Story Arc The Ohio State University Jon Johnson Walton College Professorship of Sustainability Sam M. Walton College of Business 1 The Basics The Sustainability Consortium (TSC) Vision To advance science to drive a new generation of innovative products and supply networks that address environmental, social, and economic imperatives • Founded (2009) by UA and ASU Enabling the consumer goods • Membership organization (~100 members) industry to do things that matter Mission – Corporate, academic, NGO, commercial associations, government about things that matter. • >20 FTE staff, plus students and contractors To design and implement credible, – Kara Hurst, CEO transparent and scalable science-based – Jon Johnson (UA-Walton College) & Kevin Dooley (ASU-Carey School), measurement and reporting systems Academic Directors accessible for all producers, retailers, – Internationally dispersed and users of consumer products Expanding from knowledge/metrics creation Action •
TSC’s multi-stakeholder approach allows for TSC’s membership represent over $1.5 trillion in revenue… pre-competitive collaboration… Board of Directors Academic Advisory Council Administering Academic Universities Governance Partners Civil Corporations Society Organizations Corporate Civil Society Advisory Council Advisory Council TSC’s Board of Directors represent all stakeholder groups across several industries… And is growing… Academic collaborators include… Industry partners contribute to the success of TSC everyday…
Structured into industry defined working groups (+) Context: The Walmart Problem $120,000 • Initial driver and funder of TSC • TSC output supports the Walmart $100,000 “Index” HOME & FOOD BEVERAGE & ELECTRONICS $80,000 AGRICULTURE PERSONAL CARE • Strong supporter of multistakeholder collaboration, including other retailers $60,000 $40,000 PAPER, PULP, PACKAGING TOYS & FORESTRY $20,000 $0 MEASUREMENT CLOTHING, FOOTWEAR RETAIL SCIENCE* & TEXTILES Context: The Walmart Problem in High Relief Context: Interests Between Stakeholder Groups $500,000 • Perception that Walmart controls • Resources $450,000 TSC: They do not. – Money $400,000 • TSC has many retailers, ~100 Corporations NGOs – Expertise $350,000 members • Perception that Walmart’s actions – Credibility $300,000 have industry-wide consequences • Governance $250,000 (vertical and horizontal): They do. Trade – Organizational $200,000 Academics • They are obviously an important Associations – Technical $150,000 player, but not the only important • Interests $100,000 player. $50,000 Consultants- – Complex dyads+ Government Certifiers- $0 • Membership Agencies DB Providers – Selection – Recruitment – Management 11
Context: Interests Across Supply Chains Initial Vision: Scientific basis for a harmonized system of product labels in a world of… Producers Producer Groups Contract Manufacturers Input Trade Associations NGOs Providers Branded Manufacturers Ecolabelling.org Retailers Trade Associations Consumers 12 And… SMRS V1.0: Life Cycle Assessment Based, Product Level (SMRS = “Sustainability Measurement and Reporting Standards”) LCA 101: The Unit Process Direct Emissions (scope 1) Product Output Finished Good Purchased Inputs Assembly Direct Extractions
SMRS V1.0: Unit Processes Product Life Cycles SMRS V1.0: Life Cycles Span Supply Networks SMRS V2.0: A hybrid approach SMRS V1.0: LCA Based, Product Level (SMRS: “Sustainability Measurement and Reporting Systems”) PRIMARY A pure LCA approach is DATA not economically scalable across all consumer products BASELINE LCA MODEL FOR A pure "best practices" IMPACTS PRODUCT approach lacks CATEGORY precision and tends to weigh each best practice equally, TSC SUSTAINABILITY regardless of impact PERFORMANCE SCOPE DRIVERS (VARIABLES & ATTRIBUTES) 18 19
SMRS V2.0: US Tax Code analogy SMRS V2.0: Three step reporting Reporting Category 1 (optional) OPTIONAL FOR OPTIONAL REQUIRED POSITIVE DRIVERS Reporting Category 2 Other BASELINE Schedules & PRIMARY DATA LCA Reporting Category 3 forms 1040 1040 AND THEIR FOR EZ LONG FORM 1040 IMPACTS Reporting Category 4 PRODUCT 3. Every product potentially has CATEGORY 1. Every product : different scores has same scores BASELINE MODEL SUSTAINABILITY PRIMARY OR PERFORMANCE PROPRIETARY DATA DRIVERS PRE-DEFINED 2. Every product with same attributes has same SUSTAINABILITY scores PERFORMANCE A SMRS should support all three reporting alternatives DRIVERS AND THEIR IMPACTS http://www.open-io.org 20 21 SMRS V3.0: Product Category Level SMRS V3.0: Process Flow • Knowledge products aimed at B2B actors, focused on product categories • Entirely new system and processes TSC members, invited experts form Panel to address a set of categories 1 Category Sustainability Key Performance Category Dossier Profile (CSP) Indicators (KPIs) Develop KPI’s Panel is surveyed, 2 5 through generates hotspots and workshops improvement opportunities DOSSIER CSP List of hypothesized hotspots and List of assessed hotspots and KPI’s improvement opportunities improvement opportunities TSC staff aggregate TSC staff assess 3 4 hotspot survey data, published research published research, classify as hotspot, and relevant previous additional issue, Collection of evidence on Synthesis of product Metrics / questions to work stakeholder concern; sustainability knowledge measure and track product product category and its document in Dossier and improvement category sustainability and final CSP supply chain, environmental opportunities and social hotspots, and improvement opportunities
SMRS V3.0: SAP driven reporting platform rolling out now… …to be used by buyers and suppliers to address product sustainability in a cost efficient way TSC provides Buyers v v v v v v Communicate efficiently • Hotspots Retailers and effectively with suppliers: • Improvement • Ask category-specific questions opportunities • Track supplier performance using KPIs Improved • Key Performance Manufacturers TSC product Indicators Supplier sustainability Suppliers Request v v • Category v v v v v and cost Address product sustainability Sustainability more effectively and efficiently: Profiles efficiency KPI KPI • Use a single reporting tool across buyers Response Questions • Enhance product development • Reduce spending on sustainability Reporting research and reporting Platform(s) • Evaluate quality of input materials Hotspot: Sustainability focused social and environmental high impact areas Walmart Use Case Marks & Spencer Use Case TSC has revolutionized the process… “ The Sustainability Consortium Company 1 2012 and beyond has begun delivering tools to Company 2 Before 2009 Company 3 our product buyers to help us Company 4 evaluate product and supplier Company 5 1. Wine team requests attribute in bulk sustainability...We have started 1. Wine team requests attribute in bulk Company 6 integrating this work into our shipping Company 7 shipping buying processes.” Company 8 Company 9 2. Sustainability Manager looks up the Company 10 – Dunc an Mac Naughton, Walmar t 2. Sustainability Manager spends weeks on product Category Sustainability Profile Company 11 Google, talking to wine experts and trying (CSP) and looks at the hotspots. The to find LCA information on bulk shipping Manager also finds that Bulk Shipping does appear in the Key Performance “ I ’ m really proud of what the 3. Sustainability Manager cannot find Indicators merchandisers have appropriate information and tells the buyer done…[The sustainability that the category is not approved index] is really complicated 1. Sustainability Manager looks at the stuff, and it's giving buyers Dossier and finds that the supplier in 4. The buyer is completely discouraged and information to help form question is 50% less than the industry decisions and compare gives up in sustainability standard in carbon footprint. products. – R ob Walton, Walmar t 5. No progress is made in the wine category 2. Sustainability Manager sends an email the same day to notify the team that Bulk Shipping is approved.
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