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

Abstract

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...

Evaluating the challenges to Life Cycle Assessment using Best‐Worst Method and Decision‐Making Trial and Evaluation Laboratory

“…This is the consequence of the challenges “Hesitant nature of organization (C42)” and “Absence of external stakeholder pressure (C45).” Lack of commitment may be due to unawareness of LCA and poor environmental concern. A study by Croes and Vermeulen 53 highlights that continuous management commitment is essential in carrying out LCA in the long run of environmental concern industrial activities. Next important challenge is “Variation in assessment time (C13).” It is due to problem with the data quality.…”

Piloting Oiconomy Pricing: First experiences of producers applying full cost sustainability assessment of products

“…However, in the absence of foreground preventative costs, the tool provides default (‘background’) data, which are based on either internationally determined conventions, science or benchmarks. Many of the details of the method are described in the published articles (Croes, 2021; Croes & Vermeulen, 2015, 2016a, 2016b, 2019, 2020, 2021). In addition, a science document with an explanation and justification is available online (see Section 2.1).…”

“…If the company cannot provide this, the method provides default preventative costs. The methodology for establishing these default values was elaborated with state‐of‐the‐art reviews and checks on data quality of existing global databases for examples of social impact indicators, including fair wages, levels of inequality and corruption prevention (Croes & Vermeulen, 2016a, 2016b, 2019). There are two forces in the system to challenge users to increase the development of and the use of foreground data: first, the background ‘Eco Social Cost Unit’ (ESCU) is based on marginal preventative costs and worst cases, which are usually higher than foreground ESCUs (like explained in Croes & Vermeulen, 2015); second, fully foreground ESCUs are equal to the real extra costs (without margins) for the sustainable version of the specific product and end‐producers who apply Oiconomy Pricing are likely to push their suppliers to provide these data, as these show better which efforts to improve have been taken in the value chain.…”

Social Life Cycle Assessments: A Review on Past Development, Advances and Methodological Challenges

“…Checklist methods use ticks and dashes to declare, for example, the presence of an impact [75]. This method cannot display the magnitude of impacts, which is why it is preferably used to narrow down the list of potentially relevant sub-categories and indicators to those that are most relevant for a specific stakeholder category (according to that stakeholder category) or to define the importance of one impact category over another [43,124].…”

“…In contrast to the checklist and scoring methods, database methods do not involve participatory approaches but rather use databases such as SHDB or PSILCA and social risk levels (low, medium, high or very high risk) of countries, sectors or stakeholders [43,124]. These generic methods are criticized for their lack of specificity and lacking inclusion of positive impacts.…”