Does a fair wage mean unaffordable prices?

Sharing the research findings of Dr. Ir. Natascha M. van der Velden, one of the leading experts in the field of Social Life Cycle Assessments

Welcome to a new issue of The Crisps–your weekly newsletter on anti-greenwashing and honest fashion communication. In this issue, we take a deep dive into Social Life Cycle Assessments and share the research findings of Dr. Ir. Natascha M. van der Velden, one of the leading experts in the field.

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We’ve got a lot to say in this issue, so we’ll jump right in: Ready?

We met Dr. Ir. Natascha M. van der Velden, a leading expert in the field of Social Life Cycle Assessments, a few weeks ago and spoke with her about one of her papers–we will share the key findings in more detail below. In the paper “Monetisation of external socio-economic costs of industrial production: A social-LCA-based case of clothing production” (2017)¹ she and her supervisor Joost G. Vogtlaender talk about a concept that involves assigning a monetary value to the environmental and social impacts caused by industrial textile production that are not typically accounted for in traditional business and economic models. The main purpose of this method is to point at hotspots over the value chain. In their research, Natascha and Joost could identify marginalized garment workers in Bangladesh and Myanmar and field workers in India to a lesser extent as such.

These external costs represent the negative consequences that businesses impose on society, the environment, and public health but do not bear the financial responsibility for. Monetizing these costs aims to make businesses more accountable for their actions and their true impact on society and the planet. This approach is significant for social and environmental justice because it helps rectify the unequal distribution of environmental harms.

Monetization can lead to fairer outcomes by holding polluting industries accountable and potentially compensating affected communities. The same applies to monetizing social costs which also has implications for social justice. It sheds light on the hidden costs associated with unfair labor practices and income inequality. By internalizing these costs, businesses may be more inclined to adopt fair labor practices, support local communities, and ensure that workers are paid fairly.

To contextualize properly we will focus on the UNEP/SETAC approach in this issue.

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The UNEP/SETAC approach to SLCA

The UNEP/SETAC (United Nations Environment Programme/Society of Environmental Toxicology and Chemistry) Life Cycle Initiative is a collaborative effort that aims to promote the development and application of life cycle assessment (LCA) methodologies for a variety of environmental and sustainability purposes, including Social Life Cycle Assessment (SLCA).

The UNEP/SETAC approach to SLCA is based on the "Guidelines for Social Life Cycle Assessment of Products"² developed by the initiative. These guidelines provide a framework for assessing the social and ethical aspects of products throughout their life cycle and align with the principles and methodology of traditional life cycle assessments. Here are some key aspects of the UNEP/SETAC approach to SLCA:

🔹 Scope and Objectives: The UNEP/SETAC approach emphasizes a holistic view of social impacts, considering various aspects, such as labor conditions, human rights, community well-being, and health and safety, throughout the entire life cycle of a product.

🔹 Life Cycle Thinking: Similar to environmental LCAs, the UNEP/SETAC approach promotes "life cycle thinking" in SLCA. This means looking at the social impacts associated with a product from raw material extraction, through production and use, to end-of-life disposal or recycling.