Risks and Opportunities of using LCA-based approaches for Biodiversity Footprinting

Tom White

Talitha Bromwich

6th September 2024

5 minutes read

[This article, written by Thomas White and Talitha Bromwich, is a summary of a preprint available at Open Science Framework – doi.org/10.31219/osf.io/th8j6]

As businesses start on their nature positive journey, a range of tools and approaches are emerging to help assess risks and impacts on biodiversity. Sustainability frameworks like the CSRD and TNFD ask companies to take a whole lifecycle approach to understanding impacts. This recognizes that a holistic approach is needed to account for the substantial impacts across entire life cycles (from raw material inputs and processing to use and end-of-life impacts).

One leading approach increasingly recommended for assessing organizational impacts on nature is Life Cycle Assessments. These tools are very powerful for helping understand impacts across all organizational activities and tracking progress year-on-year, but they make many assumptions and mask substantial uncertainties that represent a risk if they are used inappropriately.

In a recent pre-preprint led by researchers at Oxford University and The Biodiversity Consultancy we outline the risks and opportunities of using LCA tools as part of biodiversity strategy design.

There are substantial uncertainties within the biodiversity footprint estimates provided by LCAs, which are rarely fully understood or communicated in results. These uncertainties include those inherent in the model structure (e.g., what components of biodiversity are included, what threats to biodiversity are being modelled) and uncertainty in data underlying the models (e.g., error in parameters used in the models to convert different pressures to biodiversity impacts). There are also uncertainties caused by different choices made by the LCA practitioner (e.g. deciding what LCA model to use, how to match company data to LCA categories), and uncertainties associated with communicating the biodiversity metrics (often presented as potentially disappeared fraction of species).

There are thus risks associated with the use of LCAs, which could lead to poorly prioritized or inappropriate action to address biodiversity impacts. We provide suggestions for better understanding, reducing and navigating these uncertainties to support robust decision making in addressing biodiversity impacts.

Navigating uncertainties to support robust decision-making

Reducing Uncertainty

• Reduce uncertainty in data inputs – Businesses can work to improve the quality of data on their activities and sourcing to reduce uncertainty in LCA footprints.
• Reduce uncertainty in models – Researchers are working to improve LCA models, which will reduce uncertainties in outputs. For example, including new threats to biodiversity in LCA models, developing new metrics that capture different components of biodiversity and taxa.

Documenting & Understanding Uncertainty

• Document assumptions and limitations – When using LCAs, it is important to document choices and assumptions made, to allow others to better interpret the results and reduce uncertainties in communication.
• Test sensitivity / Use multiple LCA methods – Utilising multiple LCA methods, and testing the sensitivity of the results is a key approach to helping triangulate effort and identify those high impact activities or pressures that are robust to these methodological changes.
• Use uncertainty tools within LCA software – Some LCA software now enable users to explore some of these uncertainties and change parameters used in the models. These should be used wherever possible.

Navigating Uncertainty

• Tools for decisions in high-uncertainty contexts – Tools are available to help make decisions when uncertainties are high and unclear. These include tools such as info-gap theory, which help a user think through “how wrong would this estimate have to be for me to change my decision?”.
• Get started, and plan to update – Uncertainty shouldn’t be used as an excuse for inaction. Getting started now, with a clear plan to update in future as the methods and tools develop, should be a clear part of engagement with biodiversity.
• Take a conservative approach – Where uncertainties are high, taking a precautionary approach to impact calculations, which tends towards overestimating rather than underestimating impacts, can sometimes reduce the risks to businesses associated with their use (although see the preprint for further considerations).

Opportunities for using LCA-based approaches in biodiversity strategy design

Understanding the risks posed by these uncertainties, weighing them against the costs of inappropriate action or inaction, and ensuring decisions are robust to these uncertainties, is vital for designing effective biodiversity strategies.

We provide the following recommendations for using LCAs in biodiversity strategy design:

• LCAs are most powerful for high-level risk screening to prioritise action and highlight areas where focused effort and more granular data is needed, to track progress towards abating impacts year-on-year and identify low risk actions.
• Once highest impact areas are identified, LCAs should be used alongside other more specific approaches and methods to gain robust impact estimates of biodiversity impact, and to guide location-specific and effective action to protect and restore nature.
• The absolute values of biodiversity impacts from LCAs should be interpreted and used cautiously. Whilst useful for communicating results and tracking change over time (if methods stay constant), these values mask substantial uncertainties and are not linked to specific taxa, habitats or locations – making them poorly suited for goal and target setting.
• Until uncertainties can be reduced, it is good practice for organizational targets to be based around a basket of complementary metrics from LCA and non-LCA methods including actions, pressures, and primary data on the state of nature. Pressure targets could for example utilize LCA midpoints – which are more tangible to measure and responsive to company action. If targets tackle biodiversity measurement directly, they should be based on real biodiversity measurements, rather than inferred from LCA.
• Lastly, LCAs should be used in combination with other clear recommendations from conservation science. E.g., identifying low-risk mitigation actions, investing in proactive conservation measures. These actions are unlikely to have unintended consequences for biodiversity.

This work is currently available as a preprint online. This includes more detail on the points raised above, as well as examples showing how these uncertainties could lead to risks in business strategy design.

Do get in touch if you’d like to discuss or you have any suggestions. We’d really appreciate your feedback and input on the working paper!