Why Life Cycle Assessment?
“Do you have an LCA?”. This is one of the most common questions directed at impact-focused startups by sustainability or impact focused investors, VCs, or brands. What do we mean by “impact focused” startup? Perhaps you have developed a novel material that replaces fossil-based plastics, maybe you have created a software solution to enable ‘circular’ retail, or innovated a new recycling process for waste textiles. These are all examples of startup companies with sustainability or impact reduction as a key part of their value proposition.
If you are claiming some sort of beneficial effect on the environment (such as a reduction in greenhouse gas emissions), then the gold standard of evidence to back up these claims is a “Life Cycle Assessment”, or LCA – a rigorous, science based analysis of the environmental impact of a product, process or service.
We previously covered the basics of what an LCA, or life cycle assessment actually is, and what it can do. But how would you, as an impact-focused startup, actually go about getting an LCA study done? Is it better to do it yourself, use a software tool, or a hire a company or consultant to perform one for you? In this article, we will attempt to answer these questions and give some useful advice for impact focused startups.
Life Cycle Assessment Options For Impact-Focused Startups
There are, of course, a number of possibilities for conducting or commissioning an LCA study. Here are the 5 key approaches that you could take:
- Niche consultancies: Hiring a niche consultancy that specialises in conducting LCAs can be a pretty good option for impact-focused startups. These consultancies often have expertise in specific industries, sectors or product types, and can provide a more personalized approach for smaller companies. This can be especially beneficial for startups that have a specific need or want or want to focus on a particular aspect of the LCA. For example, a niche consultancy may focus on innovations and companies in the fashion and textiles sector, or specialise entirely in working with start-ups. A niche consultancy may also specialise in a specific approach or type of LCA study. However, niche consultancies may not have the resources to handle more complex or diverse projects. Budget wise, they are a middle ground between the universities and large corporate consultancies.
- Larger corporate consultancies: Larger corporate consultancies may have a more broad range of expertise and experience, and can be a good option for startups that have a more complex or diverse set of needs and with larger budgets. Typically they might have many staff and office across different continents or countries. However, a key drawback for startups is that larger corporate consultancies may be more expensive and may not provide the same level of personalized attention as a smaller, niche consultancy. Additionally, they may not have the same level of specialisation or experience with impact-focused startups, and may not fully understand their unique challenges and needs.
- SaaS tools: There are a growing number of Software-as-a-Service (SaaS) tools for carbon footprint and performing ‘LCA-like’ analysis. These tools can be a cheap option for startups that do not have the expertise or resources to conduct an LCA in-house or hire an outside consultant. They can also be useful for startups that want to automate the process and make it easier to track and manage their data. However, these SaaS tools may not be as accurate or comprehensive as other options, and they may not provide the same level of support and guidance. Additionally, some startups may find that they miss the human touch and the guidance that comes with working with an experienced consultant. The data used by the tools may out-of-date, generic and not tailored to the specific supply chain or processes used by the startup. Although for many this might be a start, these tools are often not sufficient on their own as evidence of environmental impact, especially if public claims are being made.
- Do-it-yourself (DIY): Another option for impact-focused startups is to conduct the LCA in-house, using the same tools and software used by LCA consultants and experts. This can on the face of it seem like a cheaper option, but there are many hidden costs. This option requires a significant investment of time and resources (such as staff time, special software and data licenses) to learn how to use the tools and conduct the LCA properly. It is also important to ensure that the LCA is conducted by a qualified and experienced professional and follows recognized LCA standards (i.e. ISO 14044) and guidelines. Additionally, impact-focused startups may not have the in-house expertise or experience to conduct the LCA accurately, which could lead to inaccuracies in the results and a lack of confidence in the data. Ideally, an in-house study should be reviewed by a third party as part of an external review process, if it is to have the confidence of customers and investors.
- Universities and Research Institutes: Another option for impact-focused startups is to collaborate with a university or research institute that has expertise in conducting LCAs. In terms of budget, it may depend on who conducts the study (i.e. commissioning a master student versus a PhD student or top professor in the field will command different budgets), which will also determine the potential quality of the output. However this could be a good way to startups to connect to the forefront of academic thinking. This may be an especially suitable option if the LCA enters new or untouched areas or requires approaches being developed by the specific university or institute. However, working with universities or research institutes may be slower and less flexible compared to other options and may not be tailored to the specific needs of the impact-focused startup. They may take a very academic approach, lack the experience in communicating bottom line details and actions to non-technical audiences, and may not be used to working with entrepreneurs.
Which Option Is Best For a Startup?
The best choice will depend on your specific needs and resources that you have available, and more importantly, at what stage in the scale-up-journey you are at – naturally, an earlier stage company has fewer resources and a smaller budget.
Niche consultancies may provide a more personalized approach lower price point, while larger corporate consultancies may have more resources available with a higher price point. Therefore, the latter may be better for an established company with many employees and departments, while niche consultancies may be better for companies between the Seed and Series A fundraising stages. SaaS tools can be cheap and convenient, but they may not be accurate, comprehensive or reliable. They could be used by very early stage companies around the seed stage or earlier, but ideally shouldn’t be relied upon long term, especially if evidence is required for larger scale fundraising efforts.
Doing it yourself may seem like a cheaper option, but it may actually require a significant investment of time and resources. This could be done at any stage, but only if the required expertise already lies in-house. Universities and research institutes can provide access to the state-of-the-art science and academic approaches, but the process may be slower and less flexible – this is more appropriate for slightly later stage startups.
Whatever the choice, performing an LCA in general is an extremely useful exercise for impact-focused startups and is key to unlocking further conversations with similarly-minded investors, VCs and potential customers.
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Author: Dr. Ashley Holding
Principal Consultant @ Circuvate
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Circuvate, specialises in offering Life Cycle Assessment (LCA) services to impact focused startups. We are experts in sustainable innovation, materials and the circular economy. We typically start with a preliminary impact study, and offer a range of extension packages to enable add-ons to the study as your startup grows. Get in touch to see how we can help you.