A new International Organization for Standardization (ISO) standard, ISO 14008, is intended to help companies valuate and manage their environmental impact by calculating the cost of their goods and services on the environment.
Researchers at Chalmers University of Technology in Sweden led the development of the standard for monetary valuation. The valuation tool weighs different types of environmental impacts. With this approach, an overall picture of what impact a product or service has on the environment throughout its life cycle is given.
The ISO standard contains a guide for how monetary valuation should be made, defines terms and sets requirements for documentation.
The researchers say that many different aspects have been taken into consideration including: energy consumption, climate impact, material use and emissions into water, air and soil. During a product’s lifetime, the amount of emissions generated, and amount of resources expended can also be measured. These lead to many measurable environmental effects, such as reduced crop yields, lower fish stocks and shortened human life spans, due to floods and heat waves.
Using market prices for cereals, fish and meat, the cost of the impact can be calculated. The end result is a concrete figure, calculated in euros. In some cases, the figure represents a real incurred cost for the company, in the form of taxation or fees, the researchers said. In other cases, the figure signals possible future economic liabilities, or that the product results in environmental damage that the company wants to avoid.
The work was done in collaboration with several companies including AB Volvo, Essity, Nouryon (formerly Akzo Nobel Specialty Chemicals) and the IVL Swedish Environmental Institute. The initiative was undertaken by the Swedish Life Cycle Center.
Illustration Courtesy of Yen Strandqvist, Chalmers