Hotspots Analysis An overarching methodological framework and guidance for product and sector level application
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Hotspots Analysis An overarching methodological framework and guidance for product and sector level application
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Hotspots Analysis An overarching methodological framework and guidance for product and sector level application
Acknowledgements
Publisher
This document has been published by the UN Environment, Economy Division with the support of
WRAP.
Supervision
Llorenç Milà i Canals (UN Environment, Economy Division),
Feng Wang (UN Environment, Economy Division)
Bettina Heller (UN Environment, Economy Division)
Authors
Mark Barthel (3Keel LLP – Flagship project co-chair)
Jim Fava (Anthesis – Flagship project co-chair)
Keith James (WRAP)
Alex Hardwick (thinkstep)
Sofia Khan (EY LLP, India)
Contributors and reviewers (in alphabetical order)
Curtis Harnanan (Anthesis)
Giorgio Bagordo (WRAP)
Mary Ann Curran (BAMAC)
Sanjeevan Bajaj (FICCI)
Design and layout
Thad Mermer
We gratefully acknowledge the support of:
This report is supported by the International
Climate Initiative (IKI). The Federal Ministry for
the Environment, Nature Conservation, Building
and Nuclear Safety (BMUB) supports this
initiative on the basis of a decision adopted by
the German Bundestag.
2 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application
Table of Contents
Acknowledgements 2
List of figures and tables 6
Glossary of terms 7
Executive summary 9
1. INTRODUCTION 12
1.1 About the project / study 13
1.2 Audience for this methodological framework and required skill set 14
1.3 Guiding principles 15
2. HOTSPOTS ANALYSIS: GENERAL STEP-BY-STEP PROCESS 16
Step 1 19
Output 19
Key actions 19
More detail 19
Case Study 1: Product Sustainability Forum 21
Case Study 2: Stakeholder identification within ISO14001: 2015 and the International
Finance Corporation (IFC) 26
Step 2 28
Output 28
Key actions 28
More detail 28
Case Study 3: Data gathering for a sector. The American Public Gardens Association. 30
Case Study 4: European Commission- UN Environment Eco-Innovation Project 31
Step 3 32
Output 32
Key actions 32
More detail 32
Case study 5: Identifying and Validating Hotspots through the EU Environmental Footprint
Initiative and WRAP Courtauld 2025 34
Step 4 35
Output 35
Key actions 35
More detail 35
Case Study 6: Food and Drink Products 36
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 3
Step 5 38
Output 38
Key actions 38
More details 38
Case Study 7: Prioritising actions through ISO14001: 2015 40
Case Study 8: Prioritizing Value Chain Interventions 40
Step 6 41
Output 41
Key actions 41
More detail 41
Case Study 9: Association of Home Appliance Manufacturers (AHAM) and the Water
Quality Association (WQA) 42
Step 7 43
Output 43
Key actions 43
More detail 43
Case Study 10: Opportunity, Communication and Validation through Collaboration 44
Step 8 47
Output 47
Key actions 47
More details 47
Case Study 11: International Aluminium Institute 49
3. HOTSPOTS ANALYSIS: APPLICATIONS AND LIMITATIONS, SECTOR
AND PRODUCT GUIDANCE WITH CASE STUDIES 50
3.1 Hotspots Analysis applications and limitations 51
3.2 Sector level supplementary guidance 52
Step 1: Define, clarify and solicit agreement of the goal and scope 52
Step 2: Gather data, seek expert insight, knowledge building and analysis 52
Step 4: Respond to data and stakeholder gaps 53
Step 5: Identify and prioritize actions 53
3.3 AHAM: sector case study 54
Step 1: Define, clarify and solicit agreement of the goal and scope 54
Step 2: Gather data, seek expert insight, knowledge building and analysis 58
Step 3: Identify and validate hotspots 58
Step 4: Respond to data and stakeholder gaps 60
Step 5: Identify and prioritize actions 60
Step 6: Review initial findings 61
Step 7: Presentation and communication 61
Step 8: Revisit hotspots and actions identified 62
4 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application
3.4 Product level supplementary guidance 63
Step 1: Define, clarify and solicit agreement of the goal and scope 63
Step 2: Gather data, seek expert insight, knowledge building and analysis 63
Step 5: Identify and prioritize actions 63
3.5 The Sustainability Consortium: product case study 64
1. Define the product category (Hotspots Methodology Step 1) 64
2. Review scientific sources (Hotspots Methodology Step 2) 65
3. Research hotspots and 5. Evaluate the evidence (Hotspots Methodology Step 3 & 4) 65
4. Research improvement Opportunities (Hotspots Methodology Step 5) 67
5. Key Performance Indicators (KPIs) 67
6. Multi-stakeholder review (Hotspots Methodology Step 6) 67
7. Publish the toolkit (Hotspots Methodology Step 7) 67
8. Update and revise the toolkit (Hotspots Methodology Step 8) 67
4. ANNEXES 68
ANNEX 1: Background and context to Hotspots Analysis 69
A1.1 About Hotspots Analysis 69
A1.2 Distinctions between Hotspots Analysis and Life Cycle Assessment 69
A1.3 Benefits of Hotspots Analysis 70
A1.4 Hotspots Analysis and the Sustainable Development Goals 70
A1.5 Related techniques and tools for assessment 71
ANNEX 2: Workshops and webinars organized by the Project Group 73
ANNEX 3: Methodology used for the Phase 1 study 74
Step 1: Shortlisting and screening of existing hotspots analysis methodologies for
preliminary selection 74
Step 2: Further review of selected methodologies for secondary selection 74
Step 3: In-depth assessment and segmentation of selected methodologies 74
Key Insights from the study 77
Key stakeholder feedback 77
Versatility and flexibility of hotspots analysis 78
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 5
List of figures and tables
Figures
Figure ES1 Eight key steps common to Hotspots Analysis 10
Figure 1 Methodological Framework process steps 17
Figure 2 Defining, clarifying and soliciting agreement of the goal and scope 19
Figure 3 Example boundary diagram – product category level study 20
Figure 4 Example boundary diagram – sector level level study 20
Figure 5 Common sources of data or information used in hotspots analysis 24
Figure 6 Options for identifying hotspots 33
Figure 7 Moving from a long list of actions to a short list 39
Figure 8 Principles of communication & visualisation of results from a hotspots analysis study 44
Figure 9 Correlation between back fat and weight 44
Figure 10 Example Study Boundary Diagram – sector activity level 53
Figure 11 Key elements of the stakeholder engagement process undertaken by AHAM 56
Figure 12 Translating results from life cycle screening, inputs from stakeholders
and guiding principles into a standard 56
Figure 13 AHAM’s process for the identification and validation of hotspots 59
Figure 14 The multi-attribute sustainability certification available for download 61
Figure 15 Example certificate of compliance 62
Figure 16 Example Study Boundary Diagram – product category level 63
Figure 17 Overview of TSC’s development process 64
Figure 18 Application of Hotspots analysis: different data sources and example study outputs 69
Figure 19 UN Sustainable Development Goals 70
Tables
Table 1 Methodological steps in Hotspots Analysis and associated key actions 18
Table 2 The split of life cycle stages in 3 different approaches 29
Table 3 Sustainability issues covered in the APGA on-line survey 30
Table 4 Validating and prioritizing hotspots 59
Table 5 TSC Source Quality Matrix 65
Table 6 TSC’s Impact Classification 66
Table 7 Summary of findings of the shortlisted HSA Methodologies 75
6 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level applicationGlossary of terms
Characterisation model: A model which describes Life Cycle Thinking: Life Cycle Thinking (LCT)
the relationship between individual data points is about going beyond the traditional focus on
sometimes referred to as “inventory data” (e.g., production site and manufacturing processes
consumption of resources, emissions, wastes, to include environmental, social and economic
employment data, economic costs) and an impact impacts of a product over its entire life cycle.
or indicator (e.g., climate change, biodiversity, staff
training and education, households in poverty). Methodological Framework: A Methodological
The characterisation model yields characterisation Framework outlines key steps that are common
factors that are used as multiplication factors to to hotspots analysis at any scale of application
convert inventory data to a single indicator result. (including but not limited to national, city,
sectoral, product category, product specific).
Data Quality: Characteristics of data such This framework is not a standard operating
as age, technological, geographical and procedure but is aimed at embedding a certain
temporal representativeness, specificity and level of consistency of approach to hotspots
comprehensiveness that determine their ability to analysis, despite its application. This framework
satisfy stated requirements. is also meant to be the basis for more specific
guidance that will be developed for various levels
Functional Unit: A measure of the function of the of application.
studied system to which inputs and outputs can
be related. Normalisation: The process by which impact
assessment results are multiplied by factors that
Hotspot A life cycle stage, process or elementary represent the overall impact per reference unit (e.g.,
flow which accounts for a significant proportion of a country, an average citizen). Normalised results
the impact of the functional unit. express the relative shares of the impact(s) of the
hotspots analysis in terms of the total contributions
Hotspots Analysis: The rapid assimilation to each impact category per reference unit.
and analysis of a range of information sources,
including life cycle based studies, market, and Sensitivity analysis: A technique to determine
scientific research, expert opinion and stakeholder how different values of an independent variable
concerns. The outputs from this analysis can influence the results of a hotspots analysis. This can
then be used to identify and prioritise potential be used to provide an assessment of confidence
actions around the most significant economic, in the results, in this case that a hotspot has / has
environmental and social sustainability impacts or not been identified.
benefits associated with a specific country, city,
industry sector, organization, product portfolio, Shall, should and may: This Guidance uses
product category or individual product or service. precise terminology and distinguishes between
Hotspots analysis is often used as a pre-cursor to requirements and recommendations, (i.e.,
developing more detailed or granular sustainability between the words ‘shall’, ‘should’ and ‘may’).
information. Terminology is based on ISO/TS 14072 and ISO
14044/ISO 14040, in that order. ‘Shall’ is only used
Life Cycle Assessment: Life Cycle Assessment when this strength of obligation is also required
(LCA) is a tool for the systematic evaluation of the in the aforementioned standard documents,
environmental aspects of a product or service while ‘should’ is used to identify recommended
system through all stages of its life cycle. elements that can be disregarded with proper
justification. Finally, ‘may’ is used for other allowed
elements or alternatives.
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 7Stakeholders: The term stakeholders covers Uncertainty analysis: A systematic procedure to
anyone who has a direct or indirect interest in quantify the uncertainty introduced in the results of
the project or organization in question as they a life cycle inventory analysis due to the cumulative
can affect or are affected by the activities that effects of model imprecision, input uncertainty and
take place. Stakeholders include, amongst data variability (ISO14040:2006)
others, employees, customers, suppliers,
communities, shareholders, governmental and
non-governmental organizations. The definition
of key stakeholders may vary, however, in this
guidance key stakeholders are considered to be:
• Those most directly affected by the outcomes
of the activities that take place. Other
stakeholders would be those more indirectly
affected by the outcomes or those whose
interests define them as stakeholders, but who
are not directly affected.
• Those likely to be able to contribute positively
throughout the process given their experience
or previous involvement with the sector/
product(s).
• Those who may potentially be a hindrance to
action if they are not satisfied with the outcomes
of the process.
Key stakeholders should be involved in the
process at every stage, as opposed to a broader
group of stakeholders who may be involved at a
smaller number of defined points in the process
where their input is relevant.
8 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level applicationExecutive summary
The information age has led to a proliferation However, there is not currently a common global
of content, ranging from the assimilation and approach to hotspots analysis; nor has there been
analytical challenges associated with ‘big data’ any effort to gather or share best practice among
through to ever-expanding publication lists of the organisations or initiatives currently developing
research and innovation findings. The major and using these methods. Nor is there any
challenge for businesses, policy makers, academic accepted guidance on how to translate and apply
researchers and consumers is deciding where and the results of hotspots analysis into meaningful
how to act in order to have the maximum impact. sustainability information and insight for use by
For any action, a balance must be struck between industry, governments and other stakeholders.
speed of response and pragmatism, and also the
need to be informed by reliable and trustworthy This situation may result in a range of negative
science-based evidence. impacts, including: a lack of consistency in
methodological approach, difficulties in comparing
A growing number of different analytical the results of hotspots studies, and the potential
disciplines are using a prioritization method for conflicting sustainability information in the
called ‘hotspotting’, or ‘hotspots analysis’. It is marketplace. Recognising this, the UNEP/SETAC
being used to filter and distil often large volumes Life Cycle Initiative1 established a new Flagship
of information to identify and prioritise hotspots Project (FSP 3a) to address these and other issues
for further investigation or action by industry, in 2013.
governments and other stakeholders. This may
include piloting or implementing actions on the The principal objectives of this Flagship Project are:
basis of the findings from the hotspots analysis.
1. To produce a common methodological
Hotspots analysis is being used around the world framework and global guidance for sustainability
to address significant sustainability challenges by hotspots analysis;
helping to provide focus in an era of information 2. To produce a protocol for the appropriate use
overload. Case studies are provided in this and communication of sustainability information
document. derived from hotspots analysis.
When applied to Life Cycle Assessment, the This document has been prepared in response to
benefits of hotspots analysis include ensuring: the first of these objectives. The second objective
was addressed through the development of
• focus on priority issues (e.g., waste, water, the hotspots analysis communication guidance
materials of concern); document titled “Communicating hotspots: The
• focus on the right life cycle stage (e.g., material effective use of sustainability information to drive
acquisition, manufacturing, use, end of life); action and improve performance” (this can be
• focus on the right actors (e.g. producers, found on the WRAP website ). Both documents
manufacturers, suppliers, retailers, customers, have been prepared jointly with the Consumer
government officials) to evaluate, influence and Information Programme of the 10-Year Framework
implement solutions; of Programmes on Sustainable Consumption and
Production (10YFP CI-SCP2) , which supports
• implications of trade-offs are understood; and,
the provision of quality information on goods and
• resources (e.g. time, money) can be effectively services to engage consumers in sustainable
allocated to actions. consumption.
1 http://lifecycleinitiative.org
2 http://www.scpclearinghouse.org/consumer-information-scp
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 9The methodological framework provides opportunity for improvement against an impact
information useful to those wishing to commission occurs, rather than communicating a precisely
or carry out a hotspots analysis in a life cycle quantified current impact. Other organisations
context. However as a framework, rather than (e.g. trade associations) may wish to offer more
a standard, it provides a degree of flexibility to specific guidance on implementing hotspots
enable hotspots analysis to be used in different analysis for their own sectors based upon this
circumstances. The specific directions given for framework.
varying situations (e.g. assessment of hotspots
for products, sectors) underscore that there is no This methodological framework aims to support
‘one-size-fits-all’ application of hotspots analysis. those wishing to commission, conduct or use
The framework aims to be equally applicable to hotspots analysis studies – including stakeholders
businesses, governments and other organisations of the 10YFP – in their efforts to prioritize their
(e.g. NGOs and academic institutions) as well as actions and accelerate a shift towards Sustainable
individual researchers. Consumption and Production (SCP). The audience
for the use of this framework includes practitioners
It aims to provide a consistent approach to hotspots and technical experts, stakeholders, developers,
analysis. As an action-oriented methodology, the and participants in the development of hotspots
key outcome is to identify where the greatest analysis methodology.
1 Define Goal
and Scope
8 2
Review and Gather data,
revisit hotspots seek expert
analysis insight
7 3
Present and
Iterative Identify and
communicate to a
validate hotspots
wider audience process
6
Review and validate
4
Respond to data
findings with key
and stakeholder
stakeholders and
gaps
experts
5 Identify and
prioritize actions
Figure ES1: Eight key steps common to Hotspots Analysis
10 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level applicationThe skill set required to use this methodology does This framework outlines the eight key steps that
vary depending on the role and type of expertise are common to hotspots analysis (Figure ES1).
being brought to the identification process for the
hotspots analysis. However, it is expected that The steps follow the Deming Cycle (Plan, Do,
users have: Check, Act); and like this cycle, hotspots analysis
is an iterative approach. Though the steps naturally
• some familiarity with life cycle thinking and/or form a sequence, there will be a need to revisit
value chain thinking and methods; steps in the process in order to refine the analysis
• a reasonable understanding of the quantitative as it develops. For each step, the outputs and key
and/or qualitative impacts relevant to the scope actions are detailed, as well as case studies to
of the hotspots analysis; help frame each step.
• some knowledge of the interventions being
This methodological framework is also developed
considered or taking place in relation to the
with a sustainability mind set. Hotspots analysis
hotspots identified in the study;
methodologies typically use a life cycle thinking
• some experience of systems thinking and the approach, while providing the flexibility to take
ability to make linkages (lateral/holistic thinking); into consideration quantitative and qualitative
• some experience of facilitating multi- data and information drawn from a range of
stakeholder studies, including consensus sources (e.g. scientific research, market studies),
building around study priorities and/or actions and acknowledge the views and priorities of key
to be taken to address hotspots; and, stakeholders involved in – or likely to be affected
• the ability to interpret and understand the by – the findings from a study. This allows
findings from a hotspots analysis study and for the results of the hotspots analysis to be
use this information to make well-informed comprehensive and collaborative. It also allows for
decisions about required actions. a focus on action-orientated approaches which
reflect the hotspots identified, and seeks to find
For those less familiar with these issues, the best ways to address them.
the methodological framework provides the
information, terminology and insights required The end of the report presents two supplementary
to engage specialists or external experts as guidance modules which address issues specific
appropriate. to hotspots analysis carried out at a product and
a sector level. They cover points of differentiation
which apply to individual steps, and should
be used in conjunction with the overarching
methodological framework.
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 111. Introduction 12 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application
1.1 About the project / study
The project constitutes the second phase from around the world. For an overview of the
of the Life Cycle Initiative Flagship Project methodology used for the Phase 1 study and a
3a - ‘Hotspots Analysis and Sustainability summary of the findings of the shortlisted Hotspots
Information’ and contributes to the work plan of Analysis Methodologies see Annex 3.
the Consumer Information Programme of the 10
Year Framework of Programmes on Sustainable Phase 2 of the project, which began in March
Consumption and Production (10YFP). This report 2016, builds on the research undertaken during
has been financed by the Life Cycle Initiative Phase 1 and seeks to create an overarching
and the project “Advancing and measuring methodological framework for hotspots analysis
sustainable consumption and production (SCP) with more detailed guidance on how to conduct
for a low-carbon economy in newly industrialised sector and product category hotspots analysis;
countries (Advance SCP)”. The Advance SCP and on the appropriate use and communication of
project is part of the International Climate Initiative sustainability information derived from these two
(IKI). The Federal Ministry for the Environment, levels of application. It should also be noted that
Nature Conservation, Building and Nuclear Safety Phase 2 started with an assessment of a further
(BMUB) supports this initiative on the basis of a six hotspots analysis methodologies identified
decision adopted by the German Bundestag. after Phase 1 was completed.
Phase 13 of the project, which occurred Ultimately Phase 2 has produced:
between May and December 2014, involved the
identification and mapping of existing hotspots • A common methodological framework and
studies, initiatives, methodologies and tools global guidance for sustainability hotspots
analysis;
3 http://www.lifecycleinitiative.org/wp-content/uploads/2014/12/ • A protocol (guidance) for the appropriate use
UNEP-Hotspots-Mapping-Project-Final-Report-Phase-1.pdf
and communication of sustainability information
derived from hotspots analysis.
W
hile a tool on ‘hotspots analysis’ These tools will be used to evaluate and, if possible,
can be helpful in many regards, implement a range of options to bring together the
there is currently no common global findings from existing hotspots studies to provide
approach to hotspots analysis; nor has there a richer, global picture of sustainability hotspots in
been any effort to bring together or share the economy and society.
best practice amongst those organisations or
initiatives currently developing these methods.
Nor do any accepted principles or guidance
exist on how to translate and apply the results
of this hotspots analysis into meaningful
sustainability information and insight for use by
industry, governments and other stakeholders.
Source: The International Life Cycle Board of the Life Cycle
Initiative
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 131.2 Audience for this methodological
framework and required skill set
This Methodological Framework aims to support Skill Set
those wishing to commission, conduct or use
hotspots analysis studies, including the support The skill set of the users of this methodological
of stakeholders of the 10YFP in their efforts to framework would vary depending on their role
prioritize their actions to accelerate a shift towards and type of expertise they bring to the hotspots
Sustainable Consumption and Production (SCP); analysis identification process. However, it is
the audience for the use of this framework includes expected that users have:
practitioners and technical experts, stakeholders,
developers and participants of hotspots analysis • Some familiarity with life cycle thinking and/or
methodology development. This could include the value chain thinking and methods;
following: • A reasonable understanding of the quantitative
and/or qualitative impacts relevant to the scope
• Chief Sustainability Officers, company of the hotspots analysis (for all or some of the
sustainability/technical team members and life cycle or value chain phases; key activities
senior decision-makers (e.g., enterprise risk or processes relevant to the sector or product
management, innovation managers) who category in question);
are seeking to focus their resources on key • Some knowledge of some of the interventions
sustainability issues being considered or taking place in relation to
• Senior officials of non-governmental the hotspots identified in the study, in order
organizations (NGOs) working specifically in to help identify and prioritise any interventions
the area of hotspots analysis and their expert or actions to address the hotspots identified
team members during the study;
• Academics and researchers who work • Some experience of systems thinking and the
specifically on applied life cycle thinking, ability to make linkages (lateral/holistic thinking);
analysis and management approaches, • Some experience of facilitating multi-
including hotspots analysis stakeholder studies, including consensus
• Public policy-makers and government officials building around study priorities and the actions
who are seeking to use hotspots analysis to be taken to address any hotspots identified;
in evidence-based policy development and and
implementation as a way of prioritising their • The ability to interpret and understand the
activities and resources findings from a hotspots analysis study and
• Civil society bodies, professional institutes and use this information to make well-informed
industry trade associations who want to use decisions about the actions to be taken.
hotspots analysis to build consensus around
an agreed set of priority hotspots and the For those less familiar with these issues, the
actions required to address them Methodological Framework provides the
• Subject matter experts and consultants who information, terminology and insights required
want to use hotspots analysis to support to engage specialists or external experts as
relevant stakeholders and clients appropriate.
For some background and context to hotspots
analysis, including distinctions between Hotspots
Analysis and Life Cycle Assessment, see Annex 1.
14 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application1.3 Guiding principles
The design and application of this “overarching” • Comprehensive: (range of metrics) The
Methodological Framework for conducting analysis should cover all relevant aspects of
hotspots analysis shall be guided by the principles the life cycle relevant to the level of application
outlined below. (e.g., sector, product) for a range of indicators
which may or may not be considered in
This Methodological framework shall provide traditional LCA approaches (e.g., biodiversity,
guidance enabling hotspots analysis to be: ethical concerns).
• Usable: The emphasis of hotspots analysis is Whilst analysis of changes over time and updates
providing information that can be acted upon. to hotspots analyses shall be self-consistent, the
• Transparent: It must be clear what the purpose methodological framework provides flexibility. As
of the analysis is, what the data sources are, comparison is not one of the purposes of hotspots
how the analysis was undertaken and how analysis, different studies based on the same
the conclusions were reached. Confidentiality functional unit may take different approaches
requirements and any gaps in the evidence depending on the purpose of each study and
should be identified. specific circumstances (e.g., availability of data).
• Suitably/appropriately robust: The analysis Additionally, whilst developing this methodological
must be sufficiently robust to support the framework, it was realised that communication of
decisions that will be made based upon it. hotspots analysis also need a guidance. Thus,
a hotspots analysis communication guidance
• Inclusive: The analysis should ensure an open,
document titled “Communicating hotspots: The
participatory consultation with all interested
effective use of sustainability information to drive
stakeholders at relevant phases and shall be
action and improve performance” was developed
responsive to stakeholders needs (including
and released as supplementary material. The
cultural and geographical relevance; level of
hotspots analysis communication guidance
technical understanding and ability to make
document provides guidance on principles of
decisions and take action).
communication and visualisation, including
examples, and can be found on the Life Cycle
Initiative website4.
4 http://lifecycleinitiative.org
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 152. Hotspots Analysis:
general step-by-step
process
16 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application1 Define Goal
and Scope
8 2
Review and Gather data,
revisit hotspots seek expert
analysis insight
7 3
Present and
Iterative Identify and
communicate to a
validate hotspots
wider audience process
6
Review and validate
4
Respond to data
findings with key
and stakeholder
stakeholders and
gaps
experts
5 Identify and
prioritize actions
Figure 1: Methodological Framework process steps
The figure above outlines key steps that are standard documents, while ‘should’ is used to
common to hotspots analysis at any scale identify recommended elements that can be
of application5. It reinforces the fact that the disregarded with proper justification. Finally, ‘may’
approach is in line with existing standards, which is used for other allowed elements or alternatives.
follow the Deming Cycle (Plan, Do, Check, Act). It As a framework, ‘may’ is used where options are
is important to note from the outset that hotspots presented for completing each step. It forms the
analysis is an iterative approach. Though steps basis for more specific guidance that could be
naturally form a sequence, there will be a need to developed for various levels of application.
revisit steps in the process to refine the analysis
as it develops. Table 1 (p. 18) summarises the methodological
steps in Hotspots Analysis and the associated key
The Framework uses precise terminology actions.
and distinguishes between requirements and
recommendations (i.e., between the words ‘shall’, The pages that follow provide more details on
‘should’ and ‘may’). Terminology is based on ISO/ each of the eight key process steps within the
TS 14072 and ISO 14044/ISO 14040, in that overarching Methodological Framework for
order. ‘Shall’ is only used when this strength of hotspots analysis.
obligation is also required in the aforementioned
5 From national right down to product specific
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 17Table 1 Methodological steps in Hotspots Analysis and associated key actions
Methodological Key Actions
Step
1. Define goal & • Convene key stakeholders (internal or external) representing the sector / product / product category of interest.
scope • Clearly understand information you are ultimately seeking and how you will use the results of the hotspots
analysis.
• Identify the goal and scope of your project to better delineate the impacts within scope and the likely sources of
available data and information required to support the analysis.
2. Gather data, • Utilize both quantitative and qualitative sources of data.
seek expert • Quantitative data may come from a variety of sources including: full or partial life cycle assessments, primary
advice and secondary life cycle data (proxies if required), scientific reports, product or sector specific studies, market
analysis, etc.
• Qualitative information could come from non-technical reports or narratives from technical reports where data
is not accessible. Qualitative input and semi-quantitative data may also come directly from conversations with
experts and key stakeholders.
• Document these inputs within a spreadsheet or software program and generate the results in a simple graphical
output or matrix that would facilitate an understanding of the most significant life cycle impacts and also more
easily facilitate discussion and decision-making, especially among non-technical stakeholders.
3. Identify • Assemble key stakeholders, project team or Working Group and present results of the previous step.
and validate • Engage these stakeholders in a facilitated discussion that encompasses the degree to which each impact
hotspots identified occurs at each life cycle or value chain phase of the product or product category; or as a result of
specific sub-sector or sector-wide activities.
• Solicit agreement from stakeholders on the degree of impact, and based on collective expertise and professional
judgement – either validate or adjust the degree of impact based on the feasibility of affecting change or
reducing impact (i.e., influence of stakeholders, technical and commercial considerations, timing, cost,
environmental and social impact trade-offs, etc.)
4. Respond to • During meeting with Working Group, identify any gaps that will potentially hinder actions to address one or more
data and stake- impacts identified for action and develop recommendations to address these gaps.
holder gaps
5. Identify and • The heat-map or output of the hotspots analysis is not the “end game” but rather the “start of a conversation”
prioritize actions among the key stakeholders that leads to prioritization and selection of remedial actions.
• As part of conversation with key stakeholders or Working Group, identify and agree upon a list of initial actions
based on the results of the hotspots analysis.
• Clearly document any decisions on actions and priorities for reference.
6. Review • Provide written communication summarizing the results of your hotspots analysis, including proposed actions
and validate with all relevant stakeholders including those external to your Working Group.
initial findings • Invite all stakeholders to provide written feedback including validation of results and proposed actions, as well as
with key recommendations.
stakeholders &
• This phase of engagement may require a few weeks to allow stakeholders to have an in depth review and
experts
provide value-added feedback. It is important to plan for this time, and include perhaps an additional week
or two buffer time in order to obtain feedback from a critical number of key stakeholders or perhaps those of
particular concern (e.g., those who may potentially be a hindrance to action).
7. Disseminate • Convene Working Group to present and review written feedback received from all stakeholders.
findings • Discuss feasibility of each comment and determine whether it should be implemented, require further
information or should be parked for future consideration/implantation.
• Document agreed actions for each comment.
• Disseminate findings more widely to those stakeholders outside of the Working Group who are affected by them;
or able to implement or support impact reduction measures aimed at addressing identified hotspots.
8. Review and • Periodically review with Working Group or key stakeholders, the hotspots analysis, utilizing new information or
revisit hotspots data to validate previously identified hotspots and actions. This review may also be used to identify new life cycle
analysis hotspots.
• Any changes to hotspots analysis methodology, engagement of additional stakeholders, etc. should be evaluated
and implemented.
18 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level applicationSTEP 1 1 Define Goal
and Scope
Define, clarify and solicit
8 2
Review and Gather data,
revisit hotspots seek expert
agreement of the goal and scope analysis insight
7 3
Present and
Iterative Identify and
communicate to a
validate hotspots
wider audience process
6
Review and validate
4
Respond to data
findings with key
and stakeholder
stakeholders and
gaps
experts
5 Identify and
prioritize actions
Output Identify the goal and scope of your project to
better delineate the impacts within scope and the
The output of step 1 shall be a written goal and likely sources of available data and information
scope identifying the purpose of the hotspots required to support the analysis.
analysis, the issues to be addressed, the
boundaries of the analysis, the resources required More detail
and the approach to stakeholder engagement.
The goal and scope shall be defined, clarified and
Key actions agreed utilizing, wherever possible, a life cycle
approach, including identification of the target
Convene key stakeholders representing the audience for the hotspots analysis (stakeholder
sector/ product/ product category of interest. mapping and engagement) and gaining a good
understanding of their practical needs. Answers
Clearly understand information you are ultimately to the following questions (Figure 2) shall be
seeking and how you will use the results of the included within the recorded goal and scope.
hotspots analysis. These should be considered in an iterative,
parallel manner rather than sequentially.
What? How? Why?
A clear goal and scope is required to ensure
that from the outset all participants are clear
Who? Where?
on the purpose of the hotspots analysis. Why
is the study being undertaken? What is the
Goal and intended use and how will it be communicated
Why? Scope When?
to stakeholders? Do different stakeholders
have different information and communications
needs? For example, does the goal include:
Figure 2: Defining, clarifying and soliciting agreement of making subsequent improvements; informing
the goal and scope
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 19Raw materials Energy Labour Ancillary inputs
Raw Material Waste
Manufacturing Distribution Use
Extraction Management
Reuse
Study boundary
Emissions to air Emissions to water Solid waste
Figure 3: Example boundary diagram – product category level study
Raw materials Energy Labour Ancillary inputs
Material production Transport Use
Upstream Services
Waste
products or Management
services Buildings &
Equipment
Other practices
Emissions to air Emissions to water Solid waste
Figure 4: Example boundary diagram – sector-level study
product design; purchasing practices; road A life cycle approach should be taken where
testing solutions; providing the customer with the hotspots analysis covers issues from raw
guidance on how to use or dispose of a product material acquisition to the impact of the final
responsibly; developing a sector improvement consumer. This is to ensure that hotspots are
roadmap or standard, or; helping to narrow the not overlooked through omission. The level of
scope of a more detailed subsequent study? analysis required will depend upon the goals
of the study. For example, is the goal to get an
What? approximate understanding of where significant
impacts occur across the life cycle of a product,
This question aims to define the boundaries of or to obtain accurate data specific to a particular
the assessment. Clear boundaries are essential supply chain? Is it to identify the organisations
to ensure that appropriate information is obtained with the greatest impact or ability to affect change
and used within the analysis, and a diagram should in a sector?
be included as a clear way of communicating
the boundaries. Example boundary diagrams for The goal shall also outline the criteria for which
product and sector level studies are provided in hotspots will be assessed. While this need not
Figure 3 and Figure 4 respectively. necessarily specify impact categories to begin
with, it shall at least identify whether the study
20 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level applicationCASE STUDY 1: PRODUCT SUSTAINABILITY FORUM
This case study illustrates that the scoping of the assessment was
on environmental impacts which include greenhouse gases, energy
consumption, water use and waste. It is selected based on our expert
experience, the information available, and the suitability to give a
practical example.
WRAP works with the food and drink sector via Courtauld 2025,
a voluntary agreement with the clear goal of cutting the resources needed to provide our food
and drink by one-fifth over ten years. Signatories and Governments of the UK have expressed
a desire to reduce the environmental impact of products in the grocery sector. In order to better
understand where the greatest impacts occurred the Product Sustainability Forum, a collaboration
of organisations made up of grocery retailers and suppliers, academics, NGOs and UK Government
representatives, was established.
In 2013 they published ‘An initial assessment of the environmental impact of grocery products.’ This
met the requirement to identify and prioritise products and life cycle stages which contributed the
most to greenhouse gas emissions, energy consumption, water use and waste. A range of practical
materials to help the sector implement changes were subsequently produced in response to these.
Reference: http://www.wrap.org.uk/content/product-sustainability-forum
is considering social, environmental, ethical, potential and water footprint. However, for many
governance or other issues and how these issues, such as biodiversity or land use change,
will be determined. These decisions will inform there is no commonly agreed method. It is likely that
the type of quantified / qualitative information in such cases the hotspots analysis will be qualitative
which will be required for the analysis, which or criteria will be specific to that study. Users
may or may not align with a traditional LCA should also be aware of the Life Cycle Initiative’s
approach. Subsequently, the impact categories on-going work on Environmental Life Cycle Impact
and assessment methods shall be agreed – a Assessment Indicators (Flagship Project 1b7) is
number of methods that can be used for the aiming to harmonise and improve methods in some
identification of impact categories are explored of these areas, including biodiversity, human health
below. Users should look to draw up a “long and resource consumption.
list” of impact categories using some or all of
the methods described below, before prioritising Examples of environmental, social and economic
these based on input from a group of selected indicators used in LCA and their definitions can
relevant stakeholders. be found in Dreyer et al (2010) Ekener-Petersen
and Finnveden (2012) and Goedkoop et al (2009).
Impact Categories
For social, economic or governance indicators
The methodological framework does not identify not commonly included in LCA or where no single
how impact categories may be defined, or how accepted methodology or indicator exists for
inventory data6 may be translated into impacts. a particular aspect, users may consider taking
Many texts on Life Cycle Impact Assessment cover inspiration from methodologies identified in phase 1
commonly used indicators, such as global warming of this project. These are summarised in Annex 3,
6 Inventory data refers to the raw unweighted data gathered during
with many of these methodologies covering a
the project. For environmental aspects this would include all the range of environmental, social, economic and
resources consumed (e.g., minerals, water, biological, land resources)
and emissions and wastes generated. For social aspects, inventory
governance impacts. At the sector level, the
data would include survey responses or raw data on employment, Sustainability Index for North American Public
equality, training, accessibility etc. This inventory data is translated
into impacts through a mix of characterisation, prioritisation and 7 http://www.lifecycleinitiative.org/activities/phase-iii/global-
weighting depending on the methods involved. guidance-on-environmental-life-cycle-impact-assessment-indicators/
Hotspots Analysis: An overarching methodological framework and guidance for product and sector level application 21Gardens and the FAO’s Sustainability hotspots analysis may want to understand their
Assessment of Food and Agriculture exposure to this. Depending on the maturity of
Systems include indicators across all knowledge on the topic this may also be more
four areas. For products, a number applicable to qualitative issues.
of methodologies identified include
social, economic or governance For further information
indicators in addition to environmental indicators.
Dreyer, L. C., Hauschild, M. Z., Schierbeck, J.
Users can also consider using existing reporting
(2010) Characterisation of social impacts in LCA
standards such as Global Reporting Initiative to
Part 1: Development of indicators for labour rights.
identify potentially relevant impacts.
The International Journal of Life Cycle Assessment
Impact categories may be selected and prioritised 15:247–259.
through a number of different methods. These include:
Ekener-Petersen E., Finnveden G. (2012) Potential
Distance to target. Impact hotspots identified by social LCA–Part 1: A case
categories may be selected based study of a laptop computer. The International
on issues which have already been Journal of Life Cycle Assessment.
recognised as important in national
Goedkoop M.J., Heijungs R, Huijbregts M., De
policy, corporate commitments
Schryver A.;Struijs J., Van Zelm R, (2009) ReCiPe
or other commitments, such as
2008, A life cycle impact assessment method
the global commitment to reducing greenhouse
which comprises harmonised category indicators
gas emissions arising from the United Nations
at the midpoint and the endpoint level; First edition
Framework Convention on Climate Change
Report I: Characterisation 6 January 2009, http://
(UNFCCC) Paris Agreement. Hotspots may be
www.lcia-recipe.net
identified within the context of these drivers of
action. This may be applicable to qualitative and
quantitative issues. How?
Materiality. This requires a focus on issues At this stage the level of robustness should be
which are important to internal and external agreed. The level of robustness will inform how the
stakeholders (see Who?) and can be influenced. data is gathered, used and communicated; and
This definition of materiality is distinct from legal any quality thresholds that must be passed to meet
definitions. Materiality may involve a subjective the goal of the study. Considerations in setting the
selection of issues based on the prior knowledge level of robustness for the study include:
and values of stakeholders, for example through
• Level of primary data collection required: For
a survey of residents adjacent to a
example a screening study to identify major
facility or consumers. Consideration
hotspots might be based on publically available
of materiality should refer back to
information. Conversely, a study aiming to
the purpose of the analysis (e.g.,
track improvement in a company’s products
regulatory compliance, product
over time would be more likely to require more
improvement) to ensure appropriate
detailed primary information.
issues are considered. Through the analysis, it
may transpire that such issues are not critical. It • Assumptions / simplifications to be made:
is nonetheless important that they are included to What assumptions are being made and how
demonstrate the avoidance of bias in assessments might these affect the level of detail in the
and enable relevant conclusions to be drawn. results e.g., using data for one product as a
This may be particularly useful in identifying the proxy for another
importance of issues which cannot otherwise be • What will be the approach where gaps exist:
quantified. Could proxy data be used or should primary
research be commissioned?
Exploratory. An issue may have recently risen
in prominence, and the commissioner of the Scoping this out will then allow you to consider
whether you have the appropriate skills to define
22 Hotspots Analysis: An overarching methodological framework and guidance for product and sector level applicationthese criteria and if not how these may be obtained Sector economic data may be available at the
(e.g., through training, partnerships, outreach). level of an organisation, trade association,
The user should engage with key technical region or nation through information collected
stakeholders to establish the level of robustness by businesses, associations and national
required in the study as understanding these statistics bodies.
requirements will inform the best way of carrying • Input-Output Tables and Studies. By
out the analysis. This will then link to the discussion linking economic flows with other flows (e.g.,
of “Who?” needs to be involved in the study. materials, greenhouse gas emissions, labour)
environmentally – extended input output
To meet the objectives of the hotspots analysis,
information can be used to identify hotspots and
data quality criteria should be agreed for the
causal links through a supply chain. A number
assessment.
of models exist at global and national levels
(e.g., GTAP) which describe such relationships.
A data collection hierarchy should be established to
prioritise efforts (e.g., public data, literature review, • Single Issue Studies. For many impacts,
primary data, then personal communication, then information and data sources may exist which
unpublished corporate or government data). focus on that issue only. This may include work
This will be informed by the goal and scope of from academia and NGOs.
the study. For example, if the objective is rapid
Where qualitative data sources are being used,
screening then a literature review may be a starting
the goal and scope should establish how this
point. However, if the objective is to understand
qualitative data is to be used – will some form of
a specific value chain primary data may be the
ranking or points system be used to convert the
starting point. Depending on the defined goal of
qualitative information into a quantitative metric
the study, the types of information required may
and why has the suggested method been chosen?
vary significantly. Potential data sources include:
It is sometimes worth questioning existing data
• Life Cycle Assessment Studies. Life Cycle
structures and classifications as breakthrough
Assessment provides information on the
insights often come from unpicking the established
relationship between a specified functional unit
norms or thinking laterally. New data classifications
and specified environmental impacts. Studies
or content introduced from different disciplines or
carried out in line with international standards
sources can reveal valuable new perspectives. For
(e.g., ISO 14040) should give clear information
example, it may become apparent that what at
linked to a clear functional unit. Subject to
first appear to be very different consumer goods,
review, the findings of existing LCA studies
product categories are all dependent on a specific
may be transferable and provide sufficient
raw material or ingredient (e.g., palm oil, timber,
information to enable hotspots to be identified.
soy, beef), raising the profile of the raw material
• Corporate Social Responsibility Reports.
to a potential hotspot by virtue of the fact that it is
Many organisations publish reports covering
being used across multiple products.
their environmental, social and ethical
performance. Such reports may provide data In some cases, data or information on key
which can be used in assessing hotspots, either aspects may be missing. This is most frequently
on their own or in conjunction with reports from the case with “beyond LCA8” impacts, including
other organisations. Standards for sustainability socio-economic impacts, governance impacts
reporting, developed by organisations such as or environmental impacts that are not driven by
the Global Reporting Initiative, can be used to either resource consumption or emissions (e.g.,
assess the quality of the information available.
• Economic Data. Market/sales data can be 8 In the use of the term “beyond LCA” the authors mean that
hotspots analysis, as a complementary tool, is able to expand
helpful in establishing the quantities of goods and upon the scope and range of impacts that may be identified via Life
services that could be considered in defining a Cycle Assessment (as encompassed by Environmental Life Cycle
Assessment, Social Life Cycle Assessment and Life Cycle Costing).
functional unit, and identifying subsequent data “Beyond LCA” should not be interpreted as better than or superior
needs (e.g., Bill of Materials, purchasing data) to Life Cycle Assessment. 2LCA and hotspots analysis are in fact
complementary tools with their own strengths and limitations.
to identify impacts from a life cycle perspective.
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