The climate crisis is no longer a future threat: it is our present reality. 2025 greeted us with an alarming figure from the World Meteorological Organization (WMO): the global temperature exceeded pre-industrial levels by 1.55°C[1], a figure that sets off every alarm for the business sector.
This figure, according to the Intergovernmental Panel on Climate Change, warns of “climate-related risks to health, livelihoods, food security, water supply, human security, and economic growth” [2].
Faced with this scenario, corporate sustainability is no longer optional. Organizations seeking to remain competitive need practical and effective tools to measure, manage, and reduce their environmental impacts. This is where Life Cycle Assessment (LCA) emerges as a comprehensive solution for corporate environmental management.
Considering that this indicator represents just one of the environmental impacts of Climate Change, it is possible to understand the magnitude of the global environmental crisis. However, in many cases this information does not translate into action because companies and their leaders, who are key actors in sustainable or unsustainable development, understand environmental effects as factors unrelated to their day-to-day priorities and as the exclusive responsibility of governments.
This stance, in addition to limiting the ability to provide timely solutions with a broader impact to contribute to environmental care and social well-being, represents a threat to the companies themselves. Extreme climate phenomena affect infrastructure and logistics, generate resource scarcity and rising costs, affect all aspects of people’s health and performance, and, in short, are incompatible with long-term economic growth.
Why is LCA crucial for your company in 2025?
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Optimizes operating costs and resource efficiency.
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Strengthens the sustainable supply chain.
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Improves access to international markets.
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Attracts responsible investment and green financing.
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Prevents climate risks in operations.
With Life Cycle Assessment as a guide in your organization, you will understand the importance of everything from the initial evaluation to process optimization, backed by real examples that demonstrate its impact on the financial and corporate sustainability areas.
What is life cycle assessment (LCA)?
According to ISO 14040, which sets out the principles and framework of the LCA, this technique addresses the potential environmental aspects and impacts from cradle to grave [3] of the element under study (product, event, service).
In this way, the inputs and outputs of the system are analyzed, addressing everything from the extraction of the required raw materials (cradle) to the final disposal or recycling of the product (grave), taking into account its consumption of resources (energy, water, raw materials), and, depending on the environmental impact to be studied, its contribution to air, water, and soil pollution, its possible effects on biodiversity, the waste generated, and the emission of greenhouse gases (GHG).
How is a life cycle assessment carried out?
There are four phases:
(i) Definition of the goal and scope.
(ii) Inventory analysis.
(iii) Environmental impact assessment.
(iv) Interpretation.
By developing these phases, a systemic view of the workflow related to the object of study will have been obtained, and, as a result, indicators of the environmental impacts analyzed. This will allow companies to identify areas for improvement and critical points backed by specific data.
Thanks to this, it will be possible not only to evaluate the impacts of the object of study and determine whether it meets environmental requirements, but also to proceed to manage its environmental performance and optimize the critical points with the greatest impacts, deficiencies, and operating costs for companies.
How does life cycle assessment integrate into corporate environmental management?
In this way, Sustainability and Optimization align to:
(i) Make appropriate use of resources.
(ii) Identify inefficiencies in processes and maximize their productivity.
(iii) Improve supply chain logistics.
(iv) Evaluate suppliers.
(v) Minimize waste and close cycles.
This is why being able to make decisions in accordance with the goal and scope defined in the LCA represents an opportunity for the sustainable development of companies, giving them a strategic rather than reactive position in the face of global risks, feedback in the design of products and processes, performance tracking indicators, and the ability to ensure that their environmental claims are transparent for their positioning.
You may also be interested in: 3 keys to avoiding Greenwashing and Socialwashing✅
Success story: Sustainability, Innovation, and Competitiveness.
A benchmark in integrating sustainability as a key aspect of competitiveness is Natura, whose business model has focused on ensuring that the environmental (and also social) impacts of its activities are identified, evaluated, and managed across its value chain.
Following the principles of Life Cycle Assessment, it has stood out for its strategies ranging from product development —with plant-based ingredients and renewable or recycled packaging— to the implementation of reverse logistics in the post-consumer stage for waste management.
In addition, Natura has gone a step further in sustainability and innovation. It not only integrates it into its products and strategies, but has also developed a pioneering management tool: IP&L (Integrated Profit & Loss). This model measures its performance by taking into account the environmental and social effects across the entire value chain—from the origin of raw materials to the post-consumer stage—and translates them into financial terms. “According to the 2022 results, for every R$1 in revenue, Natura generated a net return of R$2.7 in benefits”[4].
In addition, when evaluating its financial efficiency in the production and sale of products, “Natura &Co recorded a solid gross margin expansion of 340 basis points (bps) in Latin America compared to the third quarter of 2023”[5], demonstrating that comprehensive sustainability management strengthens performance and financial results.
Why carry out a life cycle assessment?
All of the above aspects demonstrate that LCA can represent operational and brand competitive advantages, but it also opens the door to access to international markets and capital. In fact, according to the Private Equity Industry Report in Colombia 2023-2024 prepared by @Deloitte and @ColCapital, “At the end of 2023, 96.7% of private equity funds consider environmental, social, and corporate governance (ESG) aspects when making investment decisions” [6].
As the Climate Emergency advances, all these criteria will become a requirement for the survival of companies, which is why acting now still represents a crucial decision to benefit from it as an opportunity and to anticipate its effects.
This is why at CarbonBox we work to facilitate and accelerate the climate transition. If you are looking to implement Life Cycle Assessment to manage your impacts and manage your Carbon Footprint,Contact us now here.
References
[1] World Meteorological Organization. (2025). The World Meteorological Organization confirms that 2024 was the warmest year on record, exceeding pre-industrial levels by about 1.55 °C. Available at: https://wmo.int/es/media/news/la-organizacion-meteorologica-mundial-confirma-que-2024-fue-el-ano-mas-calido-jamas-registrado-al
[2] Intergovernmental Panel on Climate Change (IPCC). (2018)** Special Report on Global Warming of 1.5 °C: Summary for Policymakers.. p. 11. Available at: https://www.ipcc.ch/site/assets/uploads/sites/2/2019/09/IPCC-Special-Report-1.5-SPM_es.pdf
[3] International Organization for Standardization. (2006). ISO 14040:2006 - Environmental management - Life cycle assessment - Principles and framework.
[4] Natura &Co. (n.d.). Management by Impact – IP&L. Available at https://ri.naturaeco.com/en/management-by-impact-ipl/
[5] Forbes Staff. (2024). Natura &Co revenue grew 18.5% in the third quarter of the year. Forbes Perú. Available at https://forbes.pe/negocios/2024-11-12/ingresos-de-natura-co-crecieron-en-185-en-el-tercer-trimestre-del-ano
[6] Deloitte & ColCapital. (2023-2024). Private Equity Industry Study in Colombia 2023-2024. Available at: https://www2.deloitte.com/co/es/pages/finance/articles/estudio-industria-de-capital-privado-en-colombia-2023-2024.html