A label for more transparency

For farmers, what’s left of the proceeds from harvesting what they have produced through sheer physical effort is barely enough for them to feed themselves and their families. Working conditions in low-wage countries such as China, Bangladesh, India or Cambodia tend to be dreadful.

Press reports and TV documentaries covering the systematic exploitation of workers in these and many other countries, as well as on the fates of individuals, are leaving consumers with more than just a bad taste in their mouths. This media presence is having the desired effect: more and more consumers in higher-wage countries are choosing to pay significantly higher prices for fair trade products.

The Berlin-based Forum Fairer Handel reported that in Germany alone, sales in this market rose by 21 percent to 784 million euros from 2012 to 2013. But even though shoppers are becoming ever more discerning, we as consumers are still without a reliable, comprehensible appraisal system with succinct labeling. In the opaque world of middlemen, even retailers don’t always know the full story of where their products come from, who produced them and under what conditions.

It’s at this point that the term “sustainability” enters the discussion – sustainability in terms of products and how they are developed. German speakers first encountered this term in the context of forestry and watched as it was adopted by advertisers and the public at large. For many companies, sustainability has come to be nothing more than a strand of marketing strategy. But in reality, sustainability embodies a wider concept that combines commercial success with social, ecological and economic considerations.

Despite the variety of definitions of sustainability that get bandied around, they all have one thing in common. “It’s all about sustaining a system or particular features of a system – be it the production capacity of a given social system or of a life-sustaining ecological system. The idea is always to preserve something for the benefit of future generations,” explains Dr. Bernd Klauer from the Helmholz Centre for Environmental Research – UFZ in his 1999 book “What is sustainability?” (“Was ist Nachaltigkeit?”).

It is against this backdrop that Matthias Fischer and the rest of the Life Cycle Engineering department at the Fraunhofer Institute for Building Physics IBP have been working on methods of assessing sustainability for the past 25 years. The researchers have made it their mission to develop reliable, universally usable assessment systems. “Life Cycle Assessments (LCAs) and Life Cycle Costings (LCCs) have long since established themselves as ways of examining products from an ecological and economic perspective while also taking the value chain into account,” says Sarah Schneider from the Life Cycle Engineering department.

These internationally standardized methods are used in research as well as in industry. In accordance with ISOs 14040 and 14044, an LCA is an internationally standardized method of outlining the environmental impact a product or product system is likely to have over its entire life cycle. This involves getting a complete picture of emissions and resources relating to a product’s value chain and calculating the potential environmental impact according to various categories such as the product’s global-warming potential. An LCC, meanwhile, considers payment flows throughout the life of a product system or a service and discounts them in line with when they occur. In the building sector, Type III Environmental Product Declarations (EPDs ) according to ISO 14025 are used to compile information about a building product’s life cycle and LCA values along with any test results, for example to allow a detailed analysis of interior emissions from volatile organic compounds, or VOCs. LCA and LCC methods make it possible to quantify sustainability.

The Foodprint – sustainability in what we eat
Discerning shoppers are paying increasing attention to the quality and origin of the foods they are buying. There is a wealth of eco-certification labels out there to help to orient consumers – from Biokreis, Bioland, Naturland and Naturkind in and around Germany, to USDA Organic in the USA and Demeter worldwide. Supermarket chains are also responding to growing demand for fair-trade and organic produce by developing their own labels. But consumer confidence is shaken again and again by one food scandal or another. What is more, environmental organizations are constantly uncovering instances of “greenwashing,” where a company has misused a label to promote itself as eco-friendly. Customers meanwhile are left scratching their heads and asking themselves whom they can trust.

Back in the Life Cycle Engineering department, researchers are working on establishing a database of environmentally relevant criteria for foods, which they hope will enable supermarkets and their suppliers to use scientific calculations when deciding what to sell. What is more, customers could use the database’s impartial information to help them make informed purchasing decisions. This calls for the findings of food-related LCAs to be processed and presented in an understandable, no-nonsense and uniform way.

The first step is to use LCA methods to compile datasets for a great many of the most important foods. These datasets highlight the ecological effects of each food – for instance emissions – including its full upstream chain. This ensures that all stakeholders are considered; from farmers, logistics and processing to packaging, retailers and customers. Where necessary, the researchers supplement this purely environmental information with additional qualitative assessment characteristics or socioeconomic criteria. Such information can be used to generate a helpful basis for supermarkets and shoppers to make decisions and understand how the upstream chain, supermarkets and consumers are linked.

In pursuit of these goals, the researchers carried out a survey of existing national as well as international databases and apps. Their findings indicated that not only do databases and apps already exist for certain countries, but they are also a hot research topic. But since data collection and processing across the various databases is inhomogeneous and inconsistent, the data cannot be consolidated without further effort. Building on these findings, the researchers conducted some market analysis by interviewing national and international stakeholders. They did discover that there is a strong desire to improve on the current state of non-transparent, inconsistent and insufficient data collection. However, the only way to really convince the various stakeholders that an assessment is worthwhile is to create a nuanced display of LCA data processed according to audience and demand.

“Establishing a stakeholder interface and a database containing LCA-relevant information are the next steps after this market analysis,” says Christian Peter Brandstetter from the Materials and Product Systems group. Ultimately, what would then exist would be a database that catalogs the environmental impact of various foods, offering supermarkets and their customers a roadmap for purchasing decisions. Then, in much the same way that EPD s are used in the building sector, food manufacturers could be encouraged to reveal the impact their products have on the environment, which would in turn increase the store of specific data. “This would also mean consumers could be given access to information on the environmental impact of what they eat, perhaps in the form of an app – naturally an interactive one geared to consumers – which would provide supermarket shoppers with all the relevant information about the products on the shelves. We know there’s no space for all that information on the packaging, but it would be no problem at all to do it with QR codes,” continues Brandstetter. Ultimately, this would give customers a breakdown of the ecological cost of what’s in their shopping cart. It would even be possible to adapt supermarket reward schemes to offer customers food vouchers when the items they purchase come in below an agreed emissions threshold. Such schemes would have to be tested within the project to prevent potential rebound effects, whereby increased consumption or use cancels out improved efficiency, from making a mockery of sustainability.

Social footprint coming on in leaps and bounds
Responsible use of resources, environmentally sound production, fair treatment of workers and other aspects of sustainability are also playing an increasing role in other sectors, such as the textile industry and IT. With the exception of respected and unambiguous labels such as Fair Trade, little attention is currently paid to the social implications of manufacturing, using and disposing of products. But now the tide is turning. Prompted by the ever growing influence of social data on the purchasing decisions of shoppers and companies, the Life Cycle Engineering department is one of the first research teams in the world to quantitatively model social aspects along the entire value chain. Examining and evaluating these data over a product’s entire life cycle calls for an approach that can factor in precisely these social indicators – the Life Cycle Working Environment, or the LCWE approach for short. Based on process-related data drawn from LCAs, this approach considers how materials and energy sources are used while also looking at economic information such as added value and socioeconomic information such as seconds worked. All this is used to compile a social profile for each process step. Thus far, the LCWE approach’s workplace-related indicators comprise the total work time for each process step and product, the subdivision of work time into defined qualification levels, the proportion of female labor per process stage and product, and the number of related fatal and non-fatal accidents.

To ensure the LCWE approach works smoothly, the researchers worked up generic data for the aforementioned indicators and integrated these data into the GaBi LCA database . Testing the applicability of both the approach and the data stored in the database has been the subject of several studies carried out to date. Since the LCWE approach is not limited to individual industrial sectors, it is ideal for analyzing social aspects along the entire value chain.

Together with partners from research, industry and commerce, scientists from the Life Cycle Engineering department are pursuing the goal of further developing their approach into a targeted form of workplace-related social analysis along the value chain.

Plans are in place for the indicators mentioned above to be supplemented by, checked against and even updated according to others including child labor, workplace safety and minimum wage. And using these datasets, companies will then be able to analyze their products in terms of social indicators, present a quantitative and hence transparent picture of each product, and communicate that information to their customers. This kind of analysis enables companies to find out, for instance, to what degree their product depends on skilled labor.

“Another priority is to put the LCWE approach through a benefit analysis. On the one hand, this involves companies asking internal questions: To what extent will LCWE help us achieve transparency in presenting social factors in the value chain? How does my social profile stack up against the sector average or that of my competitors?” explains IBP researcher Sarah Homolka. “On the other hand, we must also consider whether there is potential for companies to use LCWE for marketing purposes; in the best-case scenario, it could even be transformed into a social label – the ‘product social footprint’ – along the lines of the 'product environmental footprint'.”

Industry is showing a great deal of interest in the work the researchers are doing. Even though the sheer complexity of value and supplier chains makes it difficult to consider the social aspects of products, companies are paying them more and more attention. Encouraged by this situation, Matthias Fischer and his team will continue to develop their approach. The next step will be to demonstrate the applicability of the LCWE approach in a variety of sectors. And starting this fall, the researchers will collaborate with a partner form the textile industry to conduct a product-based analysis of social aspects using one of that sector’s products.

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