S-eco-costs calculation

This webpage describes the socio-economic costs (s-eco-costs) calculation method for monetization of ‘external’ socio-economic burden for workers.
The aim of the s-eco-costs method as presented in this paper is:
1. to focus on the unsustainable and appalling working conditions in the supply chain (suitable for cradle-to-cradle analyses as well)
2. to quantify product related social topics (child labour, extreme low wages, unsafe work places, et cetera)
3. to quantify results of S-LCA in a way that the unsustainability of products are comparable and can be communicated to designers, business managers and the public
4. to provide transparency in the calculations of the (sub)category indicators, based on general statistical data (World Bank, ILO, Eurostat, etc.) and/or specific data which can easily be measured at the production sites
5. to be complementary to and combinable with the eco-costs system for (E)-LCA, which means that the seco-costs have to result in monetized indicator.

The s-eco-costs are the marginal prevention costs to reach a sustainable level (the Performance
Reference Point, PRP) for wages and are the monetary compensation costs beyond the PRP to account for unacceptable exploitation of workers.
The s-eco-costs (in €) include five sub-indicators, proposed as a base-line for several social issues:

  • Minimum Acceptable Wage (the long term sustainable wage, or the short term decent living wage)
  • Extreme Poverty (income not enough for foot)
  • Child Labor (forced labor, not able to attend school)
  • Modern slavery
  • Excessive Working Hours (forced labor, involuntary)
  • Occupational Safety and Health (based on statistics of ILO)

There are basically two  ways to calculate the burden of unacceptable exploiting of workers: (1) calculation the damage via impact pathways, which are cause-effect chains (2) the use of so called

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Performance Reference Points (PRPs). In a broad study on how to define and structure S-LCA (UNEP/SETAC, 2009) [5] the method of the PRPs is preferred for quantitative assessments (see page 70), since “cause-effect relationships are not simple enough, or not known with enough precision to allow quantitative cause-effect modelling”. In fact this is the same argument to prefer prevention based indicators in LCA (in contrast to damage based systems) in the eco-costs system.