCA of EV batteries is crucial to ensure that the environmental benefits of driving electric cars outweigh the impacts associated with battery manufacturing and end-of-life management. By focusing on sustainably sourced battery materials, optimizing battery life, and advancing recycling technologies, manufacturers can mitigate the environmental footprint of their EV offerings.  

This measure not only aligns with global sustainability targets but also addresses consumer concerns about the true eco-friendliness of electric vehicles. Manufacturers who lead in this area will not only contribute to a more sustainable future but will also gain a competitive advantage in a market that increasingly values environmental responsibility. 

LEARN MORE – Automated Lifecycle Analysis of 18650 Battery

 

4. Investing in sustainable supply chain management 

The automotive industry’s supply chain involves multiple stages, from material sourcing to vehicle assembly. By prioritizing sustainable practices and materials throughout the entire supply chain, manufacturers can significantly reduce their environmental impact. This includes seeking out suppliers that prioritize sustainability, implementing green logistics processes, and utilizing more sustainable materials in production. By working collaboratively with their supply chain partners, automotive manufacturers can establish a more sustainable ecosystem that benefits both the environment and their business. 

Prioritizing LCA in all aspects of vehicle production is crucial for automotive manufacturers to thrive in today’s sustainability-driven market. By expanding their focus beyond tailpipe emissions, utilizing sustainable materials and design processes, adopting circular economy principles, and considering battery environmental impact and supply chain sustainability, manufacturers can lead the way towards a greener and more sustainable automotive industry. 

Embracing automated LCA platforms, such as Makersite, and the provision of essential tools for developing innovative, eco-friendly vehicles will help American auto manufactures to secure a competitive edge. 

5. Invest in end-of-life options 

As vehicles reach the end of their life cycle, proper disposal or recycling is essential when it comes to reducing environmental impact. By investing in sustainable end-of-life options, such as recycling programs for batteries and other vehicle components, manufacturers can minimize waste and resource depletion while also showcasing a commitment to sustainability. 

By embracing these five LCA priorities, automotive manufacturers can position themselves as leaders in sustainability and innovation. It’s time for the industry to shift its focus from solely reducing emissions to considering the entire life cycle of a vehicle and making more informed decisions that benefit both the environment and their bottom line.  

It is imperative for all automotive manufacturers to prioritize LCA and integrate it into their supply chain and design processes to not only meet regulatory standards but also to stay ahead of the competition and establish themselves as responsible leaders in the industry. The time for change is now, and by working together, we can create a more sustainable future for the automotive manufacturing sector.  

It’s time to drive towards a greener tomorrow. 

Using AI for cradle-to-grave product lifecycle analysis (LCA)

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In an age where sustainability is no longer optional but crucial for business longevity and global well-being, product lifecycle analysis (LCA) stands as an invaluable tool for measuring and reducing the environmental impact of products. However, the complexities involved in traditional LCAs, as well as the dependence on specific expertise, often lead to time and resource-intensive processes, which can be barriers to widespread adoption, particularly for smaller businesses. 

Enter artificial intelligence (AI), with its capabilities to automate, analyze, and scale. The integration of AI into LCA processes offers a new horizon for manufacturers and sustainable innovators to conduct more thorough and frequent analyses, leading to more informed decision-making and, ultimately, greener products. This blog explores the role of AI in revolutionizing product LCAs, the benefits it offers, and the challenges it confronts, as well as real-world examples of AI-driven LCA in action. 

For a comprehensive look at navigating AI’s potential and pitfalls with LCA, and ensuring trustworthy results, we delve deeper into these topics in our latest whitepaper – The AI tightrope: Balancing automation, accuracy and trust in LCA/EPD

Understanding product lifecycle analysis 

Product Lifecycle Analysis (LCA) can be categorized mainly into two types: “cradle-to-gate” and “cradle-to-grave.”  

Cradle-to-gate LCA focuses on assessing the environmental impact of a product from the extraction of raw materials (the cradle) up to the point where the product leaves the factory gate, ready for distribution. It doesn’t consider the use and disposal phases of the product’s life cycle.  

In contrast, cradle-to-grave LCA encompasses a more comprehensive assessment, extending from raw material extraction through to the product’s end-of-life disposal, including its use, recycling, and landfill stages. 

The principal advantage of cradle-to-grave LCA lies in its holistic approach. By considering the entire lifespan of a product, this method provides a more accurate picture of its environmental impact.  

This thorough analysis enables manufacturers and businesses to identify potential areas for reducing environmental damage not just in production, but in product use and disposal as well, leading to more sustainable products and practices. Consequently, cradle-to-grave LCA is often regarded as superior for those aiming to make genuinely eco-friendly decisions. 

Challenges in conducting cradle-to-grave LCA 

Undertaking a cradle-to-grave life cycle assessment poses distinctive challenges for sustainability professionals. One major obstacle lies in the difficulty of acquiring precise and comprehensive data concerning the environmental impact of raw material extraction and processing. This data is crucial for conducting a thorough LCA but can prove elusive due to proprietary processes or the dispersed nature of supply chains. 

Another hurdle is the intricate nature of contemporary supply chains themselves. Products often traverse multiple countries and manufacturing stages before reaching the final disposal stage, complicating the tracking of their precise environmental impact. Moreover, standardizing this data for comparison purposes can be laborious, given the diverse production techniques and materials utilized across various industries. 

These challenges demand advanced expertise, significant resources, and frequently, innovative data collection and analysis methods, underscoring the intricacy and significance of conducting precise cradle-to-grave LCAs. 

Overcoming challenges in LCA with AI 

AI plays a pivotal role in revolutionizing cradle-to-grave life cycle assessment (LCA) by offering unparalleled advantages in data collection, processing, and mapping across diverse systems. Firstly, AI streamlines the collection process by automatically gathering data from a myriad of sources, such as online databases and enterprise systems. This automation not only saves time and resources but also guarantees the inclusion of up-to-date data in the analysis. 

Secondly, AI’s capability to handle vast datasets enables sophisticated mapping and processing, significantly bolstering LCA efforts by intelligently inferring and filling gaps in datasets, thereby providing a more complete and accurate picture of a product’s environmental impact. 

Manufacturers can proactively identify and address potential environmental risks through AI-driven simulations of various scenarios like material changes or production process adjustments, thus bolstering sustainability efforts. 

Moreover, AI facilitates real-time monitoring and optimization by providing continuous feedback loops. For instance, product data models built with AI can help engineers quickly identify alternative material or supplier choices, based on multiple criteria such as cost or environmental impact. This real-time insight empowers organizations to make informed decisions promptly, ensuring efficient resource utilization and environmental lifecycle thinking. 

Benefits for manufacturers and sustainable innovators 

AI brings a multitude of benefits to those invested in sustainable practices, ranging from efficiency and innovation to market competitiveness. 

Improved decision-making processes 

By enhancing the speed and accuracy of LCA, AI empowers decision-makers to develop and implement sustainability strategies more proactively. With AI insights, product teams can prioritize areas for improvement and make smarter choices that align with business and environmental goals. 

Enhanced product innovation and market competitiveness 

AI’s contributions to LCA enable businesses to innovate sustainably. Through a deeper understanding of their products’ lifecycles, companies can develop eco-friendly products that resonate with consumers’ growing environmental consciousness, thereby gaining a competitive edge in the market. 

Challenges and considerations 

While the prospects of AI in LCA are promising, there are challenges that need to be addressed. 

Data accuracy and reliability 

The effectiveness of AI-driven LCAs depends on the quality of the input data. Ensuring the accuracy and reliability of data sources, especially those feeding predictive models, is critical to generate meaningful and actionable insights. 

Integration with existing systems and workflows 

Adopting AI solutions for LCA needs careful integration with existing systems and workflows. For successful implementation of AI in LCA, it’s important to integrate product data from Product Lifecycle Management (PLM) systems and map this information to transaction data held in Enterprise Resource Planning (ERP) or purchasing systems, ensuring a seamless flow of information and heightened efficiency in sustainability analysis. 

Examples of AI-enabled LCA 

Several industries have begun to leverage AI for LCA: 

  • Amazon and Flamingo: With the assistance of Flamingo, an AI-powered algorithm, Amazon is now able to swiftly and precisely measure the carbon footprint of its products. In a specific trial, the algorithm decreased the time required by scientists to map 15,000 Amazon products from a month to just a few hours.
  • Microsoft’s LCA 2.0 powered Makersite: Microsoft is committed to reducing the environmental impacts of its products through structured Ecodesign approaches and LCA. Microsoft’s innovative approach involves leveraging AI and data analysis provided by Makersite to automate and scale the product modeling process, focusing on supply chain-specific environmental impact accounting. The transition to Version 2.0 has improved quality, increased accuracy, and better identification of environmental hotspots in their supply chain. The methodology shift aims to enhance transparency, collaboration, and consistency in LCA results, and product emissions, across Microsoft’s entire product portfolio 

These examples demonstrate the potential of AI to transform LCA into a more agile and strategic product carbon footprint environmental management tool. 

Conclusion 

AI will be a game-changer in many industries. Its role in accelerating and enhancing product design processes makes it a powerful solution for managing complex products and their supply chain. With its ability to clean, connect and enrich cross-departmental data with third-party sources, it removes the dependency on sustainability, cost and risk experts.

With AI, product engineers and designers are able automatically detect and connect product components and manufacturing processes to the right supply chain data from a harmonized and hyper-connected database, instantly solving one of the most time-consuming problems: mapping data to multiple sources at a granular level. The result is a detailed, extremely specific view into deep-tier supply chains, giving users a better understanding of environmental footprints, should-costing, and compliance risks at an unprecedented speed.

As manufacturers and innovators realize the benefits of AI-driven LCAs—better decision-making, deep-tier supply chain visibility, reduced environmental impact, and enhanced competitiveness, to name a few—it’s not a question of whether AI should be integrated, but instead of how quickly and effectively it can be done. 

The AI tightrope: Balancing automation, accuracy and trust in LCA/EPD

Navigating complexities in the automotive industry: Product sustainability & global regulatory compliance  

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While attending the Automotive Industry Action Group’s (AIAG) Hybrid IMDS & Product Chemical Compliance Conference in October this year, the Makersite team delved into what is driving — and hindering — the race to sustainability in the automotive industry. The challenges were clear: Regulatory changes, eco-design for sustainability, and new chemical replacement proposals are all ongoing issues, and ones that we’ve regularly encountered as we work with companies aiming to take the lead in sustainability and efficiency. 

With a heavy focus on global chemical regulations gradually converging with the core principles of product sustainability, it’s fundamental that responsible automotive organizations protect consumers, the environment, and the long-term viability of their industry. These efforts should be driven by a commitment to enhance environmental and human safety which, in turn, reflect a broader societal shift towards more sustainable manufacturing practices. However, there are still a few speed bumps on the way. 

The challenges of keeping up with chemical laws for the North American automotive industry  

The North American automotive industry is grappling with complex set of challenges when it comes to adhering to regional and global regulations, particularly regarding the complex chemical compliance directives coming out of the EU, Canada, South Korea, and China. While there is progress on the horizon, challenges remain within enterprises that are striving to innovate and move design forward.   

Rapidly changing regulatory environments, without a detailed roadmap, remain a significant barrier when it comes to making swift changes, driving innovation and remaining competitive, while also hindering consistent and valuable supplier engagement. 

Although the automotive industry appears to be unanimously onboard with working toward new compliance practices, the newest chemical restriction proposals, upcoming deadlines of reporting compliance, and maturing customer demands mean that many organizations are struggling to strike the right balance with regional and global governing bodies. Moving towards aspirational targets while staying within regulatory lines is a battle many are still fighting. This, in turn, leads us to the latest PFAS proposals, an area where many within the automotive industry still struggle. 

A love-hate relationship with PFAS  

The biggest challenge many automotive businesses face with PFAS (per-and polyfluoroalkyl substances) is that the chemical restriction proposals do not yet have seemingly solid replacements. There is particular concern around the proposed replacements’ applicable endurance and functionality. On one hand, PFAS have been utilized for their non-stick and water-resistant properties in products including car wax and windshield treatments, as well as in the automotive manufacturing process for certain components.   

However, the concern remains that when these chemicals are disposed of or released into the environment, they do not disappear quickly. Ultimately, those within the automotive industry must continue in their efforts to find alternatives that are just as effective but don’t have such a detrimental impact on the environment. In order to achieve this, more replacement options are needed. But without easy access to those replacements or more knowledge around where to source them, the challenge is clear – who exactly will supply them? 

The search for the supplier

Finding alternative suppliers of the essential elements and components for manufacturing a product is a painstaking process, and even the most sustainability-focused organizations can become confused. Once found, ensuring that suppliers are on board with the latest data requirements, quality standards, and delivery schedules is essential. The right collaboration tools and technologies help to streamline communication, share information, and keep everyone moving in the right direction. Transparency is also key, allowing everyone involved to see – and overcome – the challenges and obstacles that lie ahead. However, many automotive companies lack an all-in-one solution or something that can efficiently, sustainably and economically tackle the obstacles they face.  

The big data challenge   

From chemical proposals to 2050 goals, complex challenges abound. But without the standardization of data collection and enhanced visibility into multi-layered supply chain processes, the automotive industry remains somewhat in the dark. Harmonizing North American automotive standards with those of global markets is crucial for both consistent quality and seamless market access. Areas needing improvement range from supplier engagement to robust data management systems for harmonizing standards globally, but replatforming organizations and digitally transforming processes are offering the industry light at the end of the tunnel. 

Integrating AI into sustainability and compliance processes for data collection is pivotal. And with reporting requirements on the rise, digitizing supply chain data is an imperative. But what does a solution capable of addressing these challenges look like? 

Data management systems  

A properly constructed data management system that can unify these elements is key to ensuring that all stakeholders are working from the same foundations. AI is a new and evolving solution, and one that represents a huge – and logical – step forward. 

Ultimately, this isn’t about the human touch alone. Utilizing AI to meet compliance requirements and asses LCAs is a significant advance on current practices, providing instant granularity, transparency, and swift data scrutiny while allowing you to overhaul your product designs and supply chain choices for greener impact both now and in the future. 

With reporting requirements going through something of a growth spurt – now averaging more than 28 reports per organization – the demand for information has accelerated, making the digitization of intricate supply chain data more important. Ensuring that an organization can report at scale with the data transparency and traceability from in-house domains to the global supply chain landscape is a integral part of a smoother and more efficient operation. Archaic systems and processes risk hindering the futureproofing of a product’s sustainable life and design. 

Navigating sustainability with Makersite 

Sustainability data acts as the cornerstone of any project. Any organization truly seeking to succeed must futureproof product design, cross-referencing data to identify gaps and formulate a layer of aggregation. Unfortunately, many in the automotive or heavy equipment manufacturing industry have noted that their organization’s current processes or resources are keeping them from achieving those objectives. 

Managing your data and improving it rapidly is increasingly becoming an imperative. Integrating AI capabilities to evaluate your LCAs offers not only instant transparency but prompt data assessment, meaning that you can achieve granular visibility into the environmental footprint of your supply chains within months and make the necessary changes needed to your product designs within minutes. By opening up these possibilities, organizations are empowering their procurement teams to go fully green while maximizing their R&D teams’ design choices in the process. 

A SaaS solution that can not only simplify the roadmap to compliance, but also gives organizations the opportunity to make substantial efficiency gains is a game-changer. It enables innovation and industry-leading sustainability practices, casting the time-consuming days of manually navigating and interpreting regulatory complexities to the past.

While Makersite may not have the answer to what’s coming next with PFAS, we can provide the tools to drive product sustainability and enhance supply chain granularity, ensuring that automotive manufacturers can rapidly identify and address any issues from cradle, to gate, to grave.   

 

Why combining LCA and scope 3 removes the need for guesswork

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Better together

There are many good reasons to take a more granular approach to measuring scope 3. Aside from meeting changing regulatory requirements, the more detail and the more data you have, the easier it will be to assess where the emission hotspots are across your value chain, allowing you to prioritise reduction strategies. Additionally, it’ll help you to identify which suppliers are leaders and which are laggards in terms of their sustainability performance.

So why aren’t more organisations concerned about a higher – and deeper – level of accuracy? At a time when sustainability teams are trying to strike a balance between regulatory reporting and compliance, it makes absolute sense to collaborate with product teams in the business in order to ensure that the products being created are as sustainable and as circular as possible. Doing so will also generate efficiencies within the sustainability process, avoiding wasted resources and allowing for greater speed. But how do you achieve it?

The answer is straightforward: Combine LCAs with scope 3 reporting. Putting together a granular LCA is a time-consuming and intensive process. So is figuring out where the data is for scope 3. Despite this, many businesses still separate the two. Perhaps it’s time for a rethink.

Moving away from a siloed approach

We can all agree that working together is better than working apart. At a time when regulatory demands are more stringent than ever before, customer and stakeholder expectations are heightened and sustainability reporting requirements are multiplying at an unprecedented pace, operating in siloes is not the way forward.

It’s an idea that’s very much applicable when it comes to using the same data foundation for both LCAs and scope 3 reporting. Across the product development process in any area where scope 3 is used – from product engineering to product design to product management – LCAs and PCFs are a key tool when it comes to understanding what’s going on in the product.

However, when it comes to corporate reporting, it’s often the case that different methodologies are used to analyse the same products. If different parts of the organisation are working with different types of data they are very likely to find themselves running in opposite directions when it comes to the insights they stand to gain from their reporting. By any measure, this is not a good outcome.

When considering scope 3 and product reporting at a corporate level, many organisations currently opt for a spend-based approach (i.e. taking the financial value of a purchased good or service and multiplying it by an emission factor – the amount of emissions produced per financial unit – resulting in an estimate of the emissions produced.)

However, such an approach will result in an entirely different picture from a scenario where direct purchased goods are being looked at from an LCA perspective. The likelihood is that the organisation will either end up reporting fewer emissions or too many emissions when reporting for category 1 in scope 3. The process of a spend-based approach is simply too broad and based too much on guesses and speculation, and pales in comparison to the granular analysis that an LCA is capable of.

Indeed, it’s highly likely that the insights gained at a corporate level will differ wildly from those gained by, for example, a product engineering department – due solely to the different approaches commonly in use. When it comes to scope 3, a spend-based  approach has a level of abstraction that is so high that it is essentially impossible to get a real and detailed picture of what’s going on with your product, leaving you working with nothing more than a best guess as to what kind of impact it might have.

An unnecessary risk

So what does the future look like? An organisation that works hand-in-hand with a product at all stages – from early on in design to when it’s being built and the materials are being sourced – is one primed for success. But that synergy is only possible if all parties work from the same data foundation in order to drive decisions.

In today’s reporting environment, it’s not an overreaction to suggest that failing to take a joined-up approach will lead to the failure of many corporate reduction initiatives. A disparity and a lack of consistency between departments – from procurement to product development to engineering – is a risk that’s not worth taking.

Besides the operational waste generated by a siloed approach, there are numerous other risks to consider. A lack of granularity in your scope 3 reporting may lead your organisation to spend money on entirely the wrong end of its portfolio and is also likely to drive transformation and innovation in the wrong direction, the financial and reputational consequences of which may be irreparable (from losing market position to damaging stakeholder relationships to falling behind peers and competitors.)

Ultimately, in a scenario where an LCA analysis is done with one tool and scope 3 analysis is done via a spend-based approach, the result is the same: the organisation invariably has to correct their scope 3 reporting further down the line. It might seem easier to do both separately, but separating the two processes is a mistake – one pockmarked by contradictory insights from different departments, and one that risks leaving your organisation far behind peers who have had the foresight to combine both LCA and scope 3 under the same banner.

The benefits of using an LCA approach for scope 3

When we discuss using an LCA to calculate scope 3, it makes the most sense to look at category 1: ‘Purchased goods and services.’ This category includes all upstream (i.e., cradle-to-gate) emissions from the production of products purchased or acquired by the reporting company in the reporting year. Products include both goods (tangible products) and services (intangible products).

The data granularity gained from an LCA approach is significantly better than what could be achieved by using a spend-based methodology, with some companies having seen reductions of up to 90% in their scope 3 category 1 GHG emissions as a result. Furthermore, LCA data can also be used to explore decarbonisation pathways. Using already existing LCAs and PCFs and utilising data that is significantly more precise makes by far the most sense.

The pros for using actual data for calculating scope 3 GHG inventory far outweigh the cons. It is more scientific and more accurate. It considers entire cradle-to-gate transmissions. It conforms with globally recognised standards. It enables true decarbonisation. And it offers the ability to evaluate suppliers on carbon emissions as well as price, quality and delivery. A spend-based approach – inaccurate and outdated – is simply no longer fit for purpose.

Finally, beyond the obvious risks and inefficiencies we’ve highlighted in this article, it’s worth remembering that this a decision potentially worth many multiple millions. If you’re only conducting LCAs right now but find yourself in a position where scope 3 reporting is coming very soon then you’re reading this at the right time. If you’ve already separated LCAs and scope 3 reporting, then now is very much the time for change.