What exactly is social life cycle assessment?

Social LCA is similar to environmental LCA: it evaluates the impacts of a product, process or service across its life cycle, or of a company across its value chain. And, as with environmental LCA, the products and companies involved can generate a range of impacts in each of the life cycle stages. The focus is different, however: with environmental LCA, we look at impacts such as climate change, land use change and ecotoxicity, and with social LCA we may look at impacts such as child labor, health and safety and accessibility for the end user.

In social LCA, we want to draw a cause-effect pathway between a company’s actions and the impact on a stakeholder. To do that, we want to collect information on the risks a company has of causing negative social impact by operating in a specific sector or country and on their actions to mitigate negative social impacts (and uphold positive impacts).

Where do environmental and social LCA differ?

Although the main concept is very similar, social LCA and environmental LCA are not exactly the same. Social data is often qualitative, for instance, rather than information measuring the performance of the company. Furthermore, social impact data is more often used to assess the situation in its context.

Social impacts are often not linear, unlike environmental impacts. For example, double the carbon emissions cause twice as much pollution, whereas double the incidents of child labor are just as negative – every incident of child labor proves that there is a system in place that allows child labor to occur, and these systems should not exist at all. That’s why social LCA uses qualitative information as the basis for measurement, working with reference scales to determine where a situation ranks, from unacceptable to best-in-class.

Finally, in social LCA, the context in which the value chain operation occurs is often more important than the process itself. For example, the same type of mine may have similar environmental impacts, regardless of whether the mine is located in the Democratic Republic of Congo or in Belgium. But the social impacts may be completely different.

Why social LCA is important

Social LCA and social impact assessments can help companies take accountability for the effects of their value chain activities on people around the world, and for any human rights infringements that occur. This is becoming increasingly relevant for compliance, since the European Commission urges businesses to evaluate, remediate and report on social issues through directives such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).

Beyond the legal reasons, there is a call from consumers to provide transparency about product origins and impacts. If social issues are uncovered in parts of the value chain which previously remained invisible to consumers’ eyes, that may lead to severe reputational damage for companies.

Another reason to focus on social LCA is that it may open up investment opportunities from financial institutions through a ‘do-no-significant-harm’ clause of the EU Taxonomy and other green investment evaluations.

The four steps of social life cycle assessment

The steps of social LCA follow the basic concepts of environmental LCA: goal and scope, inventory, impact assessment and interpretation.

1. Goal and scope

In this step, we describe the reasons for initiating the study and define the intended audience and the application of the results. This dictates the type of assessment and its scope.

Now, the scope needs to be described further: what is the subject of the study (a product, part of the value chain, supply chain, a single topic, a type of stakeholder etc.) and, therefore, what are the boundaries of the assessment?

Most important at this stage is mapping the value chain and providing detail about the context (location, country, type of supplier/material etc.) and relevant stakeholders. It is crucial to make this as accurate as possible, since social issues are so context-specific.

2. Inventory

In this step, we define the social topics that the assessment will focus on and collect data at the required level. In the table below, you can see potential stakeholders and a list of social topics that are relevant to them. These social topics are the equivalent of impact categories in an environmental LCA.

This step also includes a materiality assessment which determines the most relevant social topics, based either on the goal and scope or on a hotspot tool. It is tempting to want to look at a long list of social topics, but that is often unfeasible. This assessment narrows the number of topics down to the most relevant ones. Combining the material topics with the value chain map and relevant stakeholders determined earlier provides preliminary focus areas for the next step.

At this stage, the practitioner will choose a type of impact assessment method (Type 1 or Type 2) to determine the type of data to collect. All data points used must also be assessed for data quality.

3. Impact assessment

There are two main impact assessment approaches in the field of social LCA:

• Type 1 follows a reference scale approach, where data is gathered on the level of performance indicators (specified on a defined 5-point scale) for each topic. The result is a semi-quantitative score.
• Type 2 follows an impact pathway approach, which uses a predefined impact pathway to characterize data inputs into a final impact score. This is usually represented in a single metric such as medium-risk hours. The result is quantitative.

A reference scale is built through understanding how a company’s activities impact a stakeholder group and defining ways to measure that impact. For example, a company employing workers in a mine needs to ensure that their workers’ health and safety is protected (a material social topic). Health and safety can be understood through indicators such as management practices and through the workers’ access to personal protective equipment. From there, we need to think about what situations would be unacceptable and which would be a best-in-class situation.

4. Interpretation

In this step, the original intention of the assessment is evaluated and results are applied to the defined use case. During this step, it’s also important to analyze the main insights, data quality, data gaps, improvement opportunities and limitations of the study.

Often, the process of striving to do a thorough analysis is more important than the actual results. For example, mapping the value chain may provide insight into where specific materials are sourced, and identifying data gaps may show a lack of transparency in the value chain. As LCA consultants, we emphasize iterating the process until the data quality supports the intended goal.

New developments in social life cycle assessment

ISO 14075, a novel standard, focuses on understanding and managing the social dimensions of product life cycles. The standard is designed to complement traditional environmental LCA approaches with a crucial social dimension through a shared framework of terminology and requirements. This attempts to bridge the gap between social and environmental LCA and reduces the idea that people need to do one or the other.

Other private initiatives are also doing valuable work. The Social Product Declaration builds on the Environmental Product Declaration, a common standard in the construction sector. SPDs can be used to communicate social impact information about a product, and may grow into a powerful tool for sustainable procurement and supply chain management.

At the EU level, there is a push to start reporting on more holistic indicators, as shown in Horizon2020 projects such as Orienting. This project also developed a comprehensive life cycle sustainability assessment, integrating environmental, social, economic, circularity and other aspects of sustainability.

Doing social life cycle assessment in SimaPro

Although designed for the very quantitative environmental LCAs, SimaPro can also facilitate social impact assessment. In SimaPro Craft, you can do sector hotspot assessments using the Social Hotspots Database developed by NewEarth. The database uses an input-output approach to screen high-risk sectors and countries, based on statistics and publicly available information. When done to complement an environmental LCA, this gives additional insights into the impacts on stakeholders.

Would you like a partner for a social assessment?

Are you looking for expert guidance or advanced analysis? Our consulting services are here to help. Using the Social Value Assessment methodology, we can help you understand your impacts and improvement opportunities at a product and value chain level. This will bring you closer to meeting your sustainability goals. Discover our LCA software solutions and contact our experts to find out more about what we do in this field and how we can help.