Sustainable Life Cycle Management: Indicators to assess the
sustainability of engineering projects and technologies

Alan C. Brent and Carin Labuschagne
Chair: Life Cycle Engineering, Department of Engineering and Technology Management
University of Pretoria, Pretoria, 0002, South Africa
Tel: +27 12 420 3929; Fax: +27 12 362 5307
alan.brent@up.ac.za; carin.labuschagne@up.ac.za

1. Introduction
Business, as one of the three pillars of society (the other two being government and civil
society)1, has a responsibility towards the whole of society to actively engage in the
sustainability arena2. The pressure is therefore mounting for businesses to align operational
processes with the three objectives of sustainable development3. Four different types of
drivers for the incorporation of sustainability into business practices have been identified4. An
adaptation of the identified drivers is illustrated in Figure 1.
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1 Wartick, S.L. and Wood, D.J., 1998. International business and society. Blackwell, Malden, United States of
America.
2 Holliday, C.O., Schmidheiny, S. and Watts, P., 2002. Walking the talk: The business case for sustainable
development. Greenleaf Publishing, Sheffield, United Kingdom.
3 Keeble, J.J., Topiol, S. and Berkeley, S., 2003. Using indicators to measure sustainability performance at a
corporate and project level. Journal of Business Ethics 44: 149-158.
4 Goede, F., 2003. The Future of SH&E in the process industry with the focus on products. Sasol Group
Presentation, Department of Engineering and Technology Management, University of Pretoria, South Africa.

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The International Institute for Sustainable Development (IISD) has subsequently suggested
that businesses can gain a competitive edge, increase their market share, and boost
shareholder value by adopting and implementing sustainable practices. This can be done by
companies “adopting business strategies and activities that meet the needs of the enterprise
and its stakeholders today, while protecting, sustaining and enhancing the human and natural
resources that will be needed in the future”5.

A sustainable company in industry thus does not exclude business development and profit, but
rather guides itself along a route of environmental protection and social responsibility6.
However, stakeholders are now demanding proof of the “sustainability” of companies by
progressively demanding reports on the overall sustainability performances of operational
initiatives such as undertaken projects or technological innovations. The aim of this paper is
to propose methodologies to assess the sustainability of such operational initiatives in
industry, i.e. to assess to what extend the operational initiatives are aligned with the principles
of sustainable development. In order to do so, three questions must be answered:
•
Which aspects of a technology or project must be assessed internally? The interaction of
different life cycles from an industry perspective must be addressed.
•
What must be considered and measured through such an assessment? A framework of
sustainable development criteria, relevant for operational initiatives in industry, must be
defined.
•
How must these criteria be measured? Two types of sustainable development indicators
or assessment procedures are introduced and discussed, specifically for the
environmental and social dimensions of sustainability.

2. The interaction of different life cycles from an industry perspective
A prerequisite for aligning operational initiatives, such as undertaken projects or
technological innovations, with the principles of sustainable development is a clear
understanding of the various life cycles that are involved and the interactions between these
life cycles7. Three distinct life cycles can be distinguished, namely7: project life cycle, asset or
process life cycle (the life cycle of an implemented technology), and the product life cycle.
A project in this context is viewed as a vehicle to implement a capital investment in a new or
improved asset or technology. Each of these life cycles consists of various phases (see Figure
2)7.

The life cycles do nevertheless interact, for example: the product and asset life cycles interact,
while the asset and the project life cycle also interact (see Figures 3 and 4)7. These
interactions of the different life cycles in industry have been described in detail elsewhere7. It
can thus be concluded that if the sustainability of a project or technology is assessed, the
impacts or consequences of the assets and products associated with the project or technology
must be included in the assessment.


5 International Institute for Sustainable Development, Deloitte & Touche and the World Business Council for
Sustainable Development, 2003. Business strategies for sustainable development: Leadership and accountability
for the 90s. Retrieved from http://www.iisd.org/publications/publication.asp?pno=242.
6 Hill, J., 2001. Thinking about a more sustainable business: An indicators approach. International Journal of
Corporate Sustainability; Corporate Environmental Strategy 8(1): 30-38.
7 Labuschagne, C. and Brent, A.C. 2004, Sustainable Project Life Cycle Management: The need to integrate life
cycles in the manufacturing sector. International Journal of Project Management, in press.

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Project
Proj
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Figure 2: Different life cycles fundamental to operations in industry7


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Figure 3: Interaction between the project and asset life cycles7



Product Life Cycle
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Figure 4: Interaction between the asset and product life cycles7

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3. A framework of criteria to assess the sustainability of engineering
projects and technologies in industry
In order to assess sustainability performances in industry, a framework of appropriate criteria
and associated indicators has to be defined. A number of current integrated frameworks,
which are used to assess sustainability at an international, national, local or company level,
have been reviewed to determine the relevant aspects (or criteria) that should be considered
when assessing industry sustainability8.

The proposed framework of appropriate criteria to assess the sustainability performances of
operational initiatives in industry is shown in Figure 58. The framework is divided into
different levels to address the separate aspects of corporate responsibility strategy in terms of
sustainability. The rationale of these levels has been described in detail elsewhere8.

From a business perspective, the inclusion or consideration of social aspects in sustainability
practices is marginal compared to the environment and economic dimensions9, 10, 11. It has
further been stated that the current state of development of indicators or measurement
procedures of the social performances of industry parallels that of environmental
performances approximately 20 years ago12. Therefore, the social criteria of the framework
were verified by a set of case studies. For each of the three life cycle phases of assets (see
Section 2), i.e. construction, operation (which includes the product life cycle) and
decommissioning, four case studies were chosen that aimed to determine the significant social
impacts that may occur during these life cycle phases:
•
The construction of four facilities in the process industry: a mine; an incinerator; petrol
filling stations; and a gas pipe line across two countries.
•
The operation of four chemical manufacturing facilities of which two are located in
South Africa, one in Germany and one in the United States of America.
•
The decommissioning of four process facilities: a cyanide manufacturing plant; a fibres
manufacturing plant; a mine; and one unit within a process plant.

Project related documentation, pertaining to each of the case studies, were evaluated and
personal interviews were held with project responsible individuals. The case studies
concluded that certain social impacts are more important in certain phases (see Table 1), while
it has been evident that stakeholder participation is crucial in all life cycle phases. A pre-
survey has also been conducted in a South African company in the process industry to
establish the suitability of the social criteria, as well as the relevance of the criteria in the
framework, in terms of sustainable business practices and specifically project Life Cycle
Management13. The case studies and pre-survey showed that the framework does include all
of the relevant social criteria.


8 Labuschagne, C., Brent, A.C. and van Erck, P.G., 2004. Assessing the sustainability performances of
industries. Journal of Cleaner Production, in press.
9 Zadek, S., 1999. Stalking sustainability. Greener Management International 26: 21-31.
10 Visser, W. and Sunter, C., 2002. Beyond reasonable greed: Why sustainable business is a much better idea.
Human & Rousseau & Tafelberg, Cape Town, South Africa.
11 Roberts, S., Keeble, J. and Brown, D., 2002. The business case for corporate citizenship. Arthur D. Little,
Cambridge, United Kingdom.
12 Ranganathan, J., 1998. Sustainability rulers: Measuring corporate environmental and social performances.
Sustainable Enterprise Perspectives, World Resources Institute Publication.
13 Labuschagne, C. and Brent, A.C., 2004. Sustainable Project Life Cycle Management: Aligning project
management methodologies with the principles of sustainable development. Project Management South Africa
conference proceedings, Johannesburg, South Africa.

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Level 1
Corporate responsibility strategy





Operational
Societal
Level 2



initiatives
initiatives




Economic
Level 3

Environmental
Social


sustainability
sustainability
sustainability



Financial health
Air resources
Internal human
resources


Economic
Water resources
External

performance
population

Level 4


Potential
Land resources
Stakeholder

financial benefits
participation


Potential
Mineral and
Macro social
financial benefits
energy resources
performance


Figure 5: Framework to assess the sustainability of engineering projects and technologies

Table 1: The most important social criteria affected by the different asset life cycle phases
Construction
Operation
Decommissioning
• Employment Opportunities
• Employment Opportunities
(Internal Human Resources)
•
• Sensory Stimuli
(Internal Human Resources)
Sensory Stimuli and
(External Population)
• Economic Welfare
Community Cohesion
(External Population)
(External Population)

4. Sustainable development indicators or assessment procedures
The identification of suitable indicators to measure the impacts of an operational initiative, i.e.
an undertaken project or technological innovation, including the associated asset and product
life cycles, on the three main sustainability dimensions (see Figure 5) is dependent on the
following three important points7, 8:
•
The kind of information that is available at the point of assessing the sustainability
performance of a specific operational initiative. For example, considering the life cycle
of a technology development project in the process industry, detailed data may not exist
in the early stages of the project on which to base an assessment, but may be available
at later decision gates in the project appraisal process. Also, additional information
gathering activities might have to be executed during individual phases in order to
obtain the necessary sustainability data that is required by the indicators.
•
The scientific methodology to translate the operational initiative information. There is
currently no consensus on the exact procedure to assess the environmental performances
of operational activities. However, work is ongoing in this field and methodologies have
been proposed. With respect to the social dimension, there is little agreement on which
criteria should be considered for social performances evaluations and methodologies are
currently not practical for industry applications and business practices. In contrast, the
methodologies for most of the sub-criteria of the economic dimension are reasonably
well defined.

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•
The preferences of the specific project appraisers. Two approaches are currently under
debate. On the one hand all impacts could be translated into financial terms14, which is
often understandable by decision-makers. On the other hand, it is difficult, if not
impossible, to place an economic value on all environmental and social impacts15, and a
qualitative route with decision analysis techniques, e.g. Multi-Criteria Decision
Analysis (MCDA), could be used16. In some cases, a combination of these two
approached have been proposed17.

In terms of the latter, two approaches are discussed in more detail for the environmental and
social dimensions of sustainable development, i.e. a pure monetary evaluation route and a
combination of quantitative and qualitative indicators that may be used with decision analysis
techniques.

4.1 Sustainability Cost Accounting (SCA) procedure
A Sustainability Cost Accounting (SCA) procedure has been introduced for South Africa,
whereby externalities (burdens and benefits) are translated into financial terms to assess the
overall sustainability performance of a developed technology14, 18. The SCA procedure is
similar to the methodology of cost-benefit analysis (CBA), and enables tradeoffs between
costs (impacts or deterioration) and benefits (contributions). This is possible as impacts are
expressed in a common financial denominator. Whether addressing environmental or social
aspects, the SCA procedure adheres to the four steps of an economic CBA that have been
distinguished19, 20:
1.
Making an inventory of (positive and negative) impacts on the environment and society
as well as on the economic situation of the company.
2.
Determination of the monetary values of the impacts.
3.
Discounting long-term effects.
4.
Assessing risk and uncertainty in case probabilities can be assigned to the likelihood
that an event (industrial accident) will occur, or little is known about future impacts and
no probabilities can be assigned.

The fourth step is specific with respect to the evaluated technology and the industry sector.
For this reason it is not explicitly addressed in the generalised Sustainability Cost Accounting
(SCA) procedure. The environmental and social indicators that have been developed, with
respect to determining the monetary values of impacts and adopting discount rates for long-
term impacts, for the criteria at level 4 of the framework (see Figure 5) are summarised in

14 Van Erck, R.P.G., 2003. A monetary evaluation of the sustainability of GTL fuel production in South Africa.
Master’s thesis, Faculty of Technology Management, Technical University Eindhoven, the Netherlands.
15 Jansen, R., 1992. Multi-objective decision support for environmental management. Kluwer Academic
Publishers, Dordrecht, Germany.
16 Petrie, J., Basson, L., Stewart, M., Notten, P. and Alexander, B., 2001. Decision making for design of cleaner
processes: A Life Cycle Management perspective. Proceedings of the First International Conference on Life
Cycle Management: Bridging the Gap between Science and Application, Copenhagen, Denmark.
17 Winpenny, J.T., 1991. Values for the environment: A guide to economic appraisal. HMSO, London, United
Kingdom.
18 Brent, A.C., van Erck, R.P.G. and Labuschagne, C., 2004. A Sustainable Cost Accounting (SCA)
methodology for process industry projects in developing countries: A South African case study. Presentation at
the annual Environmental Management Accounting Network (EMAN) conference, Lueneburg, Germany.
19 Blignaut, J.N., 1995. Environmental accounting in South Africa. Doctoral thesis, University of Pretoria,
Pretoria, South Africa.
20 Van Pelt, M.J.F., 1993. Ecologically sustainable development and project appraisal in developing countries.
Ecological Economics 7: 19-42.

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Tables 2 and 321. The tables provide the costs (of impacts) in the South African currency (for
the year 2002), i.e. the Rand (R), for direct use in the South African industry.

A case study has been used to demonstrate the SCA procedure, which considers the operation
of a hypothetical Gas-to-Liquid (GTL) fuel-manufacturing facility at a specific location in
South Africa14, 18, 22. The SCA indicators show that the negative environmental impacts
associated with the GTL technology outweigh the internal economic benefits for the
company. However, a net positive social beneficiation is associated with the technology,
which decision-makers should consider with respect to the overall sustainability of the
technology.

The SCA procedure shows certain limitations. Firstly, the concept of sustainability cannot be
expressed in monetary terms in a comprehensive manner. Thereby, not all of the criteria (see
Figure 5) that are considered relevant to assess sustainability performances can be measured.
Secondly, the uncertainty of the data that is obtained, and on which the SCA assessment is
based, may strongly influence the usability of a sustainability performance assessment’s
results. However, this does not mean that the methodology is incapable of improving the
understanding of a technology’s sustainable performance, i.e. the criteria that are measured
are all considered relevant for the assessment of a technology’s sustainability.

Table 2: The environmental indicators that are used in the SCA procedure14, 21
Main criteria
Sub-criteria
Indicator
Cost (2002)
Comments
Impacts on human health (in
R2002/kg) due to: SO2, NOx,
Specific values
Based on a population density
Heavy metals, PM10,
for pollutants
of 80 inhabitants/km2
Photochemical ozone
Regional
pollution
Impacts on buildings (in
R 2.03 per kg of
Based on a population density
Air resources
R2002/kg) due to SO2
pollutant
of 80 inhabitants/km2
Impacts on crops (in R2002/kg)
Specific values
Based on a population density
due to Photochemical ozone
for pollutants
of 80 inhabitants/km2
Impacts (in R
R 0.22 per
Damage costs are based on the
Global
2002/kg) due to
Greenhouse Gases
kilogram of CO
lower global estimates of the
pollution
2
(equivalent CO2)
equivalent
European Commission
Estimate based on difference
Difference between opportunity
Water use
R 1.99/m3
between opportunity costs and
Water
costs and water price
water price
resources
Water
Based on willingness to pay
Negligible
pollution
and is considered negligible
Opportunity costs for the total
Specific for
Based on the specific land
Land use
Land
area affected
types of land-use
type that is affected
resources
Based on willingness to pay
Land pollution
Remedy costs
Negligible
and is considered negligible
Mined
Minerals and
Calculated user
Cost of economic depreciation
Discount rate of 4% for South
abiotic
energy
costs of specific
of non-renewable resources
African setting
resources
resources
natural resources

21 Brent, A.C., van Erck, R.P.G. and Labuschagne, C., 2004. Sustainability Cost Accounting: Part 1 – A
monetary methodology to evaluate the sustainability of technologies. International Journal of Technology
Management, in review.
22 Brent, A.C., van Erck, R.P.G. and Labuschagne, C., 2004. Sustainability Cost Accounting: Part 2 – A case
study to assess the introduced monetary methodology for technology management. International Journal of
Technology Management, in review.

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Table 3: The social indicators that are used in the SCA procedure14, 21
Main criteria
Sub-criteria
Indicator
Comments
Adopt expenditures from annual financial
Expenses on: Wages; Unimployment
Employment
reports. Based on expected number of
Insurance Fund (U.I.F.); Life
stability
employees required to manufacture a
insurance; Medical aid
product or provide a service
Internal
Damage costs of mortality and morbidity of
human
Health and
Cost (to a company) of medical
employees resulting from their
resources
safety
mortality/morbidity
manufacturing or service provision activity
for a newly developed technology
Capacity
Investments in training, education and
Adopt expenditures from annual (financial)
development
R&D
reports
Investments in medical and educational
Adopt expenditures from annual reports or
Human capital
facilities directly attributable to an
project specific publications
External
introduced technology
population
Base estimates on real estate prices
Community
Real estate price changes in the area
provided by local real estate agents and total
capital
where a technology is introduced
real estate value provided by municipalities
Stakeholder
Stakeholder
Expenses on Environmental Impact
Company-specific information
participation
participation
Assessments
Adopt expenditures from annual financial
Socio-
Tax on profits
reports. Based on expected profit and
economic
Tax on wages
number of employees related to a
Macro-social
performance
Other taxes
manufactured product or provided service
performance
Socio-
Expected investment in regional pollution
environmental
Expenditure on monitoring
monitoring due to the introduced
performance
technology

4.2 Multi Criteria Decision Analysis with Environmental Resource Impact
Indicators (RIIs) and Social Impact Indicators (SIIs)
The advantages of Multi Criteria Decision Analysis (MCDA) techniques are that each
decision criteria receives due consideration without necessarily converting it to a common
scale such as a monetary value. The value that these techniques can contribute to strategic
decision-making should not be ignored16 and therefore a second approach to measure the
sustainability impacts and incorporate it into decision-making is proposed. This approach thus
proposes the use of a MCDA technique (for example the Analytical Hierarchical Process) to
establish subjective weighting values for the different indicators (at level 4 of Figure 5) of the
social, economic and environmental dimensions, and then to use the weighting values
together with the indicator values in internal decision-making or for evaluation purposes. As
far as indicators are concerned, the economic dimension has indicators (e.g. Return on
Investment), which can be used directly. However, two procedures that are strongly based on
LCA principles are currently used to derive indicators for the environmental and social
dimensions.

a) Environmental Resource Impact Indicators
A quantitative procedure to calculate environmental Resource Impact Indicators (RIIs) has
been introduced, following the conventional Life Cycle Impact Assessment (LCIA)
methodology23. Thereby, the following equation is applied to calculate the environmental
impact indicators of an operational initiative on the level 4 criteria of the framework (see
Figure 5):

23 Brent, A.C., 2004. A Life Cycle Impact Assessment procedure with resource groups as Areas of Protection.
International Journal of Life Cycle Assessment 9(3): 172-179.

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RII = ∑ ∑ Q ⋅C ⋅ N ⋅S
1
G
X
C
C
C
C
X
Where: RIIG =
Resource Impact Indicator calculated for a main resource group (air,

water, land, or mined abiotic) through the summation of all impact

pathways of LCI constituents on the resource group
QX =
Quantity of LCI constituent X released to or abstraction from a

resource group
CC =
Characterisation factor for a midpoint impact category C (of constituent

X) within the pathway
NC =
Normalisation factor for the midpoint impact category based on the
ambient environmental quantity and quality objectives, i.e. the inverse
of the ambient target state of the impact category
C
Significance (or relative importance) of the midpoint impact category
S
And;
S =
=
C
based on the distance-to-target method, i.e. current ambient state (C
T
S)
S
divided by the target ambient state (TS)

b) Social Impact Indicators
A similar approach is proposed for the social dimension of sustainable development.
However, in order to follow such an approach the following must be defined:
•
The interventions of an operational initiative, including the associated product life
cycle, on the social dimension, i.e. the social LCI of an operational initiative.
•
The classified midpoint categories, with respective characterisation factors for the social
LCI constituents.
•
Measurement or equivalence units for the classified midpoint categories.
•
Normalisation values for the social midpoint categories based on the target background
social footprint in the society where an operational initiative will occur.
•
Significance factors that are a function of the current background social footprint
compared to the target background social footprint in the society where an operational
initiative will occur.

Midpoint categories have been defined by mapping a list of identified possible social
interventions in the process industry (which was a result of the case studies discussed in
Section 3) with the criteria at the different levels of the sustainability performances
assessment framework8. Three measurement methods are proposed to express these defined
midpoint categories in equivalence units (see Table 4):
•
Established risk assessment approaches, which require a subjective evaluation of the
probability of occurrence, the projected frequency of the occurrence, and the potential
intensity thereof;
•
Quantitative evaluation approaches, including, but not limited to, costs (see Section 4.1)
and direct measurements in society; and
•
Qualitative evaluation approaches, which require appropriate subjective scales and
associated guidelines, and have been proposed for the industrial ecology and
streamlined LCA disciplines.

From the definition of the midpoint categories it is evident that the normalisation and
significance steps will be constraint by what is practicably measurable within a society where
an operational initiative (from an industry perspective) will typically occur. In this regard the
availability of information will most definitely differ between developed and developing
countries. Furthermore, the projection of the social interventions of a project or technology
may be problematic or at least differ from case to case.

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Table 4: Midpoint categories and measurement methods to express equivalence units
Social Impact
Measurement
Indicators
Midpoint category
methods to establish
(SIIs)
equivalence units
Permanent internal employment positions
Quantitative
Internal human
Internal Health and Safety situation
Risk
resources
Knowledge level / Career development
Quantitative
Internal Research and Development capacity
Quantitative
Comfort level / Nuisances
Risk
Perceived aesthetics
Qualitative
Local employment
Quantitative
Local population migration
Qualitative
Access to health facilities
Quantitative
Access to education
Quantitative
External
Availability of acceptable housing
Quantitative
population
Availability of water services
Quantitative
Availability of energy services
Quantitative
Availability of waste services
Quantitative
Pressure on public transport services
Quantitative
Pressure on the transport network / People and goods movement
Quantitative
Access to regulatory and public services
Quantitative
Stakeholder
Change in relationships with stakeholders
Qualitative
participation
External value of purchases / supply chain value
Quantitative
Macro-social
Migration of clients / Changes in the product value chain
Qualitative
performance
Improvement of socio-environmental services
Quantitative

5. Conclusions
This paper has provided an overview of the aspects of, or different life cycles associated with,
a technology or project that must be assessed internally. Furthermore, a framework of
sustainable development criteria, relevant for operational initiatives in industry, has been
defined for such internal assessments. Two types of sustainable development indicators or
assessment procedures have also been introduced and discussed, specifically for the
environmental and social dimensions of sustainability.

One procedure attempts to convert the criteria into monetary terms. However, problems have
been identified with this approach and further case studies are required in order to establish
the appropriateness of such a procedure for decision-makers. The second procedure proposes
to apply MCDA techniques with calculated indicators. The calculation of these indicators
follows normal LCIA methodologies, i.e. a midpoint category approach. Social midpoint
categories have subsequently been introduced and further research is now required in order to
determine which midpoint categories should form part of a sustainable project or technology
LCM procedure. Firstly, a survey in the South African industry will establish which social
criteria are relevant at project level and which should rather form part of a corporate
governance framework. Secondly, the application of the Delphi technique will establish
which of the midpoint categories can be practically measured in the process industry, i.e.
suitable information is available from within projects and the external environment. Lastly,
case study information from a set of industry case studies (see Section 3) will determine the
ease of calculating the midpoint category values and determine whether the values are
meaningful for decision-makers.

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Document Outline

• Sustainable Life Cycle Management: Indicators to assess the sustainability of engineering projects and technologies
• 1. Introduction
• 2. The interaction of different life cycles from an industry perspective
• Figure 3: Interaction between the project and asset life cycles7
• Figure 4: Interaction between the asset and product life cycles7
  • • 3. A framework of criteria to assess the sustainability of engineering projects and technologies in industry
• Figure 5: Framework to assess the sustainability of engineering projects and technologies
  • • • • Table 1: The most important social criteria affected by the different asset life cycle phases
      • Construction
    • 4. Sustainable development indicators or assessment procedures
• Table 4: Midpoint categories and measurement methods to express equivalence units
  • • • • • • Internal human resources
    • 5. Conclusions

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