Measuring eco-efficiency at the product level - An analysis of four quantification methods

Goal, Scope and Background. Companies have been calculating the eco-efficiency and factor X of their products by using their own methods, as no standardized method or detailed guidelines for calculating these indicators has yet been developed. When calculating eco-efficiency, in fact, there is a good deal of controversy about the meaning and the quantification method of the product value. To address this, we have devised four methods for determining product value and quantifying eco-efficiency at the product level, while applying them to digital cameras. We have also suggested reasonable application principles for eco-efficiency and factor X, allowing companies to measure the sustainability of a product. Methods. Four methods for the quantification of product value, the numerator of eco-efficiency, follow. In method A, one or two main quality attributes and the overall life-span of a product are considered. In method B, all quality attributes are integrated into one value as the average of their square roots.. Meanwhile, a linear transformation principle and the weighting factors of each attribute are used in method C, allowing for the integration for all quality attributes into one value. Lastly, a non-linear transformation principle, weighting factors for each attribute, and a quality-reduction ratio are considered in measuring the product quality in method D. As for the denominator of eco-efficiency, the same Life Cycle Assessment (LCA) results are applied to each method in order to keep the focus of this study on product value and its quantification. Results and Discussion. The results show that factor X values were different depending on the method applied, even though the same products were used. This is mainly a result of the different methodological principles of the four methods. In case of method A, the calculation method was simple and the system boundaries of the numerator and denominator are the same with regard to the life span of a product. However, it was impossible to measure the improvement of other attributes. It was easy to calculate the factor X value and identify the improvement ratio of the numerator and denominator in method B. But, this method could not reflect the relative importance of each attribute. A linear normalization principle was used in method C. However, the relationship between actual values and normalized values is not always linear in reality. In the case of method D, the normalization step was carried out using non-linear value functions based pn a market situation. This effectively solved the problem of employing the linear normalization principle. It has also enabled us to identify the quality level of the chosen products by considering all those products within a market that have the same functions. In addition, it was possible to reflect the decreasing rate of product quality over the life span of a product and make the same system boundaries of the numerator and denominator by considering the quality-reduction ratio of a product. Conclusions and Perspectives. Based on our analysis results of the four methods, we created an application principle of eco-efficiency at the product level to be used when the eco-efficiency and factor X of reference and current models are exhibited to the public. First, eco-efficiency must be shown by multiplying the values of product quality to the quality-reduction ratio into a numerator, while using the environmental impact of the whole life cycle of a product as a denominator. Second, it is more reasonable to focus only on quantitative items such as the performance and features of a product where we can obtain reliable and quantifiable data. Third, when calculating the product quality, normalization based on non-linear value functions and the weighting factors of the attributes must be considered. Fourth, the whole environmental impact of a product has to be considered when calculating the denominator.