BSR Conference 2012: Fast Forward / October 23-26 / New York

The Search for Sustainable Products: Collaboration and Competition

Two-Hour Working Session Session / October 24, 2012

Speakers

  • Carli Rosencranz, Senior Buyer, Hot Beverages, Walmart
  • Roman Smith, Director, Sustainability Operations, Corporate Sustainability and Philanthropy, AT&T
  • Michael Murphy, Executive Director, Worldwide Regulatory Compliance Engineering and Environmental Affairs, Dell, Inc.
  • Brittni Furrow, Senior Manager of Sustainability, Walmart Stores, Inc.
  • Christy Melhart Slay, Ph.D., The Sustainability Consortium, Research Manager and Biodiversity Project Leader
  • Eric Olson, Senior Vice President, Advisory Services, BSR (Moderator)

Highlights

  • Embedding sustainability into merchandising employees’ existing systems, metrics, and employee performance enables deeper change and space for interested employees to innovate.
  • Multi-stakeholder initiatives can help drive transparency and enable parties to work from the same playbook—but are often impeded by competitive knowledge that reduces industry-wide sharing.
  • New challenges require new models that involve multiple parties internally and throughout the value chain to drive ownership and ultimately change.

Memorable Quotes

“We don’t have to wait to act until [the sustainability scorecard] is perfect; otherwise we wouldn’t be talking about this for another 20 years.” —Brittni Furrow, Walmart Stores, Inc.

“Bringing science to the table can help pull new levers by creating a common, credible language.” —Christy Melhart Slay, The Sustainability Consortium

“Account managers are now addressing how the supplier sustainability portfolios are managed, allowing us to have more active conversations and establishing understanding with suppliers.” —Michael Murphy, Dell

Overview

Olson kicked off the discussion with a set of themes digging into identifying and delivering the challenges and opportunities of more sustainable products—particularly, how do we define a more sustainable product, and what tools and support do players need to be successful?

The panel represented stops along the global value chain, including buyers, a multi-stakeholder initiative, manufacturers, sustainability departments, and consumer-facing businesses. Buyers like Walmart are interested in using transparency to protect both ends of the supply chain, from raw material providers to customers. The multi-stakeholder Sustainability Consortium (TSC) is dedicated to the “science of sustainability,” and pulling the science lever to motivate change. Dell uses its manufacturer and retailer perspective to cite the need to combine both proprietary and multi-stakeholder work based on science to drive progress. Within merchandising, Furrow highlighted the importance of embedding scientific sustainability into supply chain and merchandising engagement to drive improvements. Smith said AT&T leverages its retail relationships with suppliers and investment in environmental metrics to create an eco-label for consumers that is consistent with the industry and existing requirements, while creating a path for further improvements.

Olson asked how these different portions of the value chain can help business-focused as well as end-user-focused buyers make sense of sustainability and use it in their work. Furrow laid out Walmart’s co-creation of embedding sustainability into merchandising with the merchandising department from the beginning, and then setting sustainability goals for employee performance, compensation, and other areas to motivate ownership and momentum. Complementing this with hands-on training, actionable tools, and embedding sustainability work into the orientation and mindset of all levels of the organization has allowed Walmart to drive deeper engagement and uptake internally.

Given Dell’s multiple roles within the value chain, Murphy outlined a multi-pronged approach to guiding standardization, while connecting eco-labels and rating systems to Dell’s existing work and strategy for alignment. He cautioned that competition can impede progress, and this reduced level of transparency can make multi-stakeholder initiatives and individual company undertakings slower and more difficult.

Focusing on these companies’ efforts at various levels of the value chain can provide lessons learned to move the sustainability agenda forward faster, collaboratively. Slay framed her experience at TSC as living in “mosquito years”—they’ve undergone an immeasurable amount of learning during the organization’s short existence. She cited transparency and getting all actors at the table to move forward as challenges to understanding what issues exist and how to approach them. Yet the tremendous amount of knowledge-sharing between TSC and companies has allowed all parties to gain fuller perspectives and move faster on the key issues.

During the question-and-answer session, Furrow responded to a question about Walmart’s current sustainability expectations for suppliers—the initial 2009 scorecard rollout caused supplier panic—by highlighting the company’s internal focus and partnership with TSC to use science as a metric to develop the next generation of supplier sustainability expectations. She recognized that the old scorecard was not specific enough to be actionable, whereas their new efforts will be able to drive measurable improvements.

The working session’s breakout focus groups then shared a number of insights, including:

  • What buyers need to integrate sustainability into purchasing decisions, notably a jargon-free common language, the need to clearly explain how sustainability data is gathered and what they mean to suppliers and internal teams, and a recognition that engagement and conversations drive change faster and deeper than scorecards.
  • The benefits and challenges of multi-stakeholder initiatives, including that working within a framework allows parties to get on the same page faster, but that competitive attitudes and issues may need to be managed to make progress possible, and that government has a potentially interesting role to play within these initiatives.
  • Strategies for increasing consumer engagement and sustainable purchasing will need to balance collaboration and competition to reduce overwhelming customers with often-confusing eco-labels; and although a focus on the positive attributes of a product may reach more consumers, an inherent risk exists when all of a company’s practices do not align with sustainability messaging. Providing multiple layers of consumer engagement allows individuals to decide the extent to which they want to engage.
  • From the supplier perspective, new challenges like sustainability require new approaches—not old models that have not worked. Walmart’s framing of its investments in sustainable products as a long-term customer protection strategy allows the company to invest today despite low levels of consumer demand. Finally, the design process has room for innovation and focused work to allow members internally and along the value chain to offer new insights into sustainable products and processes.


Thank You, Sponsors

Executive Sponsors

Cisco Hitachi PwC Target UL Responsible Sourcing

Associate Sponsors

Anheuser-Busch InBev

Supporting Sponsors

Adobe AT&T ExxonMobil Green Mountain Coffee Roasters, Inc.

Participating Sponsors

American Express Baker & McKenzie LLP Best Buy BNY Mellon Ford Hyatt Hotels Corporation The Walt Disney Company UPS Vale

Contributing Sponsors

Chevron icix Levi Strauss & Co.

Convening Media

Bloomberg Business Week Weber Shandwick

Marketing and Media

3BL Media BEF Caixin Media Corporate Knights Globescan GreenBiz Group Inc. Hemlock Responsible-Investor Sina Stanford Social Innovation Review (SSIR) Tomorrow Partners