PR.4 Identify sustainability hotspots across the value chain



To know where eco-innovation is most needed and generate the biggest improvements in overall sustainability performance, by identifying ‘sustainability hotspots’.


A list of specific environmental, social and economic impacts that occur across the value chain.


Identification of the sustainability hotspots that occur across the value chain, used in the activities PR.6 Develop a value chain vision and ST.6 Update the sustainability hotspots.



Create the life cycle inventory


Prepare a life cycle inventory diagram that shows each of the main activities that occur in each phase of the product life cycle (Raw material extraction, Production, Transportation, Use, and End-of- life), the physical inputs to each activity (use of material, water, energy) and the outputs of each activity in terms of the ‘Product outputs’ (intermediary products and by-products) and ‘Emissions’ (emissions to air, water and soil).


Decide which of the activities you will include in your analysis and which you will not. Use these decisions to draw the ‘Life cycle boundary’ on your life cycle inventory diagram.


Using the life cycle inventory diagram and the life cycle boundary you have selected, fill in the first four columns of the Life Cycle Thinking template, which capture the key physical inputs and outputs throughout the five major life cycle stages.

Identify the life cycle impacts and sustainability hotspots


Using the life cycle inventory, fill in the remaining columns of the Life Cycle Thinking template with corresponding environmental, social and economic impacts that occur across the value chain, proceed- ing activity by activity. Note that the social impacts are categorised by stakeholder, as follows:

  • On workers – Examples of possible social impacts on workers include: health & safety, wages, social benefits, working
    hours, child labour, forced labour, discrimination, freedom of association and collective bargaining, employment relationship, training and education, work-life balance, job satisfaction and engagement, and gender equality
  •  On customers/consumers – Examples of possible social impacts on customers and consumers include: health & safety, gender equality, experienced well-being, and privacy.
  •  On other stakeholders – Examples of possible social impacts on other stakeholders include: health & safety, noise, odours, access to tangible resources, local capacity building, employment, and community engagement
  • Rate each of the sustainability impacts you have identified using the scale ‘Low’, ‘Medium’ and ‘High’ impact. These ratings should be based on your understanding of how significant the impacts and will be, although these ratings will be quite subjective at this stage. Any impact that must be controlled to comply with local or international legislation relevant to companies in the value chain, or the conditions of a permit, should automatically be given a ‘High’ rating. This is indicated in the example below by the letter in brackets, where: H= High, M= Medium, L=Low. A ‘+’ sign indicates a positive sustainability impact


Decide where the sustainability hotspots are by:

  • Identifying cells of the Life Cycle Thinking matrix that contain several different medium or high-rated impacts.
  • Identifying activities that lead to several different medium or high-rated impacts.


Make a note of the sustainability hotspots you have identified.

Tips & Tricks


If you are struggling to identify sustainability impacts consider the following prompts:

  • Where and when are the most signi cant costs incurred across the life cycle of the product?
  • What are the most signi cant resources (energy, materials
    and water) consumed throughout the product life cycle?
  • Where are resources being wasted or underutilized?
  • Where are there toxic chemicals used and how are they prevented from impacting the environment or human health?
  • How does the product value chain impact on local stakeholders?
  • Are there some positive impacts as well as the negative?


This activity is intended
to be completed through desk research. you should not contact prospective client companies during this activity to help gather information as there will generally be other sources and making contact too early may frustrate the potential client and make them less willing to engage with you at a later stage.


Try to make the impacts you capture as specific and detailed as possible.


Remember that impacts can be positive as well as negative. For example, “Jobs secured at factory” is a positive social impact that could be captured in the Production phase.


An activity can have multiple types of sustainability impact. In these cases list the activity and its impact in each of the relevant cells

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