An LCA, and all insights this will give you, is very valuable for start-ups. You get to know your specific environmental impact. And by knowing this early on in your business-journey, you can benefit and use these insights right from the start. With embedding sustainability in your way of operating, you will save yourself costs and hassle later on, and you are sure to take a head-start in your market. Gloria Carta, Sustainability Expert, reveals more about the benefits an LCA brings especially to start-ups.
What benefits can an LCA bring to start-ups?
I think the answer is twofold. First, an LCA brings certainty about your product and its impact. For many people, sustainability is mostly a guess. People have an idea of what the impact of their product is (e.g. big or small), or where it's coming from. But you can never be sure if you don’t calculate your impact.
And there are a lot of misconceptions about environmental impact. I always see people, for example, being concerned about transportation. But often that's not even a significant impact. And other steps or materials in your production have a way higher contribution.
Getting correct insights is very helpful for the rest of your journey as a starting company. Even when you are still in the pilot-phase and your product is not yet finalised. But at least getting an idea of where to really look at, can add a lot of value.
And the second reason is, as a startup, often you're creating something innovative that aims to replace current technology. Or products that are outdated or very unsustainable. You might want to say: look at our product, it is a more sustainable choice. But to say that with confidence, you need an LCA to back-up the evidence.
For start-ups in the construction sector, there is a specific reason to do an LCA; you need an LCA to calculate your “MKI”, environmental cost indicator. This indicator is the “summary” of the environmental impact of your building. Calculated by adding all MKI’s of all different products/materials used in your construction. And the lower your MKI is, the more favorable your product becomes.
When you know your MKI, you can apply to tenders (where this indicator is always asked). And in general, in almost every construction-project they will ask about your MKI. So with doing an LCA, you are really opening up opportunities for your business.
Why is right at the start the perfect moment to embed sustainability in your business?
When you can prove the sustainable benefits of your product, this can give you great competitive advantages in your market. And with upcoming sustainability legislations, that get stricter and stricter, insights in your sustainable performance can also help you attract and persuade investors.
Starting early on in your business with sustainability is a great idea. In this way, you can really embed sustainability and coherent choices into your business. When you consider this right from the start, you don't run the risk of having unsustainable practices already cemented in your business.
If you, later on, would have to re-think every choice and way of operating your business, this could lead to way higher costs and big hassles. And maybe later on, there might not be a lot of room for changes, because of agreements with suppliers, customers or other stakeholders.
So protect yourself against this, and start sustainably from the start.
Can you give some examples of start-up projects you calculated?
One start-up I was recently doing an LCA study for, was a producer of natural dye for the textile' industry. This is a sector with a huge environmental impact, and many start-ups aim to improve the status-quo.
This start-up was still in an early stage; they were working on developing their product and their methodology on how to create their dye. They were sourcing raw materials from various suppliers and still exploring their options.
So what we did is we made a cradle-to-gate LCA analysis, which only looks at the production steps. But, as their production process was not finalised, we also gave them flexible calculation-sheets, so they could input different numbers for example to check the effect of the packaging materials, the raw material suppliers, etc. In this way, they could experiment with different kinds of scenarios. And see how different choices they made would influence the impact.
Right now, they might be using very little electricity to create their product. But perhaps later, when they scale up, the energy use will be completely different. With our model, they can anticipate future situations and keep calculating their impact. Even when we are no longer here to guide them.
We helped this start-up with the data-collection; data-collection is perhaps the most crucial step in a LCA-study. Because the quality and precision of your data influences the quality and usefulness of your results greatly.
Another start-up, one that is producing a vegan alternative to leather, gained great insights in the impact of the different materials they use to produce their end-product. And it turned out that the backing material, the material they used to cover the back of their product, contributed significantly. Way more than the rest of the end-product. So they are now looking into different options, which could lower their environmental impact significantly.
These are also insights to expect from an LCA. You will get to know your own product in a new way, and the insights will enable you to make choices and replace steps/materials that cause your biggest impact.
What are start-up specific challenges during an LCA?
In some situations, it is not yet possible to calculate a full LCA; because the product is still in a too early stage, or production is very small-scale. Then it's difficult to imagine and understand what, for example, energy consumption would be in a bigger production line.
Or some raw material data is not yet certain or available. Sometimes, start-ups work with very innovative or experimental materials. And there are no database-references known yet. These start-ups are simply further ahead of the market.
This makes the work a little bit more challenging for us, but also extra interesting. This demands a cautious approach and research from our side, but we make sure to find numbers or proxies to conduct the calculations with so we can still provide useful insights.
If a full LCA is not yet possible, we will calculate the impact for the impact categories possible or an analysis of their environmental hotspots (where the biggest impact occurs). And these insights still tell a lot; for example the impact to global warming or the carbon footprint of your product. This is very valuable to know.
On the side of the start-up, we sometimes see a financial challenge. Especially when the product is still in development, and there is not much revenue to be seen yet. Then, an LCA, or other impact analysis, can feel like a big investment. And I totally understand that. So some start-ups decide to postpone this to a later phase. On the other hand, starting early on with sustainability, also brings great benefits.
In some cases, a subsidy or investment, can help enable the start-up to calculate the impact of their business. Since it can also increase the value of the start-up, it could be a smart thing to start with.
And last challenge, start-ups are often operating in small teams. Where everyone has their specific tasks. The needed data-collection can be complex and quite time-consuming; there is not always capacity to do so. In that case, I advise appointing someone in the team to be responsible for this, so that at least someone is on top of it. Another good alternative is to maybe hire a sustainability intern, whose responsibility will be helping to collect the data.
Concluding; what is your advice for start-ups?
My advice to start-ups is to really embrace sustainability, and get ahead of their market right from the start. Get insights in your impact, understand how you are affecting our planet. These insights will guide the rest of your business’ lifetime.
If you calculate this impact once, you can use it for communication, you can use it with investors, you can use it to understand your product’s position in the market in terms of sustainability, and you could use the insights to adjust your design. Environmental wins often lead to financial wins as well, and with embedding sustainability in your organisation, you prepare yourself to become truly future-proof.
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