The Socio-Eco-Efficiency Analysis: SEEbalance®

SEEbalanceSEEbalance®®

Social impact

Reduction of raw material

and energy consumption

En

viro

nm

enta

l im

pac

t

Costs

high socio-eco-efficiency

low number of working

accidents

12.01.2005 2

The Four Strategic BASF Guidelines for Long-term Success

Formthe best teamin the industry

Ensuresustainable

develop-ment

Earn apremium on ourcost of capital

Help ourcustomers to bemore successful

12.01.2005 3

The Three Pillars of Sustainable Development

Eco-EfficiencyAnalysis

SEEbalance®-Analysis

society

ecology

economy

Sustainable Development

12.01.2005 4

Development of SEEbalance®

From the Eco-Efficiency Analysis to the SEEbalance®

aim:

Integration of quantifiable social indicators in the BASF eco-efficiency analysis

schedule: starting point 2001

end point March 2005

this subproject was a part of the BMBF project „Sustainable Chemistry of Aromatics“

co-operation partners for the development of the SEEbalance® were:

Universität Karlsruhe (TH)Institut für Geographie und Geoökologie

12.01.2005 5

What is an Socio-Eco-Efficiency Analysis (SEEbalance)?

Method for the comprehensive assessment of products and processes.

Ecological and economic and social aspects are given equal weight in assessments.

The products are analyzed from the angle of the end customer.

(Future) scenarios and effects of various action options are presented.

Eco-efficiency analysis is a standard tool in the BASF Group; more than 240 analyses have been carried out (about 15 SEEbalance).

12.01.2005 6

SEEbalance® Results: Men‘s Shirts

This analysis includes in the social assessment the stakeholder employees, consumers, national community and future generations.

The 100% polyester shirt is a hypothetical shirt considered only for comparison and is not frequently encountered in the market.

100 % cotton shirtWearing a blue

men‘s shirt (40 times)

alternative Comparable alternatives

User benefit

100% polyester shirt (PET)

blended fabric shirt (65% cotton, 35% PET)

12.01.2005 7

Results:Base Case: Blue Men‘s Shirts

Wearing a

blue men‘s

shirt (40

times)

Wearing a

blue men‘s

shirt (40

times) 1,25

1,00

0,75

1,00

0,75

1,25

1,00

0,75

socia

l influ

encecosts

envi

ronm

enta

l bur

den

PET

Blended fabric

Cotton

0,75

1,25

1,00

0,75

1,25 1,00

en

virn

on

men

tal b

urd

en

costs

0,751,001,25

1,25

1,00

0,75

soci

al in

flu

ence

costs

12.01.2005 8

Weighting FactorSurvey in Germany

50% child labour50% child labour

25% foreign direct investment

25% foreign direct investment

25% imports from developing countries

25% imports from developing countries

25% employees25% employees

20% consumer20% consumer

15% working accidents

15% working accidents

60% toxicity potential

60% toxicity potential

20% fatal working accidents

20% fatal working accidents

40% other risks and product characteristics

40% other risks and product characteristics

15% occupational diseases

15% occupational diseases

25% toxicity potential + transport

25% toxicity potential + transport

10% wages and salaries

10% wages and salaries

10% professional training

10% professional training20%

local & national community

20% local & national

community

20%future

generation

20%future

generation

15%international community

15%international community

30% employees30% employees

15% qualified employees

15% qualified employees

15% gender equality15% gender equality

10% integration of disabled people

10% integration of disabled people

15% part-time employees

15% part-time employees

15% family support15% family support5% strikes and

lockouts

5% strikes and lockouts

25% number of trainees

25% number of trainees

25% R&D (company expenditures)

25% R&D (company expenditures)

25% capital investments

25% capital investments

25% social security

25% social security

12.01.2005 9

Analogies between Ecological and Social LCA

UB

= u

ser

benefit

Ökologischer Fingerprint

Ecological LCA Social LCA

1st : Inventory analysis (inputs/ outputs) 2nd: Impact assessment for defined indicators

e. g. GWP: 11 CO2-equivalent per UB

1st : Inventory analysis (inputs/ outputs) 2nd: Impact assessment for defined indicators

e. g. employees: 3 working accidents per UB

0,0

0,5

1,0Energy consumption

Emissions

Eco-toxicity potentialRaw material consumption

Area use

Social FingerprintAggregation and presentation of results

Employees

Consumer

Local & national community

Future generation

Internationalecommunity alternative 1

alternative 2

Potential impact of product or processes on human/social capital e. g. - consumer

- future generation

What is to be assessed? Potential impact of product or processes on natural capitale. g. - energy consumption - global warming potential (GWP)

0,0

0,5

1,0

Ecological Fingerprint

12.01.2005 10

Results:Social Fingerprint

The social fingerprint shows the social influence of a product or process according to the weighting factors

0,00

0,50

1,00

employees

consumer

national community

future generation

cotton polyester blended febric

12.01.2005 11

Results:Employees: Working Accidents

The graph shows that the cotton shirt manufacture causes about four times more working accidents than the polyester shirt manufacture.

The accidents occur primarily during cotton cultivation, since this step is very labour – intensive.

Many accidents are caused by the use of pesticides.

0

5

10

15

20

25

30

35

40

45

polyester shirt cotton shirt blended fabric

wo

rkin

g a

ccid

ents

/ 1

mill

ion

CB

0

5

10

15

20

25

30

35

40

45

polyester shirt cotton shirt blended fabric

0

5

10

15

20

25

30

35

40

45

cotton shirt blended fabric

material manufacture

energy and water supply

confection

upgrading

yarning und weaving

transportation

cultivation cotton

12.01.2005 12

Assessment Scheme for Social Criteria

Normalization factor

• Question: To which extent does the product

contribute to the socialproblem on a national level?

• Character: objective

• Source:To be calculated from

national statistics

Weighting factor

• Question:How serious is the social problem

compared to the others?(probability, extent and duration of

consequences)

• Character: normative, subjective

• Source:polls (among experts or

stakeholders)

X

= total assessment factorSource: Schmidt

12.01.2005 13

Course of Action

The SEEbalance® will be used as an official tool for life cycle assessment in the eco-efficiency group

Boosted external communication and public relations

In the future 10 – 20 % of all studies will be SEEbalances®

12.01.2005 14

How Does SEEbalance ® Work?

1st step: Search for the economic sector of the product

e.g. polyester: sector “production of polymers” (NACE 24.16)

2nd step: Search for the entries in the social LCA database

e.g. Production of polymers (NACE 24.16):

– Working accidents: 0.058 accidents / 1000 t

– Number of employees: 9,9 employees / 1000 t

– ... (all other indicators)

„Social profile“ of 1000 t of polyester (analogous to eco-profile)

3rd step: Multiply specific social profile with the product quantities

12.01.2005 15

NACE - International Compatibility

ISIC CPC

NACE

national version NACE

(e.g. WZ)

national version CPA

(e.g. GP)

CPA

National Level

EU-Level

Worldwide (UN)

Industries Goods

Source: Eurostat 2003

Related classifications in more than 140 countries

Limited compatibility with NAICS (Canada, USA, Mexico)

12.01.2005 16

NACE - The EU-Classification of Industries

Sectors Industries

A, B

C, D, E

F

G, H, I

J, K

L-Q

Agriculture and forestry, fishing

Manufacturing industry

Construction

Commerce, hotel trade, transports

Financial industry, enterprise services

Public and private services

12.01.2005 17

NACE – Hierarchical Levels

Level Code Example

“1-letter” A-Q D Manufacturing industry

“2-letters” CA-DN DG Chemical industry

“2-digit” 01-99 24 Chemical industry

“3-digit” 01.1-99.0 24.1 Production of basic chemicalgoods

“4-digit” 01.11-99.00 24.16 Production of polymers

12.01.2005 18

Life Cycle of the Cotton Shirt

wearing of the shirt

cleaning/ 40 times

MSWI

dyeing

sum of all transports

retail

confection

weaving

mining of raw materials

production disposaluse

upgrading

yarning

cultivation of cotton and transports

raw materials

agents

collection of old clothing

ironing

production in China Not included because the impact for all alternatives are equal

production of chemicals for textiles

fertilzer/pesticides

12.01.2005 19

SEECube®

1,25

1,00

0,75

1,00

0,75

1,25

1,00

0,75

socia

l influ

ence

costs

Env

iron

men

tal b

urde

n

alternative 2alternative 1

Incr

easing

socio

-eco

-

efficie

ncy

Decre

asin

g

socio

-eco

efficie

ncy

12.01.2005 20

Placement of the SEEbalance®

eco-efficiency

„cradle-to-grave and costs“... including all life cycle costs LCA

„cradle-to-grave“... including use and recycling

eco-profile

„cradle-to-gate“...from raw material to factory gate

SEEbalance®

„cradle-to-grave, costs and social aspects“

... including social aspects

12.01.2005 21

Aims of the SEEbalance®

1. „Quality-of-life“:

Improvement of objective living conditions

Improvement of subjective well-being

2. „Social Cohesion“:

Reduction of disparity and social exclusion

Fortification of social bonds and coherence

3. „Sustainability“:

Intergenerational fairness

International responsibility (intergenerational fairness)

According to the system of GESIS/ ZUMA 2001

12.01.2005 22

Reasons for the development of the SEEbalance®

Integration of the third pillar of sustainability

Increasing pressure on part

of society

Supposed hormonal effects of phthalates (plasticizer) in children’s toys resulted in disappearance from the market even though no scientitic proof existed

TV – enclosure with flame retardant

Acceptance by the customer is

imperative for the purchase of a

product

Taste of packaged food, e.g. sausages

Due to the child labour in NIKE sneaker production, a compaign which proclaimed an Anti – Nike day was started (May 2001).

12.01.2005 23

Application of the SEEbalance®

Profit:

• secure decisions about products and markets

• communication - on coperate level- on product level

has an established and quantifiable basis (e.g. for coperate reports)

Internal Strategy

Comparison of production sites

Comparison of markets

External

Marketing

(social) acceptance of the product (projects:sausage -study, redevelopment of residential area)

12.01.2005 24

Procedure

define customer benefit

identify products / processes

establish life cycle

determination of social profiles for each step

determination of eco-profiles for each step

determination of costs for all life cycle

segments

aggregation of stakeholder effects

aggregation of the effects categories

calculation of total life cycle costs

normalization of social effects

normalization of environmental impact

normalization of costs

create SEECube®

societysociety ecologyecology economyeconomy