In search of income reference points for SLCA using a country level sustainability benchmark (part 1): fair inequality. A contribution to the Oiconomy project

Abstract

Purpose This paper is part 1 of our twin articles on income reference points for Social Life Cycle Assessment (SLCA). Preventative costs based LCA systems, such as the EcoCost system and the Oiconomy system, need targets (performance reference points) to determine the marginal preventative costs, the costs of the most expensive measure that globally needs to be employed to reach the target. To extend the EcoCost system for social issues, targets are required for issues like fair wages and fair inequality of wages, issues for which no agreed standard, no effect level or target exists. One way of setting targets is to take best practices as benchmark, e.g. the practices of a group of best performing countries. The purpose of this part 1 article is to first develop a well-founded benchmark group of the 20 % best performing countries and thereafter propose a well-founded target for the issue of inequality for preventative costs based SLCA, which can also serve as performance reference point for SLCA in general and for other uses. In part 2, for the same purposes and using the same benchmark group, we propose targets for fair minimum wages for every country. Methods A benchmark group of countries for the setting of targets was determined by an assessment of available country performance indicators, based on 5 criteria. Thereafter, we derived a proposal for a maximum inequality ratio based on existing democratically determined inequality ratios in the benchmark group.

Substantiating the rough consensus on the concept of sustainable development as a point of departure for indicator development

“…This translates to tax evasion and tax avoidance as corporate behaviours, which deprives developing countries from substantial incomes, which are needed for their development (Hollingshead, 2010;Makunike, 2015;Verstappen et al, 2016). The issue of inequality is also only sometimes addressed in measurements of corporate or product sustainability, but practical methods have recently been proposed (Croes and Vermeulen, 2016).…”

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

“…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.…”

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

“…First, we will explain the lower side then the threshold point and finally the higher side. We propose a method based on the available internationally agreed conventions on human rights and labour conditions and on the minimum wage practices in a benchmark group of the 20 % top performing countries, using a benchmark group, earlier proposed by (Croes and Vermeulen 2016). Thereafter, a concrete fair minimum wage could be proposed for 183 countries as PRP in SLCA in general.…”

“…Part one of our twin articles on income standards (Croes and Vermeulen 2016) gives a short introduction on the principles of the preventative costs-based EcoCost LCA system (Vogtländer et al 2000) and the Oiconomy system (Croes and Vermeulen 2015). We will here limit ourselves to a very short explanation of the most important concepts.…”