The economic dimension of sustainability: new perspectives ......ISO 15686:5; 2017 al To identify...
Transcript of The economic dimension of sustainability: new perspectives ......ISO 15686:5; 2017 al To identify...
Anna Maria FerrariDepartment of Sciences and Methods for Engineering, Reggio Emilia (Italy)
The economic dimension of sustainability: new perspectives from a ceramic tile manufacturing context
Davide Settembre BlundoGruppo Ceramiche Gresmalt, Sassuolo (Italy)Project Management Office Department
Fernando Enrique Garcia MuiñaDepartment of Business Administration,Madrid (Spain)
Marco CucchiGruppo Ceramiche Gresmalt, Sassuolo (Italy)Project Management Office Department
Sonia Medina SalgadoDepartment of Business Administration,Madrid (Spain)
PRESENTATION OVERVIEW
BACKGROUND
Research Objectives
SYSTEM BOUNDARY
LCC: Comprehensive
tool CONCLUSIONS
METHODOLOGY
BACKGROUND
Circular Economy (CE)
• A regenerative economic model to overcome the currents models of growth and resources consumption (Pinheiro and Jugend, 2019)
• A radical systemic change aimed at eco-design, economy of functionality, reuse, repair, remanufacturing, and industrial symbiosis (Baldassarre et al., 2019)
NEW BUSINESS MODELSCapable of capturing the value of waste in order to maintain a constant flow of value in many different supply chains in order to reduce the depletion of resources (Bressanelli et al. 2018)
Where the waste of one company becomes the raw material of another
(Singh and Ordoñez, 2016)
BACKGROUND
effective and reliable information systems that allow them to make appropriate decisions
Being able to quantify the sustainability of the various possible options in terms of environmental, financial and social acceptability.
Intended to think of new products, production and sales systems capable of integrating more agents of the value chain in the task of maintaining the reverse circulation of resources for their less deterioration (García-Muiña et al., 2018)
Intensive in the use of energy and natural resources
LCSA = LCA + LCC + S-LCAISO
1404014044
ISO 15686
Guidelines
Complexity of environmental issues and the selection dilemma between environmental versus cost effective alternatives
LCC and SLCA, versus LCA, are lacking consensus and definition and thus broad practical implementation
Beyond separate valuation
About LCSA
Productive system (unclear system boundary definition)
Cost categories (based on a linear process)
Identifying the agents (unresolved internalization approach)
About LCC
BACKGROUND
Different modes of calculation and aggregation
LCSA = LCA + LCC + S-LCA
BACKGROUND
Research objectives
LCSA
Enviromental Domain
Economic(monetary) Domain
Social Domain
LCA
E-LCC C-LCC S-LCC
S-LCA
• Risk of double counting• Diferent time horizon• Not consider other costs
(renewable, recyclable resources, recovery of waste)
• to overcome some LCC limits offering a new approach to the economicdimension of sustainability
METHODOLOGY
SystemBoundary & time horizon
Identifyngcost (scope LCC analysis)
Comprehensive
tool
• Ceramic tile manufacturing context
• Breakdown of the costs in a supply chain perspective
• Related to circular economy practices
• ISO 15686:5 (2017) guidelines
• Internal cost perspective• Full cost philosophy
RAW MATERIALS
SUPPLY
RAW MATERIALS
LOGISTIC
GLAZES SUPPLY
GLAZES LOGISTIC
GLA
ZES
GR
IND
ING
CUTTING & SQUARING
CRADLE GATE
CER
AM
IC
BO
DY
G
RIN
DIN
G
SPR
AY
DR
YIN
G
PR
ESSI
NG
TILE
S D
RY
ING
TILE
S G
LAZI
NG
TILES FIRING
TILES SORTING &
PACKING
RETAILER /INSTALLER
CUSTOMER
TILES SALES
TILES LOGISTIC
EMISSIONSWASTE
DISPOSAL
SUPPLIER
METHODOLOGY
SYSTEM BOUNDARY
To identify the input and output flows process, forwards and backwards from a circularity approach
TIME HORIZON• To use discount rates to be applied
to cost magnitudes over time• LCC period of calculation = LCA
time horizon
RAW MATERIALS
SUPPLY
RAW MATERIALS
LOGISTIC
GLAZES SUPPLY
GLAZES LOGISTIC
CRADLE GATE
SUPPLIER
EMISSIONS
ETHODOLOGYMETHODOLOGY
GLA
ZES
GR
IND
ING
CUTTING & SQUARING
CRADLE GATE
CER
AM
IC
BO
DY
G
RIN
DIN
G
SPR
AY
DR
YIN
G
PR
ESSI
NG
TILE
S D
RY
ING
TILE
S G
LAZI
NG
TILES FIRING
EMISSIONS
DISPOSAL
METHODOLOGY
CUTTING & SQUARING
CRADLE GATE
TILES FIRING
TILES SORTING &
PACKING
WASTE
DISPOSAL
EMISSIONS
METHODOLOGY
RETAILER /INSTALLER
CUSTOMER
TILES SALES
TILES LOGISTIC
CRADLE GATE
EMISSIONS
WASTE
METHODOLOGY
WLCC
Income
Non-constructioncosts
Externalities
LCC
Production
Operation
Maintenance
End of use
Enviromental LCC
Conventional
LCC
STARTING POINT
SCOPE OF LCC ANALYSIS
• Direct consumptions related to
the life cycle of a product
• Big investment project
• Full cost method: environmental
cost if they are monetized in terms
of taxes or subsidies. Incomes
considered.
• Discount rate method
ISO 15686:5; 2017
Envi
rom
enta
l
To identify those cost savings related to a lower use or a greater recovery of resources or cost of CE investment
Any valuation of other externalitiesas a consequence of production
Not different agents from the value chain full cost method
Accounting principles not sustainability principles
Continuous production process LIMITATIONS
AGENT
PRODUCER
INSTALLER
RETAILER
CUSTOMER
ENVIROMENT
ISO (15686:5)
PRODUCTION
OPERATION
MAINTENANCE
END OF LIFE
EXTERNALITIES
EC-LCC
Conventional producer costs (research, development and design, raw materials, energy, depreciation & maintenance, quality control, labour)
Inside Circular Cost (water, energy, scrap tiles and the costof system asociated to recover this resources)
Outside Circular Cost (diference between cost and incomesfrom waste recovery and waste revaluation strategies)
Conventional costs of other agents (transport, installation& maintenace)
Externalities monetized from LCA analysis
1º SCHEME APPROACHED
EC
O-
CO
ST
For everyValueChain
ONE YEAR PERIOD
EC-L
CCW
C-L
CC
Income
Indirect Costs
Enviromental
Externalities
LCC
Production
Instalation
Maintenance
End of use
Recycle
DIS
PO
SAL
Recovery
Circular LCCEnviromental
LCC
Reuse
Reduce
2º SCHEME APPROACHED
A more comprehensive LCC tool
Disccount unresolved
Some double counting from environmental cost (taxes) & externalities
Still limited
Requirements
Value Chain Actors collaboration for
a global sustainability valuation but
it could be implemented in one
actor chain value
CONCLUSIONS
About the schemesapproached
1° scheme: circular value system of the product (not
so life cycle)
2º scheme
• Present valuation of the future costs
• Structure of the company & Legal system in which it is embedded
Same scopes for LCA & LCC
To know better the origin of the
value gains or losses avoiding, to some extent,
the double counting
Better Information System
Be able to quantify efficiency measures aimed at reducing the
burden of waste and residues
To create different decision scenarios truly focused on
sustainability
Allow more symbiotic models and fewer resource consumers
CONCLUSIONS
MANAGERIAL IMPLICATIONS
Better & reliable information to
To be comparable externally
To fulfil the real
objectives of transparency
and consistency
Business decisions regarding
Which products produce
Which CE decisions
take
How much pollutant
products are
Intangible returns Tangible returns
CONCLUSIONS
FURTHER INVESTIGATION
Uncertainty associated assessment
Futureimpact
Evolution of prices
Risk
Depth valuation of income & intangibles
Fromcompanies
From thirdparties
To Achieve more realistic Models & complete decisions bases
Thanks for your attention!
Sonia Medina [email protected]