Trucost Blog / 06 Aug 2010

What do LCA, input-output modelling and the Statue of David have in common?

Trucost explains why a hybrid approach of input output modeling and life cycle analysis provides the best of both worlds when it comes to measuring supply chain emissions.

I’m often asked about life cycle analysis (LCA) vs input output methodology, when measuring an organisation’s supply chain emissions. Is one better than the other?

So in response I have come up with an analogy which sums up their differences and, importantly, their synergies.

To compare the two approaches, picture yourself as a sculptor with a block of marble.

LCAs are known as a “bottom-up” approach to supply chain measurement. In sculpting terms this means you would take your block of marble and focus your sculpting on one specific area, the hand for instance. You spend a considerable amount of time on this one hand, intricately carving out each finger and finger nail. The end result is a clearly defined hand, but you have no idea what the rest of sculpture looks like… all you have is a blank block of marble, and in a majority of cases you may not have chosen the best part to focus on, as you had to guess.

Compare this then to the “top-down” approach of input/output modelling. In this instance you would take your block of marble and instead of focusing on one specific area you would loosely chisel out the whole outline and features of the body. This will give you a complete picture of what the sculpture looks like, and will identify areas where additional attention will have the greatest results, the face for example.

As you can see, there are issues with both. The LCA approach is lengthy, costly, the boundaries are hard to define and at the end of the process, you may find that you have not chosen the best place to focus your attention. The input/output model largely depends on the granularity of the model and how many sectors and economies that it represents, since this will have a large impact on the accuracy of results, which are not always as exact as an LCA.

This is why I recommend a hybrid approach.

With a hybrid approach you get the best of both worlds. Starting with an input/output model approach provides a complete understanding of your supply chain emissions. The results will then identify which suppliers to engage with. These will be the suppliers and sectors that are responsible for a majority of your supply chain emissions; experience tells us that 80% of your emissions will come from around 20% of your suppliers. This data and any other existing LCA data can then be incorporated into the existing footprint, providing you with a comprehensive environmental supply chain footprint that is both cost effective and fast to produce.

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