Quantification of corruption in preventative cost-based S-LCA: a contribution to the Oiconomy project

Corruption is one of the key social aspects, heavily impacting all three Planet-, People- and Prosperity sustainability pillars and is therefore essential to be included in S-LCA. The objective of this article is to consider the available options to quantify corruption in preventative cost-based S-LCA, and to make a first proposal for quantification.

Literature was investigated on potential S-LCA assessment methods of corruption. To date, such literature is hardly available, so more generally, S-LCA methods were assessed on described concepts and ideas, and assessed on five criteria. Following this, using the obtained conclusions and ideas, a proposal for the quantification of corruption for the preventative cost-based Oiconomy system was developed, following the five-step Oiconomy method (Croes and Vermeulen in J Clean Prod 102:178-187, 2015).

Based on some examples, Dreyer et al. (Int J Life Cycle Assess 15(3):247-259, 2010) argue that various social aspects, including corruption, are better assessed by companies' preventative efforts than by their impact. Therefore, modifying a method developed by Dreyer et al. (Int J Life Cycle Assess 15(3):247-259, 2010), an indicator is proposed provided by the product of the marginal preventative costs and the quality of a companies' preventative governance. For the aspect of corruption, the internationally accepted target is "zero tolerance." Literature shows that the ultimate business choice under pressure of corruption is "not doing the business." Because profitability is the main driver for companies, refraining from the business is proposed as the marginal preventative measure, and the related profit as the maximum quantitative indicator for S-LCA. For the risk factor, a technique is proposed based on scoring a company's governance quality by checking the four Plan-Do-Check-Act effort classes of common risk-based certification standards' criteria.

Our assessment shows a definite need for the inclusion of the aspect of corruption in S-LCA, but no options for a reasonably certain assessment are available for the aspect of corruption in impact-based S-LCA, also suitable for the preventative cost-based Oiconomy system. However, based on literature-derived ideas and principles, for the Oiconomy system, we could propose both a performance reference point and marginal preventative costs as a quantitative measure for corruption. The proposed measure is not paying the bribe, but the proposed indicator is a governance quality-dependent fraction of the consequentially lost profit margin. Consequences, limitations and possible objections to our proposed methods are discussed.