Procurement Glossary
Life Cycle Assessment (LCA): Environmental assessment of products in Procurement
November 19, 2025
Life Cycle Assessment (LCA) is a systematic method for evaluating the environmental impact of products over their entire life cycle. In Procurement , this analysis enables well-founded decisions for sustainable procurement strategies and the identification of environmentally friendly suppliers. Find out below what Life Cycle Assessment means, which methods are used and how you can use LCA strategically in procurement management.
Key Facts
- LCA assesses environmental impact from raw material extraction to disposal
- Standardized according to ISO 14040 and ISO 14044 for comparable results
- Enables data-based supplier selection according to sustainability criteria
- Identifies hotspots for targeted environmental improvements in the supply chain
- Supports compliance with EU taxonomy and corporate sustainability reporting
Contents
Definition: Life Cycle Assessment (LCA)
Life cycle assessment is a scientific method for quantitatively analyzing the environmental impact of products, services or processes over their entire life cycle.
Core elements of an LCA analysis
A complete LCA comprises four standardized phases in accordance with ISO 14040:
- Target definition and scope of investigation
- Life Cycle Inventory
- Life cycle impact assessment
- Evaluation and interpretation of the results
LCA versus product carbon footprint
While the product carbon footprint only considers greenhouse gas emissions, LCA also analyzes factors such as water consumption, land use and toxicity. This holistic approach prevents problem shifts between different environmental categories.
Importance of LCA in Procurement
In strategic Procurement , LCA enables the objective evaluation of suppliers and product alternatives. Buyers can achieve significant environmental improvements through material substitution and targeted supplier development, while at the same time meeting regulatory requirements.
Methods and procedure for Life Cycle Assessment (LCA)
The systematic implementation of an LCA follows established methods and standards that ensure a scientifically sound environmental assessment.
Data collection and system boundaries
The quality of an LCA depends largely on the completeness and accuracy of the data basis. Primary data from suppliers is supplemented by secondary data from databases such as ecoinvent. The definition of the system boundaries determines which processes are included in the analysis:
- Cradle-to-gate: from raw material extraction to the factory gate
- Cradle-to-grave: complete life cycle including use and disposal
- Gate-to-gate: focus on specific production phases
Software tools and evaluation methods
Professional LCA software such as SimaPro or GaBi automates complex calculations and ensures methodological consistency. The impact assessment is carried out using established methods such as ReCiPe or CML, which quantify and weight different environmental categories.
Integration into procurement processes
Successful LCA integration requires integration into existing purchasing processes. Supplier codes of conduct can define LCA requirements, while EcoVadis ratings provide standardized sustainability assessments.
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Key figures for controlling
Effective LCA programs require meaningful metrics to measure progress and manage improvement measures.
Environmental impact indicators
Central indicators quantify the environmental performance of the product portfolio and enable benchmarking. Important key figures include
- CO2 equivalents per product unit or sales euro
- Water consumption and eutrophication potential
- Share of recycled materials in total volume
- Toxicity potential of critical ingredients
Process and efficiency KPIs
Operational key figures measure the effectiveness of LCA integration in procurement processes. The proportion of LCA-assessed suppliers in the purchasing volume shows the degree of implementation. The average time for LCA assessments of new products indicates process efficiency.
Compliance and target achievement
Regulatory KPIs monitor compliance with environmental standards and science-based targets. Progress in decarbonizing the supply chain is measured by annual emissions reductions, while the number of LCA-compliant product launches reflects the strategic direction.
Risks, dependencies and countermeasures
The implementation of LCA in Procurement poses specific challenges that need to be addressed through systematic risk management.
Data quality and availability
Incomplete or outdated data can lead to incorrect assessments and distort investment decisions. Suppliers are often unwilling or unable to provide detailed environmental data. Countermeasures include:
- Building long-term partnerships with transparent suppliers
- Investment in supplier development and data management systems
- Use of conservative estimates for data gaps
Methodological uncertainties
Different LCA methods can lead to different results, which makes comparability and decision-making more difficult. The choice of allocation methods and system boundaries significantly influences results. Standardized industry guidelines and external validation minimize these risks.
Cost-benefit ratio
Comprehensive LCA studies require significant resources with no guaranteed cost savings. Due diligence processes need to be extended, creating additional complexity. A step-by-step implementation starting with critical Categories optimizes the cost-benefit ratio.
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Practical example
An automotive supplier carries out an LCA for battery components in order to decide between different cathode materials. The analysis shows that despite their lower energy density, lithium iron phosphate batteries produce 30% less CO2 emissions over their entire life cycle than nickel-cobalt-manganese alternatives. In addition, the risk of conflict minerals is significantly reduced.
- Data collection from three qualified suppliers over 6 months
- Comparative LCA study with external validation
- Integration of the results into supplier evaluation and price negotiations
- Implementation of continuous monitoring of environmental indicators
Current developments and effects
The LCA landscape is developing rapidly due to regulatory requirements, technological innovations and changing stakeholder expectations.
Regulatory drivers and compliance
The EU taxonomy and the Supply Chain Duty of Care Act are increasing the pressure on companies to systematically record their environmental impact. The Corporate Sustainability Reporting Directive makes LCA-based reporting mandatory for many companies.
Digitalization and AI integration
Artificial intelligence is revolutionizing LCA performance through automated data collection, pattern recognition in complex supply chains and predictive modelling. Machine learning algorithms can generate and continuously improve reliable LCA estimates from incomplete data sets.
Sector-specific LCA developments
Industries are increasingly developing specific LCA approaches: The automotive industry is focusing on decarbonizing the supply chain, while the packaging industry is prioritizing recyclability assessments and second-life use.
Conclusion
Life cycle assessment is establishing itself as an indispensable tool for sustainable procurement management and regulatory compliance. Systematic environmental assessment enables data-based decisions, reduces risks and creates competitive advantages through optimized supplier selection. Despite methodological challenges and implementation costs, the strategic advantages clearly outweigh the disadvantages, especially against the backdrop of stricter environmental regulations and increasing stakeholder expectations.
FAQ
What distinguishes LCA from other sustainability assessments?
LCA offers a quantitative, scientifically sound analysis of all environmental categories over the entire product life cycle. In contrast to qualitative assessments or individual indicators such as the carbon footprint, LCA systematically records interactions between different environmental impacts and prevents problems from shifting.
How long does a complete LCA study take?
A comprehensive LCA typically takes 3-6 months, depending on product complexity and data availability. Simplified screening LCAs can be completed in 2-4 weeks. Data collection from suppliers is often the time-critical factor, which is why early involvement in procurement processes is essential.
What are the costs for LCA implementation?
The costs vary greatly depending on the scope and methodology. External LCA studies cost 15,000-50,000 euros per product. Internal capacities require software licenses (5,000-20,000 euros per year) and staff training. In the long term, investments pay for themselves through optimized supplier selection and risk minimization.
How can LCA be integrated into existing purchasing processes?
Successful integration begins with the adaptation of supplier qualification processes and RFQ templates. LCA criteria are integrated into evaluation matrices and weighted in strategic sourcing decisions. Pilot projects with critical Categories create experience for the gradual expansion to the entire portfolio.
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