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

UNDERSTANDING THE COMPETITIVE CONTEXT

ENVIRONMENTAL CONTEXT Each industry sector has unique set of impacts, public issues, etc. Each position (tier) in supply chain has own set of constraints & opportunities Each facility must address concerns & priorities of host community and site specific environmental factors

BUSINESS CONTEXT Value Proposition –Attributes customer uses to evaluate product offering Strategy –What company will do better/ differently to achieve competitive advantage Business Model –How company is organized to capture financial value from its activities, products and services

PRODUCT SYSTEM LIFE CYCLE What is ‘visible’ in your value chain? Visible products Eco- labels, green marketing Visible waste streams Take-back & recycle Visible companies Green procurement Design standards Sustainability reporting Visible industries Best available technology, Industry code of conduct

COTTON TEXTILES Environmental and Social Issues Water Use Pesticides Soil degradation Child labor Dyes & bleaches Worker health Bulky waste 1.Where are you in value chain? 2.Which practices are you ready to adopt? Fair labor practices Bed & Furrow Integrated pest mgmt. Patagonia Common Threads Green Chemistry

Seed CottonRaw FiberYarn Finished Product COTTON TEXTILES Business Value Chain 1.Where is profit captured in value chain? 2.What is your ability to shift value capture? Fair labor practices Bed & Furrow Integrated pest mgmt. Patagonia Common Threads Green Chemistry Retail $0.32$0.76$1.32$3.80$25.00/kg

Textco Inc. Hypothetical case study- fabric producer, weaving, dyeing, bleaching, etc. Supplier to branded consumer goods company Customer has requested data for eco- labels & carbon footprint goals Operations manager has been tasked with developing plan to respond

EXERCISE #1 – FACILITY PROFILE Child labor Pesticides Water use Chemicals- dyes, bleaches Soil degradation, habitat destruction Spun yarn dyes Nat gas, electricity Wet processes Bleaching Peroxide, complexing agents surfactants Continuous pad dyeing Water, dyes Fixation by steam Scouring Alkali, auxiliary chemicals Oxidative desizing Hydrogen peroxide Caustic soda Wastewater treatment Steam boiler Finished fabric Wet chemical proc. COD, metal complexes Singeing off- gas See companion Worksheet #1

WORKSHEET #1 – Facility Profile

LIFE CYCLE SCAN Harvest/ Extract ManufactureDistribute/ Use/ Service EOL Mgmt. Materials Water useLandfill disposal Energy Wash & dry Chemicals PesticidesDyes, bleachesDetergent, softeners Other Child labor Soil degradation Habitat loss Child laborShort fashion life of garment

SWOT MATRIX StrengthWeakness Use strengths to take advantage of opportunities Overcome weaknesses by taking advantage of opportunities Use strengths to avoid threats Minimize weakness and avoid threats Threat Opportunity EXTERNAL FACTORS INTERNAL FACTORS Maturity assessment Growth Risk Mgmt. Positioning – Org. Development LCA

EXTERNAL FACTORS THREATS Tighter water quality limits Chemicals of concern Organic cotton OPPORTUNITIES Green chemistry / substitution Organic cotton See companion Worksheet #2

WORKSHEET #2 – External Factors

CAN ENVIRONMENTAL INITITAIVES ADD TO VALUE PROPOSITION? Costs- Do environmental drivers influence cost structure? Customer value- Are we in a position to communicate environmental benefits? Risk- Are we exposed or in a position to assume risk for a fee? Resources & capabilities- Are we in a position to leverage technical strengths? Market power- Are we in a position to exercise power to drive higher standards? Information- Are we in a position to control the flow? Do customers want environmental data?