Characterisation of social impacts in LCA. Part 2: implementation in six company case studies

Abstract Background, Aim and Scope A characterisation model based on multi-criteria indicators has been developed for each of four impact categories representing the labour rights according to the conventions of the International Labour Organisation, ILO, covering: Forced labour, Discrimination, Restrictions of freedom of association and collective bargaining, and Child labour (Dreyer et al, 2009a).

These impact categories are considered by the authors to be among the obligatory impact categories in a Social LCA. The characterisation models combine information about the way a company manages its behaviour towards some of its important stakeholders, its employees, with information about the geographical location ad branch of industry of the company and the risk of violations of these workers’ rights inherent in the setting of the company.

The result is an indicator score which for each impact category represents the risk that violations occur in the company. In order to test the feasibility and relevance of the developed methodology, it is tested on real cases. Materials and Methods The developed characterisation models are applied to six cases representing individual manufacturing companies from three different continents.

Five of the case companies are manufacturing companies while the sixth is a knowledge company. The application involves scoring the management efforts of the case company in a multi-criteria scorecard and translating the scores into an aggregated performance score, which represents the effort of the management in order to prevent violations of the workers’ rights to occur in the company.

The company performance score is multiplied by a contextual adjustment score which reflects the risk of violations taking place in the context (in terms of geographical location or industrial branch or sector) of the company. The resulting indicator score represents the risk that violations take place of the labour right represented by the impact category.

Results The social impact characterisation is performed for each of the six case studies using the methodology earlier developed. The procedure and outcome are documented through all the intermediary results shown for all four obligatory impact categories for each of the six case studies. Discussion The results are judged against the risk which was observed during visits and interviews at each of the six case companies, and their realism and relevance are discussed.

They are found to be satisfactory for all four impact categories for the manufacturing companies, but there are some problems for two of the impact categories in the case company which represents knowledge work, and it is discussed how these problems may be addressed through change of the underlying scorecard or the way in which the scoring is translated into a company performance score.

Conclusions It is concluded that it is feasible to perform a characterisation of the impacts related to the four obligatory impact categories representing the labour rights according to the conventions of the International Labour Organisation, ILO, covering: Forced labour, Discrimination, Restrictions of freedom of association and collective bargaining, and Child labour.

When compared to the observed situation in the companies, the results are also found to be relevant and realistic. Recommendations and Perspectives The proposed characterisation method is rather time-consuming and can not realistically be applied to all companies in the product system. It must therefore be combined with less time-requiring screening methods which can help identify the key companies in the life cycle for which a detailed analysis is required.

The possibility to apply country- or industry sector-based information is discussed, and while it is found useful to identify low-risk companies and eliminate them from more detailed studies, the ability of the screening methods to discriminate between companies located in medium and high risk contexts is questionable.