Life cycle assessment as a tool for improving service industry sustainability SU S
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IMAGE COURTESY OF CAN STOCK PHOTO/PAUL FLEET
Scott O. Shrake, Cassandra L. Thiel, Amy E. Landis, and Melissa M. Bilec
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HOSPITAL COURTESY OF STOCK.XCHNG/ROBERT LINDER
fundamental principle of business states that the primary purpose of a corporation is to generate a profit for its stakeholders. Historical belief posited that this profit must come at the expense of the environment and that environmental health and corporate profitability are mutually exclusive principles. More recently however, the ideas of corporate citizenship and sustainable development have demonstrated that corporations have a larger role than simply generating a profit. Some corporations have begun to evolve by including the principles of sustainable development and the triple bottom line into their growth and development plans. Promoting social well-being, minimizing environmental degradation, as well as maximizing economic profitability, is quickly becoming common practice. Often when people think of a corporation’s contributions to environmental degradation, visions of end-of-pipe effluents from manufacturing facilities or environmental damage from resource extraction come to mind. These direct, easily visible emissions sources are simple to conceptualize, and are, in theory, easy to account for and measure. Rarely do people picture a hospital operating room or an engineering consulting firm as a source of significant impact; however, Rosenblum has shown that the activities of service industries result in considerable environmental loadings. The impacts of service industries have often been underrepresented in part due to the complexity associated with mapping the expansiveness of the service economy. Unlike manufacturing, there typically are not clearly visible point source emissions, and indirect or hidden Digital Object Identifier 10.1109/MPOT.2011.943055 Date of publication: 12 January 2012
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environmental impacts are overlooked and deemed cleaner by comparison. For example, although hospitals are pictured as pristine and sterile environments, they are huge consumers of electricity, and providing their service results in massive waste streams. According to the Bureau of Economic Analysis, service industries accounted for about 76% of the United States gross domestic product (GDP) in 2010. This number is expected to grow as U.S. corporations continue to move manufacturing to countries with lower costs of production or less stringent environmental regulations. With services accounting for so much of the GDP, and the projected growth of service industries, there is a marked need to clearly define and map all of the actions of a service industry. This will enable a better understanding of the environmental impacts of the industry and can be used to develop strategies and best practices to improve the sustainability of the corporations involved. There are currently a number of methods that have been proposed to evaluate the impacts of service industries. Some of these methods include the Greenhouse Gas Protocol from the World Resource Institute, the Economic InputOutput Life Cycle Assessment (EIO-LCA) from Carnegie Mellon University, and Publicly Available Specification 2050 (PAS 2050) from the British Standards Institute. Each of these methods has potential benefits as well as limitations. Some of the tools forgo depth and data quality for the sake of time. Other tools have issues with high levels of aggregation, resulting in increased uncertainty. Finally, some of the tools are limited in the way they present their results— some focus strictly on carbon footprinting (CF), while others expand results to include additional impacts to the environment beyond greenhouse gas releases. The hybrid life cycle assessment (LCA) provides a method to tackle some of the shortcomings mentioned above.
standardize what products are labeled as “green” or environmentally friendly, but LCAs can also reveal the effects of processes, products, or services and provide guidance in improvements at the different stages of development.
With services accounting for so much of the GDP, and the projected growth of service industries, there is a marked need to clearly define and map all of the actions of a service industry.
Several organizations have established guidelines for performing detailed LCAs, including the U.S. Environmental Protection Agency (EPA), the International Organization for Standardization (ISO), and the American National Standards Institute (ANSI). According to ISO 14040, the standard developed by the ISO, an LCA is conducted in four stages. The initial stage establishes the goal and scope of the assessment, including de-
termining the boundaries for what will be included in the LCA, as well as the establishing the functional unit in order to standardize the results and allow for comparison. Typically, a functional unit is a unit of mass, volume, or energy that describes the function of the product or process being evaluated. For example, if conducting an analysis between a compact fluorescent light bulb and a traditional incandescent light bulb, the functional unit would likely be lumens or foot-candles. The second stage is the life cycle inventory (LCI). The LCI stage includes the collection of the raw data for the inputs and outputs from the system. In the third stage, called life cycle impact assessment (LCIA), the environmental impacts are calculated from the data collected in the LCI stage. The inventory in this stage is aggregated into impact categories such as global warming, eutrophication (a form of degradation in water quality due to an abundance of nutrients, often associated with fertilizer run-off), or ozone depletion. This is done using predetermined characterization factors to relate different
Life cycle assessment LCA is a scientific tool used to quantify the environmental impacts associated with a given process or product. Traditionally, LCA provides a method to trace a product from its raw materials extraction (i.e., cradle) through its disposal or end of life (i.e., grave). However, it does not necessarily have to include every stage of production. LCA can help JANUARY/FEBRUARY 2012
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Data Category
Junilla recently proposed and utilized a hybrid LCA approach to assess the impacts of select banking and consulting firms within the United States and Europe.
Subcategories Consulting Services
Purchased Services
Additional Services
Assessment framework
Building Premises
Travel and Transportation
Billable Employee Travel Commuter Travel
Engineering Consulting Firm
Office Equipment Equipment Field Equipment
Office Supplies
Fig. 1 Example of data categories for the analysis of an engineering consulting firm.
impacts in terms of a reference unit, e.g., CO2 equivalents for global warming potential. The interpretation stage is the fourth stage, and its purpose is to analyze the assessment as a whole and to expose the best areas for improvement. There are three primary LCA methods: process, economic input-output, and hybrid. Traditional process LCA has historically been limited in its usefulness to assess service industries. This is primarily due to issues associated with data availability, setting system boundaries, and limited study time. Additionally, it is difficult to calculate the indirect emissions, also known as Scope 3 emissions, resulting from a company’s upstream and downstream value chains. These emissions have been shown to be large contributors to a service industry’s environmental profile. The final drawback associated with using process LCA is that a number of a companies’ flows come in the form of transactions with other service industries, which have no physical properties to track. It is difficult to identify the impacts associated with purchasing a dollar of another service industry—which brings into play the usefulness of EIO-LCA. EIO-LCA was developed in part to address some of the shortcomings of process LCA. EIO-LCA was developed using an economic input-output model and includes environmental data to determine the primary energy and envi12
ronmental loadings associated with producing a product. The EIO-LCA tool developed at Carnegie Mellon University allows users to input a dollar amount spent in a particular North American Industry Classification System (NAICS) sector and see the emissions and environmental impacts from the various sectors associated with producing that LCA provides a method to trace a product from its raw materials extraction (i.e., cradle) through its disposal or end of life (i.e., grave). However, it does not necessarily have to include every stage of production.
product. This lends itself to assessing service industries where not all inputs have direct mass or energy values. EIOLCA does have some limitations in assessing services due to its high levels of data aggregation and potential for uncertainty. Often EIO-LCA is used as a high-level screening tool. Hybrid LCA is a combination of process and EIO-LCA. As a tool, it accentuates the strengths of both process and input-output-based LCA approaches and reduces some of the limitation issues associated with both. Hybrid LCA has the flexibility in the inventory stage of LCA to aid in the setting of the system boundaries and the collection of data. Seppo
One of the inherent difficulties in developing a method to assess the environmental impacts of service industries is the diversity in the scope of services provided by service sector companies. For example, the major environmental loadings from a hospital are likely to be far different from that of a consulting firm, which are both likely to be different from a dry cleaning service. This makes it difficult to create a tool that can be used by all service companies to evaluate the impacts associated with their service provided. However, the assessment framework presented below is tailored to be a high level framework that is adjustable for the intricacies of each service. Each of these categories consists of data collected for one fiscal year, as that is the functional unit as proposed by Junilla.
Hybrid LCA data collection categories The primary data needed for the assessment consists of energy usage, supply and material usage, customer and employee commuter habits, and company accounting data. The framework developed organizes the data collected into five primary categories: • Purchased services: The purchased service category consists of data collected from accounting entries where material goods data is not applicable. For example, consulting, accounting, legal services, or insurance. It also consists of services such as shipping, equipment rentals, and vehicle and building repairs or maintenance. • Building premises: The building premises category consists of all waste, energy, and water use at the site of the service provided. This includes all impacts directly related to the facility’s daily operations. Energy used to regulate the temperature of buildings, electricity used to power equipment, water, and wastewater treatment, as well as waste disposal services, should be included. This data can be primarily collected through energy audits, waste audits, utility invoices, as well as architectural drawings. • Travel and transportation: The travel and transportation category consist of all business travel, employee commuting, and, if applicable, consumer IEEE POTENTIALS
Engineering consulting firm results The primary data needed for the assessment consists of energy usage, supply and material usage, customer and employee commuter habits, and company accounting data.
firm, of which purchased services, travel and transportation, and equipment categories are further broken down into subcategories.
Application of framework and results This framework has been used to evaluate a civil engineering consulting firm, and it is currently being used to assess the impacts of a large hospital at the University of Pittsburgh. The engineering firm consists of 80 full-time employees with limited consumer transportation to the building premises, whereas the hospital employs hundreds of staff members and serves consumers who must travel to a central location to purchase the services provided. The potential for evaluating both of these project scales illustrates the flexibility of the framework mentioned above.
Data Category
Collection Method
Subcategories
Purchased Services
Hospital Financial Records
Consulting Services
IO
Electricity
IO
Fuel Source
IO
Water
IO
Energy and Waste Audit Building Premises Hospital Utility Use
Travel and Transportation
Hospital Staff and Patient Survey Records
Equipment Purchase Orders
Vehicle Type
P
Distance
P
Transportation
P
Materials and Supplies IO
The evaluation of the engineering firm consisted of two months of on-site data collection. This included the collection of accounting records, waste and energy audit data, personnel workplace and commuter behavior, and utility data. The personnel workplace behavior data included information regarding computer usage and waste disposal habits. The collection and analyses of these data sources resulted in a number of valuable findings, some of which are discussed below. The energy audit revealed that employee workstations were accounting for nearly 35% of the total 183,880 kWh of electricity consumed by the company that year. One workstation alone consumed nearly 250 kWh per month, or about 2% of the total monthly electric usage for the building. Also, employees with the same job responsibilities and working hours had vast differences in electrical consumption at their workstations. For example, two employees with the same responsibilities used 25 kWhs and 2.6 kWhs of electricity in the same week, even though both were in the field for the duration of the week. The reason for the discrepancy was that the first employee had his computer set to never use a standby power mode,
Hospital
travel to the site of services provided. This data can be collected from a number of sources including mileage logs, accounting records, as well as employee or consumer surveys. It is important to collect data on the frequency as well as mode of transportation used (public bus, personal automobile, commuter airplane, bike, and so on.) • Equipment: Equipment consists of all equipment needed for daily operations. This typically varies substantially between different service industries but should include company vehicles, computers, machines, lab equipment, printers, and all other electricity-using devices. This data can be collected from accounting records as well as product invoices. • Office supplies: This category includes all items typically used by administrative or support staff, such as paper products, envelopes, and writing utensils. This data can also be collected primarily through bookkeeping records and product invoices. The above five categories form the main framework for the basic data needs of the hybrid LCA analysis. Each of the five categories can be further divided into smaller subcategories to fit the special needs of the service being assessed. For example, Fig. 1 shows the categories used to asses an engineering consulting
Treatment
IO
Disposal
P
P Process IO Input-Output
Office Supplies
Fig. 2 Data needs and assessment methods for hospital analysis.
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whereas the other employee powered down his workstation prior to leaving for field work. Finally, several employees were using as much or more electricity when they were out of the office, as when they were in the office as they were not enabling power-saving settings on their workstations. In response to this study, a companywide initiative focused on educating employees in power savings features of computers and general energy awareness. This program has since resulted in a 15–20% reduction of electric usage in off-hour and weekend loadings. The analysis of the waste audit data revealed two major findings. As an engineering firm, the primary waste source was paper or cardboard, and therefore nearly 85% of all waste produced (by volume) was recyclable. The other major finding was that although the employees were placing the majority of recyclable materials into recycling receptacles, the night cleaning crew combined the waste bins and recycling bins and threw both into the municipal waste dumpster. Due to the findings, a company-wide recycling and waste reduction program was implemented. The primary goal was to eliminate as much unnecessary paper waste as possible while also diverting as much waste as possible from the municipal waste stream. Through the education of employees and custodial staff, the program replaced waste bins with recycling, and strategically placed waste bins throughout the building. This initiative decreased the waste collection frequency by 66%, and also increased the recycling rate from essentially zero to nearly 75% of total waste. As a result, the company saved about US$4,000 annually on waste removal services. Also of note are the effects of office premise location on commuting habits and the impacts of vehicle choice on energy consumption. The engineering firm is located in a northern suburb of Chicago, and the impacts of suburban sprawl can be seen in the distance of the employees’ commutes. More than 40% of employees lived at least 20 mi from the office premises, and more than 65% lived at least 11 mi away. In comparison, business travel—any travel to and from conferences or that could be billed to a client for specific projects— was 14,000 mi less than the miles traveled by employees commuting. However, the billable miles resulted in 14
In order for service industries to properly understand the environmental impacts associated with the service provided,
cation for employees on the effects of their work habits are essential for any corporation committed to lower its environmental impacts.
a holistic assessment approach,
Read more about it
such as the hybrid LCA framework,
• M. Bilec, R. Ries, S. Matthews, and A. Sharrard, “Example of a hybrid lifecycle assessment of construction processes,” J. Infrastruct. Syst., vol. 12, no. 4, pp. 207–215, 2006. • BSI, “PAS 2050:2008,” in Specification for the Assessment of the Life Cycle Greenhouse Gas Emissions of Goods and Services. United Kingdom: B.S. Institute, 2008. • Carnegie Mellon University–Green Design Institute, “Economic input-output life cycle assessment (EIO-LCA),” Pittsburgh, PA, 2002 (428) model, 2011. • A. Carballo-Penela and J. Doménech, “Managing the carbon footprint of products: the contribution of the method composed of financial statements (MC3),” Int. J. Life Cycle Assess., vol. 15, no. 9, pp. 962–969, 2010. • T.E. Graedel, “Life-cycle assessment in the service industries,” J. Indust. Ecol., vol. 1, no. 4, pp. 57–70, 1997. • S. Junnila, “Alternative scenarios for managing the environmental performance of a service sector company,” J. Indust. Ecol., vol. 10, no. 4, pp. 113–131, 2006. • S. Junnila, “Environmentally significant processes of consulting, banking and facility management companies in Finland and the US,” Int. J. Life Cycle Assessment, special issue, vol. 12, pp. 18-27, 2007. • L.B. Lave, E. Cobas-Flores, C.T. Hendrickson, and F.C. McMicheal, “Using input-output analysis to estimate economy-wide discharges,” Environ. Sci. Technol., vol. 29, no. 9, pp. 420A–426A, 1995. • J. Rosenblum, A. Horvath, and C. Hendrickson, “Environmental implications of service industries,” Environ. Sci. Technol., vol. 34, no. 22, pp. 4669–4676, 2000. • S.O. Shrake, A. E. Landis, et al., “Greening the service industries: A case study of a United States engineering consulting firm,” 2011.
is essential. nearly 2,500 gallons more fuel consumed due to the efficiency of the vehicles used. This consumption resulted in an annual release of about 8.5 tons of CO2 equivalents per employee, of which, 4.3 tons were due to billable transportation. It is worth noting that the majority of the billable vehicle miles are traveled by light duty trucks or sport utility vehicles, due to the vehicles needing to be able to access construction sites. The company has since been actively including fuel economy as a major consideration when purchasing new vehicles.
Hospital approach and preliminary results The assessment of the hospital is still in progress and data collection is ongoing. Figure 2 demonstrates the data needs associated with conducting this assessment as well as the LCA method used to determine the impacts associated with each. The greater complexity of this system requires different techniques to collect and assess the data. The services provided by the hospital are different in scope and scale. This research is still in its preliminary stages, though it is predicted that the impacts of waste disposal and material purchases will be more significant in comparison to on-site energy consumption and transportation, the categories which dominated the impacts of the engineering firm.
Conclusion As sustainable development remains a leading global concern, the need for corporations to expand their focus beyond simply being producers of profit has never been greater. Service industries are massive generators of wealth but also produce large environmental loadings. In order for service industries to properly understand the environmental impacts associated with the service provided, a holistic assessment approach, such as the hybrid LCA framework presented above, is essential. Additionally, clear and decisive growth and management plans, as well as edu-
About the authors Scott O. Shrake (
[email protected]) earned his M.S. degree in civil and environmental engineering from the University of Pittsburgh Sustainability and Green Design Group in 2010. Currently, he is pursuing his Ph.D. in civil and environmental engineering, also at the University of Pittsburgh. He is IEEE POTENTIALS
supported by the National Science Foundation Integrative Graduate Education and Research Traineeship. Cassandra L. Thiel (
[email protected]) earned her B.S. degree in civil engineering from Michigan Technological University in 2009. Currently, she is pursuing her Ph.D. in civil and environmental engineering with a focus on sustainable health care from the University of Pittsburgh. She is supported by the National Science Foundation Integra-
tive Graduate Education and Research Traineeship. Amy E. Landis (
[email protected]. edu) is an assistant professor at the University of Pittsburgh in the Department of Civil and Environmental Engineering. Her research focuses on sustainability and green design, biobased production, and life cycle assessment. Melissa M. Bilec (
[email protected]) is an assistant professor in the University of Pittsburgh Swanson School of Engineer-
ing’s Department of Civil and Environmental Engineering, where she studies and teaches engineering issues related to sustainability, green design, and construction. She translates her work in these areas—as well as that of other Pittsburgh sustainable engineers—into student projects as the assistant director of education outreach in the Mascaro Center for Sustainable Innovation, the Univerversity of Pittsburgh’s center for green design.
Gamesman solutions Solution 1: 1) Fill the 3 L container with water. 2) Transfer all of the water from the 3 L container to the 5 L container. 3) Fill the 3 L container and transfer water from the 3 L to the 5 L until it is full. There is 1 L of water left in the 3 L container. 4) Empty out the 5 L container and pour the contents of the 3 L container into the 5 L container. 5) Fill the 3 L container and pour it into the 5 L container. There are now 4 L of water in the 5 L container! Alternatively, if the containers have halfway marks, you could fill each container halfway and combine them to obtain 1.5L 1 2.5L 5 4L.
Solution 2: To deliver a payload a maximum distance, the strategy is to have all the trucks drive 50 mi, then have half the trucks give up their fuel to the other half of the trucks, so that those trucks can travel with a full tank. The last truck will arrive at the destination with an empty tank. If repeated for 64 trucks, this gives: 64 trucks (50 mi) S 32 trucks (100 mi) S 16 trucks (150 mi) S 8 trucks (200 mi) S 4 trucks (250 mi) S 2 trucks (300 mi) S 1 truck (400 mi). Extended to n trucks, one could use the relation: maximum distance 5
range * 2 log2 1 number of trucks 2 1 range
Solution 3: 1) RE and H&C 2) RE 3) H&C
Digital Object Identifier 10.1109/MPOT.2011.943485 Date of publication: 12 January 2012
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Student 3 needs to research the same topic as exactly one other student. If student 3 researches Renewable Energy, then he is researching the same topic as both student 1 and student 2. Therefore, student 3 must research heating and cooling Systems.
Solution 4: 1) Toggle the first switch and wait for 15 min. 2) After 15 min you toggle the same switch so that the corresponding lamp goes off. 3) Now you toggle another key and you go upstairs into the room. One of the lamps is turned on which is connected to the second switch. The other two lamps are off but one of them is warmer which corresponds to the first switch and the other lamp is controlled via the third switch that we didn’t touch.
Solution 5: You should switch. Though it is counterintuitive, the odds are not 50/50. Provided that the host knows what is behind each door, the probability that your initial choice is correct is only 1/3. The following table of possibilities will help: Door 1 Goat Goat Car
Door 2 Goat Car Goat
Door 3 Car Goat Goat
Your initial choice only has a 33% chance of being correct, and this doesn’t change when the game show host opens his door. Because he knowingly opens a door behind which is a goat, two-thirds of the time you will be correct if you switch doors.
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