Due diligence: using Life Cycle Assessment (LCA)

Due diligence" is an expression that is increasingly in the news, in the context of ongoing legal proceedings or in the context of draft agreements or regulations on a European and global scale.

But do you really know what is behind this expression? How can you ensure that you comply with this due diligence? And how can life cycle assessment help you? 
 

The duty diligence in brief
 

A little background
 

Ten years ago, on April 24, 2013, 1135 people perished in the collapse of the Rana Plaza in Bangladesh. This building housed garment factories for various Western clothing brands. This date marks the beginning of an awareness and a crying need to create a regime of responsibility of multinational companies towards their subsidiaries and their subcontractors.

Since then, the term "due diligence" has become a general principle in the political and economic spheres, which consists in making companies responsible for preventing human and environmental tragedies.

In French law

In 2017, France was one of the first states to adopt a duty of care law. Since then, large companies (with more than 5,000 employees in France) must publish a vigilance plan with regard to the risks of violations of "human rights and fundamental freedoms, the health and safety of people and the environment" throughout their value chains.

This vigilance plan must include:
 

• A mapping of social and environmental risks
•  Regular assessment procedures
•  Appropriate actions
•  A warning mechanism
•  A follow-up mechanism

Although the penalty initially provided for (up to 10 million euros) was finally removed by the Conseil constitutionnel (Constitutional Council), a company may be given formal notice and then taken to court if it does not comply with its obligations within three months of the formal notice. A dozen large French companies are currently the subject of legal proceedings.
 

Life cycle assessment (LCA): a tool to meet the requirements of the duty of care
 

How can we ensure that social and environmental risks are identified and prevented throughout a product's value chain, when each of the product's components may go through several stages of transformation in a multitude of countries?

It is in this context that a life cycle approach becomes essential. Social and environmental LCAs make it possible to identify, assess and control social and environmental impacts and risks throughout the product life cycle.

A holistic approach...

The fundamental principle of life cycle assessments, whether social or environmental, lies in a 360° approach that takes into account

    All the components of the product
    On all the stages of its life cycle
    Via a multi-indicator evaluation to avoid potential impact transfers
    And by considering all stakeholders, mainly in social LCA

...to prioritize your actions

In addition to this holistic approach, social and environmental LCAs provide an assessment of impacts and risks, which is essential in the framework of the vigilance plan. They are also a tool for identifying the main contributors to these impacts (life cycle stage, component, geographical area, etc.). Based on this assessment, organizations can then prioritize their corrective actions.

LCAs are an ideal tool for establishing a vigilance plan. However, their primary objective is to improve products and services in an eco-socio-design logic. 
 

By Julien Larrenduche, Social Footprints Project Manager at EVEA