An unlikely alliance just brought us one step closer to safer beauty products

In a rare move by two fierce competitors, Walmart and Target brought together stakeholders from across the U.S. beauty and personal care (BPC) industry in 2014 to drive safer, more sustainable products. This was bold considering that there was no consensus on the basic definition of product sustainability in an industry estimated at over $80 billion. After three years, a core group of eighteen organizations across the BPC value chain, including the Environmental Defense Fund (EDF), released the first science-based scorecard of 32 key performance indicators (KPIs), marking the most sweeping market demand signal for safer and more sustainable beauty and personal care products yet.

Why does this matter?

Beauty and personal care consumers increasingly care about the health and environmental impacts of the products they buy. A vast majority of 87 percent of consumers globally prefer products with “no harsh chemicals or toxins.” Millennial women are also driving demand for more sustainable products. To address this gap, Forum for the Future worked together with the Sustainability Consortium to facilitate the three year mission to “shift the beauty and personal care product sector into a more sustainable, thriving and resilient industry that serves the needs of people and planet both now and in the future.”

The scorecard is a breakthrough for quantifying product sustainability, or the degree to which a product does what it is supposed to do without harming the user, the makers, or the planet. To understand the full range of potential impacts of a product, it is important to evaluate the human health and environmental impacts of the product’s raw materials, processing, manufacturing, packaging, transport, sale, use, and disposal.  Consider that one supplier can make tens of thousands of different products, and this process can quickly become overwhelming. Add to that the fact that a retailer can sell hundreds of thousands of products. Trying to assess and improve sustainability of such vast product portfolios is daunting.

KPIs are important because they align and simplify the conversation by narrowing the focus to the most relevant environmental and social issues, or “hotspots.” Meaningful KPIs add clarity to key hotspots and incentivize suppliers to adopt more sustainable practices by assigning higher points to those actions.

The result

The new BPC scorecard focuses on four major “clusters” to characterize product sustainability:

  • Human Health – Human health impact of ingredients and product formulations
  • Supply Chain and Environmental – Resource usage (e.g. energy, water) and emissions during sourcing, manufacturing, and product use
  • Disclosure – Ingredient disclosure to consumers, and
  • Packaging – Environmental and health impacts of packaging decisions.

This scorecard is unique for two reasons. First the scorecard is publicly available.  While deciding how to share results will be up to individual companies, consumers can at least see where the sustainability conversations between suppliers and retailers are likely to be focused and can be comforted that the scorecard evaluates what’s in a product and packaging, not simply a company’s procedures. Second, the scorecard awards the highest number of points to the human health “cluster” (130 points out of 400 points). This is especially important considering that in the US regulatory oversight of chemical safety of personal care products is lacking. In the United States, only 30 ingredients had been partially banned, compared to 1,300 chemicals in European countries. The last federal law to regulate the safety of personal care products was passed in 1938.

Boma Brown-West, Senior Manager, Consumer Health, EDF+Business

Race to the top on store shelves

If the full scorecard is adopted and implemented industry-wide as intended, every retailer will apply uniform indicators. In theory, this alignment will both reduce the number of sustainability surveys required of suppliers and send a clear market signal for what types of products are most desirable. This is especially important for innovators, who are trying to determine where the markets are going, and what types of new products or ingredients will be accepted.

These collective actions should continuously improve market offerings for consumers while increasing consumer trust; retailers and others will be able to point to the quantifiable improvements the KPIs track as they engage with their customers on product sustainability. And shoppers are most likely to frequent retailers and purchase brands that they trust.

Getting to the best case scenario faces some hurdles.

The BPC group recognized human health impacts as critical to product sustainability and aligned on a Stewardship List [see box], a compilation of lists of chemicals identified by reputable authoritative bodies as known or suspected carcinogens, endocrine disruptors, reproductive toxicants, and PBTs. Despite major retailers’ existing focus on these lists, the group could not reach consensus on how much the reduction of the use of chemicals on the lists should contribute to a product’s sustainability score. This was disappointing to EDF; we hope that in the future, activity regarding the Stewardship List will be sufficiently rewarded in practice.

Retailers vary in their use of scorecards to track sustainability improvements across product portfolios; some have years of experience crunching sustainability data while others are just beginning the process. While scorecards are a powerful tool for product improvement, companies also need to have strong chemicals policies and strategies in place. One framework, which has influenced some retailers, is EDF’s Five Pillars of Leadership for advancing safer chemicals and products in the marketplace. Over the last few years, we have seen retailers issue chemicals policies, call for greater supply chain transparency and the reduction of chemicals of concern, as called for in EDF’s Five Pillars.

With any data collection system, technical challenges are also a factor. Different organizations work with different technology platforms to facilitate affordable data collection, analysis, and reporting; interoperability remains more a goal than a reality.

But EDF sees reasons to be optimistic.

The estimated $86 billion U.S. beauty and personal care industry just received the first comprehensive demand signal from the nation’s leading retailers for safer, more sustainable products. In a time when the government is shirking its role in driving a sustainable marketplace, it is powerful to see market leaders playing theirs. For consumer protection, we need both.


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Corporate America’s “moon shot”: Walmart’s Project Gigaton

 

At a time when leadership from the federal government is decidedly lacking, the launch of Walmart’s Project Gigaton is a cause for celebration. It is proof that companies can step up to advance solutions that will help business, people and nature thrive.

Just like Walmart itself, this is big.

The world’s largest retailer has launched an initiative to remove 1 gigaton (that’s 1 billion tons — billion with a “b”) of greenhouse gas emissions (GHG) from its supply chain by 2030. To put that in perspective, that is the equivalent of removing the annual emissions of Germany — the world’s fourth-largest economy — from the atmosphere. This audacious goal is impressive; it’s corporate America’s “moon shot,” and it shows real leadership.

Why? Because, according to The Sustainability Consortium, the modern supply chain is responsible for 60 percent of all greenhouse gas emissions, 80 percent of all water use and 66 percent of all tropical deforestation. And with the global population projected to swell to 9.5 billion consumers by 2050, it is clear there is not just a crucial opportunity for businesses to meet growing global demand, there is also a real need to protect the planet. Embracing sustainable practices is no longer an option for business. It is an imperative. The planet needs fast action at a massive scale.

So do forward-looking CEOs. Shareholders are rewarding resiliency when companies climate-proof their global operations. And customers, especially millennials, expect sustainability to be baked into the things they buy. In short, business is looking to drive bottom-line value, including growth, with sustainability.

Elizabeth Sturcken, Managing Director, EDF+Business

Which explains the significant Project Gigaton commitments being made by companies like Unilever (20 million metric tons of GHG reduction) and Land O’ Lakes (20 million acres sustainably farmed) and commitments made in the past six months by Apple, Amazon, Google, PepsiCo, Smithfield Foods and others.

Execution and delivery

But setting goals is just the first step. The execution and delivery must follow to complete this journey.

Which brings me back to this moon shot: Walmart cannot do this alone. Project Gigaton will take a village — in this case, the tens of thousands of companies that make up Walmart’s global supplier network — to make this goal a reality. And that’s a good thing: Eliminating GHG emissions at this scale will reverberate across entire sectors and industries. It will be the change to “business as usual” that’s long overdue.

That’s all fine and well, rhetorically. But what if you’re a CEO or CSR exec who’s facing the hard reality of “Where do I start”?

Some new research by Environmental Defense Fund starts to sketch out a roadmap to success — and illustrates the need for supply-chain partners to get on the bus. While we’re just at the beginning of a deep dive into the sustainability of the U.S. retail supply chain, our initial findings show two things:  the complexity and emission hotspots of box chain retailers and three clear, initial areas of focus:

  1. The supply chain is the largest source of emissions. If there was any doubt left, put it to rest: 80 percent of retail emissions occur in the supply chain; 12 percent are associated with the use and disposal of products and 8 percent come directly from retail operations — mostly buildings and facilities.
  2. Grocery is a huge hotspot and opportunity. Are you a retailer? Food company? Agricultural service provider? Farmer? Nearly half — 48 percent — of supply-chain greenhouse gas emissions come from the grocery category, which encompasses everything from fresh meat, veggies and dairy, to bakery, dry goods, beverages, snacks and frozen products. Together, these and other products emits 1.7 gigatons of GHGs (there’s that billion thing again). In other words, food production — and food waste — is definitely a place to make your numbers — and to make a difference. (Talk about low-hanging fruit!)
  3. Electricity is the biggest activity that contributes to emissions. From factories to farmhouses, whether powering a business or refrigerating an item at home, using electricity is the largest activity that produces emissions for consumer packaged goods production. Think about that: by tackling electricity use, whether from conservation or renewable energy, business leaders can not only run a more efficient operation, they can also engage their customers on which products to buy and how to best use them. That’s good business.

For those who have been paying attention to these issues for decades, these big opportunities won’t come as a surprise. But they help sharpen the focus for supply-chain professionals searching to answer the question of where to put effort and investment to get the most emissions-reduction results. Scale and speed are necessary. Knowing where to focus is critical. The EDF research is in the early stages and we plan to release the full results later this year.

In the meantime, kudos to Walmart. As suppliers make commitments for Project Gigaton that will drive reductions from factories to farms to forests to fleets, it will become imperative to identify hotspots to enable the largest impact. That’s exactly what drives innovation and the environmental impact we need.

The supply chain may be complicated, but the rewards are well worth it: thriving companies, thriving communities and a thriving planet.

Jump on the Project Gigaton moon shot. It’s leaving the launching pad, with or without you.


Follow Elizabeth on Twitter, @esturcken


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Sustainable Supply Chains: No More Excuses

ElizabethSturcken-(2)_287x377A question for forward-thinking business executives: if you could do something that would directly reduce more than 60 percent of all greenhouse gas emissions, 80 percent of water usage, and two-thirds of tropical forest loss globally… wouldn’t you do it?

The answer: yes, of course you would!  That’s why you’re forward-thinking!

That’s also why Environmental Defense Fund (EDF) has been working in supply chains (for years) to improve the impacts of the global production and use of consumer goods.

Those impacts are huge. Really getting at them, unfortunately, has not been so easy. The excuse that we’ve heard over and over again boils down to “you can’t manage what you can’t see.”  Basically, while most companies’ impacts are in their supply chain, most businesses have very little knowledge of how those supply chains actually function.  And, the further up in the chains you go, the less visibility there is.

EDF has a lot of first-hand experience with this: after years of on-the-ground work with farmers, our Ecosystems team knows precisely how difficult it is to capture impacts at the farm level.  Despite the on-farm benefits of optimizing fertilizer use in cost savings, reduced greenhouse gases and increased water quality, fewer than 20 % of companies collect this data.

TSC2011lgHow do I know that statistic? Because The Sustainability Consortium (TSC) has just released Greening Global Supply Chains: From Blind Spots to Hot Spots to Action, their first-ever impact report.  It’s full of stunning data about the huge weight that consumer goods place on people and the planet. Since it covers more than 80% of consumer goods product categories, it is the comprehensive way to understand environmental hot spots in global supply chains.

Which means the “no visibility” excuse is now officially over. Read more

Climbing Toward Corporate Sustainability, Even Walmart Can’t Do It Alone

ElizabethSturcken-(2)_287x377Ten years ago, the CEO of Walmart and the president of Environmental Defense Fund hiked together on Mount Washington in New Hampshire. Along the way, Lee Scott of Walmart (now retired) and Fred Krupp of EDF talked about climate change and the environmental challenges of our time. They also talked about ways that Walmart could drive positive environmental change in its product lines and operations.

The hike turned out to be the start of a ten-year journey of collaboration between Walmart and EDF, one that has helped define a new model of corporate sustainability.

In a speech that year, Lee Scott laid out three aspirational goals:

“Our environmental goals at Walmart are simple and straightforward:
1. To be supplied 100 percent by renewable energy.
2. To create zero waste.
3. To sell products that sustain our resources and environment.

These goals are both ambitious and aspirational, and I’m not sure how to achieve them…..at least not yet. This obviously will take some time…”

Lee Scott, Oct. 23, 2005

Now, on the ten-year anniversary of the 21st Century Leadership speech, EDF is taking a moment to take stock of how far this journey has taken us and the distance left to travel.

First, what have we achieved? Here are three of our proudest accomplishments:

EDF and Walmart - removing 20MMT of GHG from its global supply chain

Click to enlarge

1. Today, Walmart is announcing that it will surpass its aggressive goal of reducing 20 MMT of greenhouse gas emissions from its supply chain. In total, Walmart will reduce 28 MMT of GHG from its supply chain by the end of 2015. To achieve this goal, Walmart tackled a diverse range of projects: from helping end consumers through improving products like LED light bulbs; to creating a Closed Loop Recycling fund, and changing food date labeling to reduce waste; and working with EDF to conserve fertilizer use on over 20 million acres of U.S. farmland.

Overall, the 20 MMT reduction of GHG from Walmart’s supply chain is the equivalent of getting almost six million cars off the road.

Yes, EDF pushed Walmart to set this goal; but we also worked side by side with them to achieve it. It is this type of long-term collaboration that drives results at scale, an achievement foreshadowed by EDF president Fred Krupp when he said, "When you can get big companies to do important things, you can change the world."

2. In 2013, Walmart put a chemicals policy in place that is phasing out chemicals of concern in over 100,000 home and personal care products like laundry soap and shampoo. Private brand products now list all of their ingredients online so consumers have more transparency into what chemicals they are using in their home and on their bodies.

3. EDF and Walmart helped create the Sustainability Index, a tool powered by The Sustainability Consortium (TSC) that has evaluated billions of dollars of products on Walmart shelves. To date, 70% of Walmart suppliers have filled out the Index. Read more

Powerful Business: The Lever for Change Across the Supply Chain

Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.
-Archimedes

Sometimes when a problem seems too big, too ugly and too complex to handle, you need a lever to help move things along.  All of the big environmental problems we currently face fall into this category.

When it comes to tackling our planet’s biggest problems, there is a full spectrum of approaches and many different leverage points. For me, the most important lever is business. A thriving planet and a thriving economy don’t have to be at odds. EDF is focusing on helping businesses make their supply chains cleaner, more efficient and more profitable.

Working with powerful business has been a cornerstone of EDF’s approach ever since we launched our 1st partnership with McDonald’s 25 years ago. Since then, we have kick-started market transformations in fast food with McDonalds and Starbucks, shipping with FedEx, retail with Walmart, and private equity with KKR. With each partnership, we’ve worked to create new, sustainable demand signals that extend across the supply chain. When powerful business speaks, suppliers listen. EDF is helping the most impactful companies commit to selling sustainably-produced products, encouraging every supplier and producer contributing to those products to also adopt more sustainable practices. Read more