Developing a Conceptual Framework For The Comprehensiveness of Social Life Cycle Assessment - A Case Study on Oiconomy Pricing

Abstract

Achieving sustainability in global value chains is a complex challenge for businesses pursuing the 2030 UN Sustainable Development Goals (SDGs). The intricacies stem from diverse organizations across tiers and regions, resulting in inefficiencies in addressing cross-border environmental and societal impacts, often considered external costs. Lifecycle-based assessment approach helps practitioners identify environmental and societal risks in product life cycles and develop policies for sustainable practices. However, compared to environmental life cycle assessment (E-LCA), social life cycle assessment (S-LCA) is still in early development. The lack of a universal S-LCA methodology has led to discrepancies and difficulties in sharing and comparing assessment findings. To address this, there is an urgent need to develop comprehensive S-LCA impact categories and indicators for improved standardization and practical use. Additionally, there is a growing emphasis on internalizing environmental and social externalities for sustainability, with methods such as Oiconomy Pricing, a lifecycle-based methodology designed for monetizing sustainability impacts.

This research seeks to improve our understanding of S-LCA methodology comprehensiveness by creating a framework based on scientific discussions and applying it to a case study on Oiconomy Pricing. The study examines whether Oiconomy Pricing's design and social impact categories can universally evaluate social life cycle impacts. The main research question and two sub-research questions are formulated accordingly.

RQ: How comprehensive is the Oiconomy System as an S-LCA instrument? Sub-RQ 1) What are the characteristics of a comprehensive S-LCA methodology? Sub-RQ 2) How well does Oiconomy Pricing align with comprehensive S-LCA criteria?

This research assesses the comprehensiveness of Oiconomy through a multifaceted approach, including literature, international standards, interviews with and materiality analysis on the Oiconomy Pricing pilot company, expert consultations, and the author's experience as the tool user. Furthermore, a conceptual framework for understanding the comprehensiveness of S-LCA was proposed for systematic analysis. The framework consists of five criteria- Lifecycle thinking, Stakeholder inclusiveness, Impact pathway, Context-specific adaptation, and a set of consensus-based social topics. The combined result indicates that Oiconomy Pricing is a comprehensive methodology by design but neglected to include diverse stakeholder interests associated with social capital, especially value chain governance, and engagement. Three recommendations are given for its future development. This thesis contributes to the literature on knowledge building of S-LCA and helps business practitioners integrate S-LCA with a plethora of corporate sustainability management tools. Future studies can look at the integration of social justice, 5Ps, and intertwined sustainability topics in LCSA.