Value creation with life cycle assessment: an approach to contextualize the application of life cycle assessment in chemical companies to create sustainable value

Businesses have a responsibility to shareholders and other stakeholders. By establishing a direct link between sustainability and shareholder value, businesses can successfully include sustainability considerations in managerial decisions and create sustainable value. The value creation opportunities include cost reduction, risk reduction, product differentiation, and new products to address unsatisfied needs. However, the relevance of various aspects of sustainability changes from company to company depending on the context; this can involve the type of product systems, geographical scope, and related social and environmental drivers. This requires a framework and tool that can capture the complexity, yet provide holistic understanding of the interdependence of industrial systems and, more importantly, furnish sound metrics to include sustainability considerations in business decisions. This paper shows how value can be created by integrating environmental sustainability through Life Cycle Assessment in business, especially in the chemical industry and provides an implementation procedure for business value creation based on life cycle assessment. The application of life cycle assessment was contextualized to various drivers and situations of chemical companies with the help of sustainable value framework. Case studies from three companies were used to illustrate value creation by integrating environmental sustainability through life cycle assessment. A procedure was presented to translate life cycle assessment insights into value creation opportunities. This article provides a better understanding of employing life cycle assessment by business managers in day-to-day business decisions to create value. (C) 2016 Elsevier Ltd. All rights reserved.