How cows, chemicals and Walmart benefit from sustainability metrics

Last week, we looked in to Walmart's use of the metrics underlying the Sustainability Index to drive changes in its supply chain. Presented at a panel the Sustainable Brands conference in San Diego, Walmart's Jeff Rice was just one of several corporate leaders to share how they plan to use The Sustainability Consortium's measurement systems to boost efficiency throughout their supply chains.

In addition to Rice, Walmart's director of sustainability; also participating in the panel were Cristian Barcan, director of sustainability with the nutrition and health division at BASF; James Reagan, senior vice president of research, education and innovation at the National Cattleman's Beef Association; Mike Faupel, director of operations at TSC; and Charlene Wall-Warren, sustainability leader for BASF North America who served as moderator.

The TSC is ramping up its development of metrics to help in the process: This year, the group will complete metrics for 100 product categories that include apparel, food, toys, personal care, automotive, electronics and paper. Of these, it's made the most progress in food and beverage reporting tools.

And over the next couple years, it will roll out metric tools for several hundred categories of products. Walmart is working with the TSC to go beyond that and develop tools for up to 1,500 categories of products that it will eventually use internally.

The BASF's Barcan put the need for this vast undertaking in perspective.

"With 9 billion people on Earth, and the need to use as much as two-and-a-half planets' worth to satisfy demand at current pace, changes need to happen," Barcan said.

He stressed the importance of being more holistic and sustainable, of going beyond price and focusing on delivering value by collaborating and using measuring tools. "Forget about measuring, we don't even know what we have on hand today."

He said what BASF does, with its plethora of products, is comparable to Walmart, except at the other end of the supply chain; this drives the need to start thinking about value along the entire supply chain, not just parts of it.

"Sustainability has to be a continuous improvement over time -- it never stops," Barcan said.

To this end, BASF has taken the Sustainability Measurement and Reporting System (SMRS) framework developed by the consortium a step further and made it more elaborate, with hotspot analysis that draws on interviews with suppliers for data; and eco-efficiency analysis which does a comparison between various environmental, social, economic and life cycle factors.

BASF has forged new frontiers with its progress in developing some of these metric tools, so much so that organizations like the beef association have asked for its help to develop their own life cycle analysis tools.

Reagan, with the beef association, said beef cow population has declined significantly since the 1980s and a majority of cattle operations have fewer than 50 beef cows, that make for some tough challenges the industry is dealing with, which prompted its foray into sustainability analysis, with the goal of improving efficiency.

"To address the challenge, we must improve sustainability through out the beef industry. We plan to conduct a comprehensive cow/calf-to-plate sustainability assessment of the U.S beef industry -- quantify all system inputs and outputs and identify areas for improvement. This is the first time this has ever been done," Reagan said.

The beef association has completed its initial survey and modeling this spring, has begun the life cycle analysis work and will roll it out to the industry in January 2013.

Asked what he expects will be the outcome of the analysis, he said they won't know until the see the results.

Barcan qualified this by explaining that people expect certain outcomes when they begin such projects but that is wrong, since the very reason you undertake such analysis is to quantify what you don't know and look for holes and opportunities.

The association is measuring factors such as feed, manure and fertilizer usage on the pre-harvest side with cows; and on the post-harvest side is looking at energy, water usage and packing materials used in packaging and processing.

Reagan said the association looked at different companies to help with the project and found BASF to be the best fit. "They've made so much progress in sustainability, we consider them a leader -- no one else we found had done the same work or had as much progress."

BASF is a contracted consultant for the association.

The panel wrapped with a workshop that divided the audience into groups to look at what should be the key factors to be measured in developing sustainability metrics for different products like milk, apparel and eye glasses - an exercise that drove home the fact that even before developing metrics, deciding on what to measure is in itself a challenging task.

_{Photo courtesy of Sustainable Brands.}