Empirical Comparison of Process and Economic Input-Output Life

Oct 20, 2006 - The study fills a gap in existing literature by comparing process-based and EIO-based life cycle assessment (LCA) methods empirically i...
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Environ. Sci. Technol. 2006, 40, 7070-7076

Empirical Comparison of Process and Economic Input-Output Life Cycle Assessment in Service Industries SEPPO I. JUNNILA* Helsinki University of Technology, Department of Civil and Environmental Engineering, P.O. Box 9800, FI-02015 TKK, Espoo, Finland

The study fills a gap in existing literature by comparing process-based and EIO-based life cycle assessment (LCA) methods empirically in service industries. Despite the numerous methodological differences, the methods were found mostly to produce the same environmentally significant processes for the case organization: the use of electricity in the premises, the construction of the premises, the business travel by cars, the heating of the premises, and the business flights. However, the process-based LCA could not be used to assess the environmental impacts of purchased services properly. The study also recognized most of the theoretical differences listed in the literature, and found the ones related to the cut-offs in purchased services, the price inhomogeneity, and the industry-atypical electricity production have the greatest influence on results.

Introduction The service sector is an essential part of western economies, and it is estimated to produce over two-thirds of the gross national product in western countries (1). It also provides a major share of workplaces and growth in those countries. In contrast, the importance of the sector in environmental issues has not yet been well recognized (2, 3) although scientific research seems to imply that the sector is responsible for a notable share of the environmental impact in society (4, 5). Rosenblum et al. (4) have, for example, estimated that the service sector has almost the same energy use and global warming potential as the manufacturing sector, and Torras (5) suggests that the shift toward services will not reduce the global environmental impact. Instead, the impact will continue growing. One reason for the lower visibility of the service sector in environmental issues may be the fact that a large share of its environmental loadings, such as air emissions, are not produced at the actual site of activity but are indirect impacts (6, 7), and thus, the industry itself believes it is a “clean industry” and pays little attention to ways to minimize its environmental impact (8, 3). For instance, a spokeswoman for Microsoft recently stated that the company takes climate change seriously but “does not operate facilities that generate significant quantities of GHGs” (9). The indirect impacts of services have traditionally been rather difficult to assess or to recognize (10, 11). Life cycle assessment (LCA) has been proposed as a means to include * Corresponding author phone: +358 (50) 511 5816; e-mail: [email protected]. 7070

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environmental impact more comprehensively in determining the environmental significance of the activities of an organization (12, 13). Although the LCA is said to be useful in determining the significant environmental aspects, so far, only a few researchers have used it to study service sector companies (14, 12). The focus of an LCA has typically been on the technical dimension of the system studied, not on the organizational dimension (15). Conventional process-based LCA (PRO-LCA) of a service is often considered very difficult to conduct (16). Some of the major hindrances of using process-based LCA in environmental management of companies are listed below. First, the approach is very laborious, which is a significant drawback for an organization operating in a cost-conscious business environment. Second, the systems included in the LCA should typically be determined in the terms of energy and mass units (i.e., by MJ, kWh, kg, etc.). In practice, most of the companies’ material and energy inputs and outputs are primarily collected and expressed in monetary terms in the company records and accounting systems instead of energy and mass units. Finally, some other inputs, such as the services purchased and capital goods are typically only expressed in monetary values in the company records. Another interesting approach to conducting an environmental life cycle assessment is an “input-output”-based life cycle assessment that links environmental data to monetary input-output tables (17, 7). The input-output approach could provide some clear benefits from the perspective of the environmental management of the service sector companies. First, the purchased material, energy, and services need to be defined only in terms of monetary value. Second, the approach is very fast to use; the practitioner does not need to collect information from all processes in the supply chain because the information is already included in the inputoutput tables. Third, the approach always provides a full inventory (i.e., cut-offs in the supply chain are not needed) for the production phase of the commodity or service that is taken into account. Finally, the environmental interventions of goods and services produced within the economy are always assessed consistently, which is an important dimension in the case of service organization in which a significant amount of supply chain purchases are additional services instead of materials or energy. At the moment, the level of aggregation of most inputoutput models is still too high for company purposes. However, the input-output models based on the U.S. economy, here called economic input-output life-cycle assessment (EIO-LCA), are richer in detail and can provide data at much lower level of aggregation with nearly 500 goods and services listed (17). For example, the European Commission’s Integrated Product Policy (18), set to identify the electrical products with the greatest potential for environmental improvement, has chosen a U.S.-based input-output approach instead of an European one as a basis for estimating the environmental life cycle impact of electrical products (19, 17). The EIO-LCA approach is said not to be adequate for detailed LCA studies (7, 20) but it has not yet been tested in the realm of service companies. Thus far, almost all studies that have compared the EIO-LCA with the PRO-LCA have addressed the problem from a theoretical perspective, indicating that both approaches have differences and imperfections (7, 17, 20, 21). Very few empirical studies have compared the results in empirical terms (22, 23). However, from an environmental management perspective, the interesting questions would be how far the results with the two 10.1021/es0611902 CCC: $33.50

 2006 American Chemical Society Published on Web 10/20/2006

approaches are from each other in the present state of available data, and if the results were different in absolute values (kg CO2 equivalency, kg SO2 equivalency, etc.), would they still produce the same significant environmental aspects for the environmental management of the company. The study explores how much and in what respect the results of an input-output-based LCA differ from those of a process-based LCA when assessing the environmental impacts of a service organization. The study also determines the processes with the most significant contribution to the environmental impact of a service organization, and finally, it tests whether the current U.S.-based input-output database could be used to determine the environmentally significant activities of a service company in Europe.

the company studied, the system boarders, the cut-offs made, the procedures of collecting primary data, and the sources of secondary data (i.e., the emission data obtained from published sources) are described in more detail in the Supporting Information (SI). The suitability of data used for both the PRO-LCA and EIO-LCA models was assessed with a descriptive data quality matrix developed for LCA purposes (28, 29). The data used for the PRO-LCA were targeted at the level of “satisfactory” which corresponds to the third-highest level (3 out of 5) in the selected framework. The results and discussion of the data quality are presented in the SI.

Research design

Environmental Impact with PRO-LCA. The environmental impacts of the case company calculated with the PRO-LCA are presented in Table 1. The processes with higher than 10% overall contribution to any of the studied impacts are presented below. The processes related to the office premises activity contribute the most to the overall environmental impact of the organization. In total, the premises related processes have a share of 43-67% of the overall environmental impact. The contribution of all individual premisesrelated processes except one, namely heating, is higher than 10% in all studied impact categories, and even the contribution of heating is higher than 10% in every category except the summer smog. On average, the electricity services and the construction are both accountable for some 20% of the overall contribution, and the heating service for some 15%. The business travel activity related processes produce the second highest impacts, with 19-29% contribution in the studied impact categories. The use of passenger cars and flights are the processes that produce almost all the environmental impact inside the business travel activity. The use of passenger cars alone produces 25% of the summer smog impact in the company, and in addition, it answers for 15% contribution to the eutrophication and 12% to the acidification. The contribution of business flights are 12% to the climate change, 11% to the acidification, and 13% to the eutrophication. The office equipment, office supplies, and service purchasing activities all have a clearly lower average input in the result. However, occasionally the individual processes in those activities can also have relatively high impacts. For instance, the use of copy paper has a 14% share in the eutrophication. Environmental Impact with EIO-LCA. The environmental impacts of the case company calculated with the EIOLCA are also presented in Table 1. The processes with higher than 10% overall contribution to any of the studied impacts are presented below. In the EIO-LCA, the environmental impacts from the purchased services are clearly emphasized, comprising 25-40% contribution to the environmental impacts. All but one of the numerous services that the company purchases have only a minor contribution (less than 3%) to the overall impact, but the restaurant and catering services alone contribute 16% to the acidification, 16% to the summer smog and 25% to the eutrophication. The processes within the office premises activity have about the same overall environmental impact as the purchased services. In total, the premises-related processes have a share of 2040% of the overall environmental impact. The individual process having the highest overall impact, i.e., some 13%, is the electricity service with 16% contribution to the climate change, 21% to the acidification, and 12% to the eutrophication, respectively. Similarly, the construction processes account for some 13% average contribution, with over 10% contribution in all impact categories. The heating services have an average of 6% of the share of the impacts; the highest share is 10% in the acidification.

The research used case study design (24, 25), and it proceeded using the following main steps: (1) The activities of the case company were divided into two groups, intangible and tangible expenses, based on the detailed accounting records of the company. Intangible expenses included such items as wages and salaries, social expenses, daily allowances, and purchased services. Among the intangible services, only the purchased services were supposed to cause environmental impact. The tangible expenses included materials and energy purchased. (2) The tangible expenses and purchased services were matched to the original invoices; based on these invoices, the amount and type of material, energy, and services were quantified. (3) For the purpose of creating the PRO-LCA system model, the primary data were collected on the price and the type and amount of material, energy, or services with a physical unit (e.g., kWh of electricity, m2 of rented space, kg of newspaper, km of intercontinental flight). In many occasions, the physical amounts could not be retrieved directly from the invoice but from the original supplier instead. The collected data were merged in 251 separate processes, which were then used as unit processes in the PRO-LCA system model. Finally, the system model was based on primary data from the processes, and the secondary emission data from individual LCA reports of the product producers or from generic LCA databases. (4) For the purpose of creating the EIO-LCA system model, the same primary data were merged in 78 separate processes which were used as unit processes in the model. Finally, the model was created based on the primary data from the processes and the secondary data from a U.S.-based inputoutput LCA database. (5) The environmental impacts were calculated separately for the PRO-LCA and the EIO-LCA, and the activities with highest contribution were determined (6) The results of the EIO-LCA and PRO-LCA were compared both at the whole system level and in different life cycle stages and impact categories. (7) The environmentally significant aspects of the service company were determined based on the environmental contribution of processes, and the differences in results with the two approaches were discussed. The scope of the LCA covers 1-year operation of a consulting and engineering company and it included all the activities of the organization (26). The environmental impact of the yearly operations is assessed per each employee. The company studied is an international engineering and consulting company which has its headquarters in Finland. The majority of the company’s operations is centered in Europe but some are located in Asia, South America, and the U.S. The case organization has some 150 employees situated in one office building in Southern Finland. The company rents its premises. The main characteristics of the system describing

Results

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TABLE 1. The Environmental Impact of the Service Organization Calculated with PRO-LCA and EIO-LCA.a climate change [kg CO2 equiv.]

office premises electricity heating construction business travel flights passenger cars buses, trains, etc. office equipment electricity furniture manufacturing office supplies copy paper, etc books and papers pens, staple, etc purchased services restaurants advertising, marketing hotels communication O&M facilities postal services recreational services other services total

acidification [kg SO2 equiv.]

PRO

EIO

PRO

EIO

2586 1288 847 451 744 454 290 0 355 210 73 72 31 29 1 0 145 n/a n/a n/a n/a n/a n/a n/a 145 3861

2922 1268 617 1037 1678 965 671 41 951 207 92 652 500 363 44 93 2078 762 210 188 184 127 102 102 403 8128

7.46 2.97 2.22 2.27 3.02 1.45 1.57 0.00 1.67 0.49 0.64 0.54 0.28 0.27 0.00 0.00 0.56 n/a n/a n/a n/a n/a n/a n/a 0.56 12.98

18.93 9.52 4.63 4.78 4.78 1.49 3.10 0.19 5.21 1.55 0.39 3.27 3.08 2.39 0.26 0.42 14.16 7.19 1.24 0.98 0.91 0.63 0.33 0.58 2.30 46.16

summer smog [kg C2H4 equiv.] PRO 1.17 0.25 0.11 0.81 0.65 0.08 0.58 0.00 0.19 0.04 0.14 0.02 0.13 0.11 0.02 0.00 0.14 n/a n/a n/a n/a n/a n/a n/a 0.14 2.28

eutrophication [kg PO4 equiv.]

EIO

PRO

EIO

1.36 0.13 0.06 1.17 1.12 0.29 0.78 0.05 1.10 0.02 0.14 0.94 1.00 0.75 0.09 0.17 2.73 0.89 0.39 0.17 0.26 0.22 0.10 0.07 0.64 7.30

0.81 0.28 0.21 0.33 0.53 0.25 0.28 0.00 0.20 0.05 0.11 0.04 0.27 0.27 0.00 0.00 0.10 n/a n/a n/a n/a n/a n/a n/a 0.10 1.91

1.10 0.46 0.22 0.42 0.46 0.16 0.29 0.02 0.38 0.07 0.04 0.27 0.28 0.21 0.02 0.04 1.56 0.95 0.11 0.07 0.08 0.07 0.05 0.04 0.20 3.79

a The processes that contribute more than 20% in each impact category are written in italics and bolded, and the processes that contribute more than 10% are written in italics.

The business-travel-related processes produce the third most impacts, from the 10% share in acidification all the way up to the 21% share in the climate change. The individual processes contributing most to the impacts are, again, the use of passenger cars and flights, the passenger cars peaking with 11% in the summer smog, and the flights with 12% in the climate change The average impact of both the office equipment and the office supplies activities is clearly lower, but occasionally, the individual processes can have relatively high contributions, such as the 13% contribution of the office equipment manufacturing and the 10% contribution of the copy paper in the summer smog. Comparing PRO-LCA with EIO-LCA. The results from the two tested LCA approaches can be compared both as by the total amount of environmental impact of the studied system and its parts or as the contribution of each process and activities to the overall environmental impact. The first is of interest mostly when trying to understand the systematic differences between the two approaches, and the second, when trying to, for instance, identify the environmentally significant activities of the system for the purpose of environmental management. The first question is dealt with in this section and the second one in the next section titled “Significant Environmental Aspects”. When comparing the results at the whole system level, i.e., the total amount of each impact in Table 1, we can see that the two approaches produce relatively different results. The EIO-LCA seems to produce constantly higher (50-70%) impacts in all impact categories. Roughly 50% of the difference is caused by the differences in purchased services and the rest by all the other processes together. The comparison of the EIO-LCA and the PRO-LCA does not provide easily comparable results as there are several simultaneously affecting factors. Some methodological factors, such as the cut-offs and the valuation of monetary flows, should have a parallel influence in all impact categories, whereas some others, such as technological, geographical, 7072

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and temporal differences could have a reverse influence on the results by impact categories. Two parallel factors, namely the cut-offs in purchases services and the valuation of monetary flows seems to have a major influence throughout the results. The lack of supply chain information and the lack of suitable data for restaurant and catering services in the purchased services reduce the environmental impacts of services processes in the PRO-LCA with some 25-40%. In addition, the valuation of monetary flows was assessed to have a major, over 35%, influence throughout the results. More discussion on the issue is included in the Supporting Information. Below, the influence of some other factors, although minor compared with the previous ones, are presented according to processes and impact categories. As a whole, the PRO-LCA approach produces higher environmental impacts in 10 out of 52 possible result cells (a matrix of 13 processes and 4 impact categories) and the EIO-LCA in 42 cells (Figure 1). In the climate change, no individual process has higher than a 10% difference between the two approaches (the difference is calculated as the ratio of margin in the result to the total impact). The processes with the greatest difference are the construction of the premises (7%), the manufacturing of office equipment (7%), and the business flights (7%). The difference in the construction of the premises is about the same size as the difference reported in another LCA study comparing, specifically, the differences between U.S. and Finnish office buildings (30). In the article, the main reason for national differences was reported to be the differences in the building material manufacturing processes. On the contrary, the differences in the manufacturing of office equipment processes seem to be based mostly on the lack of supply chain information in the PRO-LCA data (31). The data set used in the PRO-LCA only included downstream supply chain information until the main equipment manufacturing, lacking the information from the equipment assembly downwards. However, in the EIO-LCA database, the downstream

FIGURE 1. Environmental impact of a service organization calculated with the PRO-LCA and EIO-LCA approaches. (PE ) premises, electricity; PH ) premises, heat; PC ) premises, construction; TF ) travel, flights; TC ) travel, cars; TB ) travel, buses and other public transportation; EE ) office equipment electricity; EF ) office furniture; EM ) office equipment manufacturing; SC, supplies, copy paper; SB ) supplies, books and papers; SP ) supplies, pens etc.; PS ) purchased services). industries seem to cause most, over 50%, of the climate change impact (32). In the business flights, the factor that reduces the CO2 emissions in the PRO-LCA could be explained by the flight mix. In the PRO-LCA, over 60% of the flights are long distance flights which have around 30% lower CO2 content compared with short distance flights (27). In the U.S., in 1998, the share of long distance flight was only approximately 30% (33). When these factors are eliminated from the results, the two processes produce quite similar environmental impacts. In acidification, the process causing a difference greater than 10% between the two approaches is the use of electricity (14%) in the office premises. The difference here is a good example of the influence of an industry-atypical energy production caused by the simultaneous temporal and geographical factors. The absolute SO2 emissions with the U.S. based EIO-LCA data are around 3 times higher than those with the case sensitive process data. In the case region (Finland), the SO2 emissions, compared to the CO2 emissions, were reduced by 80% in ten years, from 1990 to 2000, due to the implementation of policy instruments and technological changes on the market (34). During the same period of time, the SO2 emissions in the U.S. have reduced less, by some 20% (35). Just by eliminating this difference from the results, the two approaches, EIO-LCA and PRO-LCA, produce almost similar results. In the summer smog category, two processes have a difference of around 10%; the office equipment manufacturing and the office paper. Also, the differences in the manufacturing of office equipment processes seem to be based mostly on the lack of supply chain information in the PRO-LCA data. As discussed above, the data set for office equipment in the PRO-LCA included only the supply chain information until the main equipment manufacturing, lacking the down-stream information. In the EIO-LCA database, the downstream industries seem to cause an extremely high share, around 90%, of the summer smog impact (32), which is close to the difference found here. Also in the office paper processes, the more extensive supply chain information in the EIO-LCA leads to higher summer smog emissions. Most of the summer smog emissions (over 70%) in the EIO-LCA come from the downstream supply chain of copying and

printing processes which are not included in the PRO-LCA data. In the eutrophication category, no processes were found to have higher than a 10% difference between the results. The office equipment manufacturing was found to have the highest, 6%, difference. The EIO-LCA produces higher impacts here, again, due to the lack of life cycle phases in the PRO-LCA data used for equipment manufacturing. Significant Environmental Aspects. The significant environmental aspects are determined here according to ISO14001 Environmental Management guidelines as those activities of a company that produce most of its environmental impacts. The environmental contribution of the company activities has one major difference, namely the contribution of purchased services, as can be seen on Table 1 and Figure 1. In the EIO-LCA results, the purchased services have the highest environmental contribution along with the office premises, whereas in the PRO-LCA, the office premises alone have the highest contributions. The purchased services score only fourth place in the PRO-LCA results. Otherwise the calculations produce similar environmental profiles with both LCA approaches, the office premises having the highest impact followed by the business travel, office equipment, and finally, the office supplies. In addition, the PRO-LCA results seem to be more uniform over all impact categories, whereas the EIO-LCA has more variation in contribution between the impact categories.

Discussion The study compared the results of a PRO-LCA to an EIO-LCA in service industries and identified the processes with the most significant contribution to the environmental impact of a case organization. The study also tested whether a U.S.based EIO-LCA database would produce the same environmentally significant activities for a service company in a different geographical area with similar production conditions (Finland, Europe) as the more area specific PRO-LCA databases. The study found that the results with the PRO-LCA and the EIO-LCA approaches had differences due to both methodological as well as data quality factors. However, in VOL. 40, NO. 22, 2006 / ENVIRONMENTAL SCIENCE & TECHNOLOGY

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TABLE 2. The Theoretical Limitations of the Tested LCA Approaches by the Literature with the Practical Implications Noticed in the Study Limitations of EIO (implications noticed in the study) •high level of aggregation in industry classifications (processes for business travel by cars, buses and trains are all included in one industry sector) •industry-atypical products (electricity production, construction material manufacturing) •institutional variations (share of long and short distance flights in business travel) •price inhomogeneity (depreciation and exchange rate in all processes) •uncertainties due to the age of the data (SO2 reduction in recent years in fossil electricity production) •rapid development in industries (technological development in electricity production) •incompleteness of sectoral environmental statistics •use phase Limitations of PRO (implications noticed in the study) •high labor and time intensity (throughout the system) •unavoidable cut-offs (throughout the system but cut-offs in the purchased services in particular) •inconsistencies between numerous source LCAs (throughout the system but in the summer smog in particular)

spite of the many differences, the approaches produced, with the exception of purchased services, the same environmentally significant activities and processes for the case organization: the use of electricity (20 vs 13%, the average contribution according to the approach PRO-LCA vs EIOLCA), the construction (21 vs 13%), the business travel by cars (15% vs 8%), and to some extent, the business flights (10% vs 6%), the heating (14% vs 6%), the office equipment manufacturing (2% vs 9%), and the use of paper (5% vs 6%). The only process that was not clearly pointed out by both methods was the purchased services in the PRO-LCA approach (5% vs 34%). In theoretical papers, several methodological limitations have been associated with the two approaches tested (7, 17, 20, 21). The current study recognized some of the limitations listed in the literature (Table 2). The limitations seemed to produce the greatest difference with the price inhomogeneity (34%), the cut-offs in purchased services (25-40%, depending on impact), and to some extent, the industry atypical electricity production in acidification category (14%). No empirical study could be found to have compared the two approaches in service organizations. However, one paper in the car manufacturing industry has studied the difference between two approaches. Keimel et al. (22) have reported that in their LCA concerning the manufacturing of a small passenger car, the EIO-LCA approach produced higher impacts in all categories studied, and that the differences between the two approaches were approximately 30% in the climate change category, 40% in the acidification, and 50% in the eutrophication, whereas here the impacts were 50%, 70%, and 50% respectively. It seems that the differences are in the same order of magnitude in both studies. Another similarity between the two studies was the surprisingly high environmental contribution of restaurant services. In another study, addressing the comparison of existing PRO-LCA and EIO-LCA databases, Mongelli et al. (23) have observed, as also found in this study, that the pricing of monetary flows can have a major influence on the results. Moreover, some studies have examined the environmental contribution of different processes in service organizations. Graedel (14) has created a semiquantitative LCA framework for assessing the environmental aspects of service companies. He classifies three generic types of services with different environmental evaluations: customer comes to service (bank, auto repair, hospital, etc.), service goes to the customer (post, product rental, building remodeling, etc.) and remote provisioning (e-bank, burglar alarm, telecommuting, etc.). In all the different types, the operating facility was found to contribute significantly, as in this study (36). Another set of LCA studies concerning service organizations (banking, consulting, engineering, and administration) is presented by Junnila and Nousiainen (37-40). They have also found 7074

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that the premises related processes seem to contribute by margin the most to the environmental impacts of service organizations both in Europe and in the U.S. However, their study did not include, extensively, the supply chain of purchased services. Another manner of assessing the result of this study is to compare differences found here to the levels of differences considered noticeable in the LCA literature. The data available do not provide enough information for an uncertainty analysis, thus, only “rules of thumb” concerning the differences between LCA results are used here. Typically, the rules of thumb are used to determine whether two systems produce noticeably different environmental impacts, but here the rules are used to estimate whether the two LCA approaches produce noticeably different results for the same system with two datasets. In the literature, the “significance” criteria range between 10 and 50%, the mode being around 50% (28, 41, 42, 43). As we could see in previous chapters, the differences between the two approaches on the whole system level are in the range of those criteria, being 50% in the climate change, 70% in the acidification, 70% in the summer smog, and 50% in the eutrophication category. As discussed in the results, the difference is mostly caused by the differences in the purchased services. In the other activities, the difference between the approaches remained in the range of 40%. The domain, to which the findings of the study can be generalized, rests solely on analytical generalization and replication logic (25). No statistical generalization can be made based on the results. Other service organizations could expect to find the same patterns emerging in their environmental calculations since both of the LCA approaches here produced similar results, which in addition, could be associated with the same activities and processes found in other literature (literal replication). However, the findings are only to be generalized to a certain extent which is discussed below (theoretical replication). In addition to the four environmental impacts tested, there are several other impacts, such as harmful substances, ozone depletion, and biodiversity, in which the generalization is not applicable. Second, the processes that had high contribution with the exception of purchased services, also had best correlation at process level, while in several minor processes, the margins between the approaches more often had more than a three times difference. Especially in the business travel by buses, the office supplies, and the furniture related processes, there was margin of over an order of magnitude. Thus, the results can only be expected to apply to other organizations with relatively similar environmental profiles. Finally, some major processes have variables that could be critical for the result of the study. The industryatypical processes (energy production) and the amount of purchased services were found to cause the most variation

between the approaches. For example, if the amount of purchased services, some 10% in the case, were to grow up to 15% of the company’s turnover, it would make the purchased services the most significant aspect with the EIOLCA, in all impact categories but not with the PRO-LCA. Similarly, if all the energy used by the premises were to be produced with renewable wind energy, the premises activities would drop third behind the business travel in the PRO-LCA but not in the EIO-LCA results. Based on the results, it seems that both approaches, the EIO-LCA with U.S.-based data and the PRO-LCA with process data, could be used for screening LCA purposes for determining the environmentally significant activities of service companies in Europe. However, the PRO-LCA approach did not seem to be able to assess the environmental impacts of the purchased services properly. Also some other methodological differences presented in theoretical literature could be identified in this empirical study. In the field of service organizations, in addition to the cut-offs of services, the price inhomogeneity and industry-atypical electricity production seem to be highly relevant. However, the geographical region of the EIO-LCA data (U.S.) did not seem to be decisive in the case area with different but with similar production conditions (Finland, Europe). Finally, it appears that for many service organizations, the facility related processes, and tentatively the purchased services, are the environmentally most significant activities." In the future, it would be interesting to see how the results of this study would apply to other industries and on other continents. The study also pointed out that financial information could be used in PRO-LCA calculations if it was available. However, currently the process-based LCA reports do not seem to contain the financial information required, which could also be an area of further development. In the present state of available data, the adaptation of EIO-LCA practices could significantly increase the applicability of screening LCAs in the strategic environmental management. Nonetheless, it should also be noted that the approach is the most suitable for strategic level evaluations, for instance, to determine environmentally significant processes in a service organization. The EIO-LCA is not suited for detailed environmental design purposes in service companies as it operates with industry averages and is thus, at best, as accurate as input-output tables for financial evaluations.

Acknowledgments I thank Dr. Ernst Worrell and Prof. Arpad Horvath for stimulating dialog and also the following organizations that have made this research possible Tekes (National Technology Agency of Finland), Teknologiateollisuus (Technology Industries of Finland), Kemppi, Nokia, Retermia, Idman, KCI group, Efore, Elcoteq, Tellabs.

Supporting Information Available The Supporting Information (SI) provides more information on research design, system borders, data collection, results, and data quality assessment.

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Received for review May 17, 2006. Revised manuscript received August 22, 2006. Accepted August 25, 2006. ES0611902