International Life Cycle Partnership To bring science-based life cycle approaches into practice worldwide UNEP/SETAC Life-Cycle Initiative Life Cycle Management Capability Maturity Model (LCM-CMM) Building Capacity for Sustainable Value Chains

SUSTAINABILE VALUE CHAINS Global Issues, international standards, certifications, reporting

LEARNING CURVE CHALLENGE Incremental improvements to build capability years of learning Today’s Best Practices

SUSTAINABILITY CHALLENGE Local concerns, development priorities Global logic of markets vs. Local logic of sustainability Global Issues, international standards, certifications, reporting

Complements performance measures –Fewer but targeted –Quality control Aligns near term targets with longer term development need More fundamental concept that applies across industries, products & regions 5 Capability (Learning) Performance (Accountability) Optimum Learning and Performance Improvement Heroic efforts Underutilized Investments Focused Results Capability Framework Promotes Balanced Improvement Efforts

LIFE CYCLE ASSESSMENT ISO & Goal and Scope Definition Inventory Analysis Impact Assessment Interpretation

BETTER DECISIONS & IMPROVED PERFORMANCE Use of diverse sources of information, Sensitivity to boundary definition and interconnections, Systemic view of problem, Causal analysis to promote innovative solutions, Inclusive process to resolve conflicts and build support, and Open communications to build trust and collaboration. Improved decision- making supports innovation, operational excellence, risk management

MAKING A BUSINESS CASE Economic –Income inequality –Outsourcing jobs –Trade imbalances Environmental –Climate change- extreme weather, rising sea, 90°F days, crop damage –Peak oil, price volatility –Air quality- respiratory illness, asthma –Resource depletion- e.g. rare earths –Toxic chemicals –Water scarcity, quality –Land use –Biodiversity & species extinctions Social –Child, forced labor –Supply chain mgmt in developing economies –Socially responsible investors –Fair trade ROIC Margin Invested Capital Revenue Cost of Sales Working Capital Fixed Capital CAPTURING VALUE EXTERNAL DRIVERS Products / Customers – New products & services, brand value – Market restrictions – Taxes- e.g. carbon tax Factories/ Communities – License to operate, ease of permitting – Improved process efficiency – Employee morale, productivity – Taxes, fines, liabilities Supply Chain – Public campaigns, supply interruptions – Liability for clean up – Access to quality suppliers Public/ Communications – Access to capital – Recruitment & retention – Reputation, brand value, stock P/E ratio IMPACT ON COMPANY

Life Cycle Management Capability Maturity Model (LCM - CMM) LevelSpan of control / influence Metrics Decision Process Business case Qualified ProjectCompliance- yes/no Process outputs Team-based, visible trade-offs Risk Avoidance; license to operate Efficient EnterpriseProcess inputs/ outputs Eco- efficiency Rule-based trade- offs to achieve enterprise goals Improved operating margins Labor & resource efficiency Effective Value chainCradle to grave, integrated across value chain Fact-based to anticipate value chain trade-offs Top line growth, Innovative products, new markets Adaptive SocietySustainability measures Resiliency Value-based to co- develop business goals & social expectations Strong balance sheet Long- term competitive advantage

Continual Improvement Multiple P-D-L-A Cycles CapabilityScopeBusiness case AdaptiveSocietyCapital preservation; sustainable prosperity EffectiveValue chain Top line growth - Innovative products, new markets EfficientCompanyProcess efficiency; improved margins QualifiedFacility/ Process Risk avoidance; license to operate Logical sequence of improvements based on experiences of global leaders to speed learning

Table of Contents 1.A Quick Tour 2.Competitive Context 3.Conducting a Maturity Assessment 4.Developing an Improvement Plan 5.Align Improvements with Business Strategy 6.Moving from Events to Management Systems