ASTM E3200-21
(Guide)Standard Guide for Investment Analysis in Environmentally Sustainable Manufacturing
Standard Guide for Investment Analysis in Environmentally Sustainable Manufacturing
SIGNIFICANCE AND USE
5.1 This guide provides a method for evaluating investments in terms of their financial merits and environmental merits. This guide can be used to answer whether an investment is both economical and environmentally sustainable or if there is a tradeoff between the environmental aspects of manufacturing and profitability. In the event that there are tradeoffs, this guide provides methods for evaluating those tradeoffs.
5.2 The financial merits for this guide are typically from the individual stakeholder perspective (for example, owners or investors, or both) or from the perspective of a selection of stakeholders. It is up to the users to decide what financial changes are relevant to them. For instance, if there is a financial cost borne by a third party, the users may opt to exclude it from their analysis, as it is not relevant for them. The environmental merits are from a multi-stakeholder perspective (for example, societal level) and should follow established standards for evaluating environmental aspects of manufacturing. That is, environmental aspects of manufacturing should not be excluded simply because they do not affect the user.
SCOPE
1.1 This guide covers techniques for evaluating manufacturing investments from the perspective of environmentally sustainable manufacturing by pairing economic methods of investment analysis with environmental aspect of manufacturing, including manufacturing processes.
1.2 The economic techniques discussed include net present value, internal rate of return, payback period, and hurdle rate. These four techniques are deterministic, meaning that they deal with known values that are certain. Probabilistic considerations play no role in determining how these four techniques are deployed. The guide will also move beyond standard deterministic techniques to look at probabilistic methods like the concept of sensitivity analyses with a focus on Monte Carlo analyses.
1.3 The techniques can be used by manufacturers, regardless of size or complexity, to make environmentally sustainable decisions, including but not limited to whether to embark on an investment, discontinue a manufacturing line, invest or re-invest in a new project or factory. To outline all possible decision types would constitute a guide in itself.
1.4 This guide does not assume specific knowledge of financial techniques on the part of the user, besides some knowledge of discounting. The interested reader is encouraged to follow up and consult outside readings to cover financial techniques beyond the scope of this guide.
1.5 This guide uses U.S. dollars, percent change in environmental aspects of manufacturing, and unit change in environmental aspects of manufacturing as its primary units.
1.6 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.
1.7 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
General Information
Relations
Standards Content (Sample)
This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the
Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
Designation: E3200 − 21
Standard Guide for
Investment Analysis in Environmentally Sustainable
1
Manufacturing
This standard is issued under the fixed designation E3200; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope 1.7 This international standard was developed in accor-
dance with internationally recognized principles on standard-
1.1 This guide covers techniques for evaluating manufac-
ization established in the Decision on Principles for the
turing investments from the perspective of environmentally
Development of International Standards, Guides and Recom-
sustainable manufacturing by pairing economic methods of
mendations issued by the World Trade Organization Technical
investment analysis with environmental aspect of
Barriers to Trade (TBT) Committee.
manufacturing, including manufacturing processes.
1.2 The economic techniques discussed include net present
2. Referenced Documents
value, internal rate of return, payback period, and hurdle rate. 2
2.1 ASTM Standards:
Thesefourtechniquesaredeterministic,meaningthattheydeal
E833 Terminology of Building Economics
withknownvaluesthatarecertain.Probabilisticconsiderations
E1057 Practice for Measuring Internal Rate of Return and
play no role in determining how these four techniques are
Adjusted Internal Rate of Return for Investments in
deployed.The guide will also move beyond standard determin-
Buildings and Building Systems
istic techniques to look at probabilistic methods like the
E2114 Terminology for Sustainability Relative to the Perfor-
concept of sensitivity analyses with a focus on Monte Carlo
mance of Buildings
analyses.
E2921 Practice for Minimum Criteria for Comparing Whole
1.3 The techniques can be used by manufacturers, regard- Building Life Cycle Assessments for Use with Building
Codes, Standards, and Rating Systems
lessofsizeorcomplexity,tomakeenvironmentallysustainable
decisions,includingbutnotlimitedtowhethertoembarkonan E2986 Guide for Evaluation of Environmental Aspects of
Sustainability of Manufacturing Processes
investment, discontinue a manufacturing line, invest or re-
invest in a new project or factory. To outline all possible E2987/E2987M Terminology for Sustainable Manufacturing
E3096 Guide for Definition, Selection, and Organization of
decision types would constitute a guide in itself.
Key Performance Indicators for EnvironmentalAspects of
1.4 This guide does not assume specific knowledge of
Manufacturing Processes
financial techniques on the part of the user, besides some
3
2.2 ISO Standards:
knowledge of discounting. The interested reader is encouraged
ISO 14025 Environmental labels and declarations — Type
to follow up and consult outside readings to cover financial
III environmental declarations — Principles and proce-
techniques beyond the scope of this guide.
dures
1.5 This guide uses U.S. dollars, percent change in environ-
ISO 14040 Environmental management — Life cycle as-
mental aspects of manufacturing, and unit change in environ-
sessment — Principles and framework
mental aspects of manufacturing as its primary units.
ISO 14044 Environmental management — Life cycle as-
1.6 This standard does not purport to address all of the sessment — Requirements and guidelines
ISO 14049 Environmental management — Life cycle as-
safety concerns, if any, associated with its use. It is the
responsibility of the user of this standard to establish appro- sessment — Illustrative examples on how to apply ISO
14044 to goal and scope definition and inventory analysis
priate safety, health, and environmental practices and deter-
mine the applicability of regulatory limitations prior to use.
2
For referenced ASTM standards, visit the ASTM website, www.astm.org, or
contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM
1
This guide is under the jurisdiction ofASTM Committee E60 on Sustainability Standards volume information, refer to the standard’s Document Summary page on
and is the direct responsibility of Subcommittee E60.13 on Sustainable Manufac- the ASTM website.
3
turing. Available from International Organization for Standardization (ISO), ISO
Current edition approved Feb. 1, 2021. Published March 2021. DOI: 10.1520/ Central Secretariat, BIBC II, Chemin de Blandonnet 8, CP 401, 1214 Vernier,
E3200-21. Geneva, Switzerland, http://www.iso.org.
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