In search of income reference points for SLCA using a country level sustainability benchmark (part 2): fair minimum wage. A contribution to the Oiconomy project

Croes, Pim R.; Vermeulen, Walter J.V.

doi:10.1007/s11367-015-1017-1

Cited by 10 publications

(11 citation statements)

References 25 publications

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“…However, distinguishing itself by its foreground character, the Oiconomy system especially opens opportunities to include social and economic aspects to LCA. In earlier articles, we have already proposed methods for the social aspects of fair wages, fair trade, child labor and inequality (Croes and Vermeulen 2016a, b). This article is an important further step, not only because it covers the aspect of corruption, but also because we introduced a method more generally applicable to aspects that are better measured by a company’s preventative governance quality than by impact or concrete performance data.…”

Section: Discussionmentioning

confidence: 99%

Quantification of corruption in preventative cost-based S-LCA: a contribution to the Oiconomy project

Croes¹,

Vermeulen²

2018

Int J Life Cycle Assess

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Purpose Corruption is one of the key social aspects, heavily impacting all three Planet-, People- and Prosperity sustainability pillars and is therefore essential to be included in S-LCA. The objective of this article is to consider the available options to quantify corruption in preventative cost-based S-LCA, and to make a first proposal for quantification. Methods Literature was investigated on potential S-LCA assessment methods of corruption. To date, such literature is hardly available, so more generally, S-LCA methods were assessed on described concepts and ideas, and assessed on five criteria. Following this, using the obtained conclusions and ideas, a proposal for the quantification of corruption for the preventative cost-based Oiconomy system was developed, following the five-step Oiconomy method (Croes and Vermeulen in J Clean Prod 102:178–187, 2015 ). Results and discussion Based on some examples, Dreyer et al. (Int J Life Cycle Assess 15(3):247–259, 2010 ) argue that various social aspects, including corruption, are better assessed by companies’ preventative efforts than by their impact. Therefore, modifying a method developed by Dreyer et al. (Int J Life Cycle Assess 15(3):247–259, 2010 ), an indicator is proposed provided by the product of the marginal preventative costs and the quality of a companies’ preventative governance. For the aspect of corruption, the internationally accepted target is “zero tolerance.” Literature shows that the ultimate business choice under pressure of corruption is “not doing the business.” Because profitability is the main driver for companies, refraining from the business is proposed as the marginal preventative measure, and the related profit as the maximum quantitative indicator for S-LCA. For the risk factor, a technique is proposed based on scoring a company’s governance quality by checking the four Plan-Do-Check-Act effort classes of common risk-based certification standards’ criteria. Conclusions Our assessment shows a definite need for the inclusion of the aspect of corruption in S-LCA, but no options for a reasonably certain assessment are available for the aspect of corruption in impact-based S-LCA, also suitable for the preventative cost-based Oiconomy system. However, based on literature-derived ideas and principles, for the Oiconomy system, we could propose both a performance reference point and marginal preventative costs as a quantitative measure for corruption. The proposed measure is not paying the bribe, but the proposed indicator is a governance quality-dependent fraction of the consequentially lost profit margin. Consequences, limitations and possible objections to our proposed methods are discussed. Electronic supplementary material The online version of this article (10.1007/s11367-018-1507-z) contains supplementary material, which is avai...

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Section: Discussionmentioning

confidence: 99%

Quantification of corruption in preventative cost-based S-LCA: a contribution to the Oiconomy project

Croes¹,

Vermeulen²

2018

Int J Life Cycle Assess

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“…In addition, because for quantification of this local expenditure-dependent effect, expenditures on regionimported goods should be subtracted from the locally gained incomes; this positive can only be applied for poor and closed communities, for which data availability will probably be limited. Therefore, as aforementioned, we propose to assess as positive the employment in the 20% poorest countries only, and only if the aspects of the fair minimum wage (Croes and Vermeulen 2016b) and fair inequality (Croes and Vermeulen 2016a) are properly included in the assessment.…”

Section: Employment a Positive?mentioning

confidence: 99%

The assessment of positive impacts in LCA of products

Croes

Vermeulen

2020

Int J Life Cycle Assess

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Purpose The objective of this paper is to open a discussion on the implications and challenges of including positive impacts in LCAs of products and to propose a set of criteria for their inclusion in LCA in general and in the Oiconomy system in particular. Methods Using the existing literature, guided by the recent reviews by Di Cesare et al. (2018), Petti et al. (2016), and Ekener-Petersen et al. (Int J Life Cycle Assess 23(3):1–13, 2016) and our own experience and logic, we assess ethical and practical issues, shortcomings, potential inconsistencies, and problems of inclusion of positive impacts and propose criteria for inclusion of positive impacts in LCA. Results Discussed in relation to the inclusion of positive impacts in LCA are the conflicting descriptive and prescriptive character of LCA, the inclusion of internalities, considering “absence of negative impacts” as positive, measuring by status or by change and the therewith involved temporal scope, moral consequences of comparing positive and negative impacts to different stakeholder groups, the requirement of a capacity-raising character and maintenance of a positive impact, rebound effects, R&D, background and foreground data on positive impacts, and the inclusion of employment and product utilities as positive impacts. Based on this assessment, we propose a set of criteria for the assessment of positive impacts in life cycle assessment in general and especially of positive contributions in the “Oiconomy system”. Conclusions This study demonstrates several serious ethical and practical issues and challenges related to inclusion of positive impacts in LCA. An especially difficult question is how to interpret the economic concepts of “externalities” and “internalities” in relation to LCA. A special definition of in- and externalities for LCA purposes is proposed. The importance of a “capacity-raising” character of a positive impact is demonstrated, but also some of the difficulties of distinguishing capacity raising from maintaining the current status. Important outcomes are that for a consistent LCA, inclusion of most internalities and absence of negative impacts must be dissuaded, which also applies to employment and wages unless without a range of additional criteria. Great caution must be taken with inclusion of product utilities, comparing the positives for one stakeholder group with the negatives for another and mixing measurement by status with measurement by change.

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“…A minimum wage is more of a political instrument, based on the prevailing economic situation in a country at national scale. Ideally it should not be below the living wage, but most low-income countries do not have the political power and financial means for this (Croes and Vermeulen 2016). Based on their review, Croes and Vermeulen (2016) conclude that no agreed international system or standard is available for determining a fair minimum wage.…”

Section: Introductionmentioning

confidence: 99%

Living income benchmarking of rural households in low-income countries

Ven¹,

Valença²,

Marinus³

et al. 2020

Food Sec.

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The extreme poverty line is the most commonly used benchmark for poverty, set at US$ 1.90 by the World Bank. Another benchmark, based on the Anker living wage methodology, is the remuneration received for a standard work week necessary for a worker to meet his/her family’s basic needs in a particular place. The living wage concept has been used extensively to address incomes of plantation workers producing agricultural commodities for international markets. More recently intense discussion has emerged concerning the ‘living income’ of smallholder farmers who produce commodities for international supply chains on their own land. In this article we propose a simple method that can be used in all types of development projects to benchmark a rural ‘living income’. We launch the Living Income Methodology, as adapted from the Living Wage Methodology, to estimate the living income for rural households. In any given location this requires about one week of fieldwork. We express it per adult equivalent per day (AE/day) and data collection is focused on rural households and their immediate surroundings. Our three case studies showed that in 2017 in Lushoto District, rural Tanzania, the living income was US$ PPP 4.04/AE/day, in Isingiro District, rural Uganda, 3.82 and in Sidama Zone, rural Ethiopia, 3.60. In all cases, the extreme poverty line of US$ PPP 1.90 per capita per day is insufficient to meet the basic human rights for a decent living in low-income countries. The Living Income Methodology provides a transparent local benchmark that can be used to assess development opportunities of rural households, by employers in rural areas, including farmers hiring in labour, while respecting basic human rights on a decent living. It can be used to reflect on progress of rural households in low-income countries on their aspired path out of poverty. It further provides a meaningful benchmark to measure progress on Sustainable Development Goal 1, eliminating poverty, and 2, zero hunger and sustainable food systems, allowing for consideration of the local context.

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In search of income reference points for SLCA using a country level sustainability benchmark (part 2): fair minimum wage. A contribution to the Oiconomy project

Cited by 10 publications

References 25 publications

Quantification of corruption in preventative cost-based S-LCA: a contribution to the Oiconomy project

Quantification of corruption in preventative cost-based S-LCA: a contribution to the Oiconomy project

The assessment of positive impacts in LCA of products

Living income benchmarking of rural households in low-income countries

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