Hundreds of millions of products are for sale on Amazon, including those sold by the e-commerce giant itself and items offered through its marketplace, which is made up of third-party sellers who sell new or used goods alongside Amazon’s own offerings.
Now, a new startup called Finch is on a mission to rate those products for their environmental impact throughout their lifespan — from manufacturing to disposal. It's starting with items representing 40 categories, including personal care, and bathroom and home cleaning supplies.
To do this, Finch uses a proprietary algorithm that assesses products on what they’re made of, how they’re created, how long they last and all the stages in between.
"Most people do most of their shopping on Amazon," said Lizzie Horvitz, founder and CEO of Finch. "And so we thought to reach the largest amount of people, instead of driving them away from what they already do, we could just have a browser extension that operates within Amazon."
Horvitz, part of the 2017 GreenBiz 30 Under 30, previously held positions at Unilever, as a distribution services analyst and then as associate manager of the company’s Sustainable Living Plan, during which she tracked Unilever North America’s progress and engaged stakeholders on its sustainability initiatives.
Finch has raised nearly $1 million from angel investors, including Ryan Hudson, co-founder of Honey, which offers a free browser extension that aggregates discount codes for online retailers.
Its Google Chrome browser extension launched in beta in May with 50 users — and about 1,500 more people on the waitlist, who Finch plans to grant access to in batches by the end of the summer. "One of the things we're trying to learn in these early days are, how people shop and what their preferences are," Horvitz said.
At this point, Finch uses only publicly available data, such as SEC filings, sustainability reports, academic papers and "anything we can find about products and brands," which it compiles into a database. From there, it uses machine learning to scrape product details off of Amazon and give each product a score.
So far, it has rated thousands of products on Amazon. Horvitz said if a company has a product on Amazon right now, the likelihood of Finch rating it at some point is very high.
Finch rates products from 0 to 10, with 0 to 3.4 being in the red (aka not great) and 6.5 to 10 being green. And that rating is displayed on the side of the Chrome browser. "Green means we’ve verified that the company supports people and the planet, that the product is among the least harmful in its category, and that it is enjoyable to use," reads the company’s rating system cheat sheet. The company noted that no product will get a 10 rating, "as there is no way a disposable consumer product can really be truly free of negative impact."
To determine a rating, Finch takes into account what happens at various stages of a product’s life cycle:
- Making it: the environmental impact of the materials used, working conditions at manufacturing sites, and a company’s internal practices
- Moving it: transportation methods used by a company to move stuff around
- Buying it: how much something actually costs and how accessible it is to people of all backgrounds
- Using it: direct and indirect inputs, the lifespan of products and real reviews about how well a product works in real life
- Ditching it: what happens at the end of a product’s life and whether products and their packaging is recyclable, biodegradable, circular, etc.
In recent years, there have been calls for companies to be more transparent about their environmental impact. In August, EDF+Business released a report that outlined how the world’s biggest e-commerce retailers — such as Amazon, eBay and Walmart — could use their influence to benefit the environment and their bottom lines. One of the steps was to help consumers make "sustainable choices" by providing them with more information about the products they sell.
"We definitely see some movement in [companies] trying to communicate to consumers some more information about environmental or health impacts of products," Boma Brown-West, who authored the report, told GreenBiz at the time. "But we haven't seen the full experience."
Amazon already has its Climate Pledge Friendly program, which adds a label to products across its site that are certified by one or more of the program’s qualifying sustainability certifications, including its own Compact by Design certification, Bluesign, Carbonfree Certified, Cradle to Cradle Certified and Fairtrade International.
There are plenty of companies that are being hugely transparent and should be congratulated for that. The problem with that is consumers don't understand how to get that information.
Finch clearly sees the opportunity here.
"For us, it's not only transparency, but it's also the ability to compare apples to apples," Horvitz said. "There are plenty of companies that are being hugely transparent and should be congratulated for that. ... The problem with that is consumers don't understand how to get that information." They also might not know how to understand it.
"Imagine if you walk into a grocery store, and the only thing with calories on it is margarine," Horvitz said. "That's not that helpful because you don't know if that's necessarily high or low, or how that compares to other foods."
To be sure, Finch isn’t the only browser extension that offers this kind of information. As just one example, Neutral offers emissions info for a product over its entire life span. Horvitz said that one factor that makes Finch different is that it’s staying away from offsets, meaning it is not offsetting the climate impact of a product.
"A lot of companies are using carbon offsets to incentivize change … In the consumer space, I have not found the ability to vet these offsets in the way that they really deserve," she said. "In other words, I'm not convinced that if you're planting a tree today, it might not be cut down in 50 years, in which case, you're sort of doing double the damage."
Instead, the company is planning to encourage users to purchase higher-rated products and to give them affiliate links. Once Finch launches this feature, it would receive an affiliate fee for sending a consumer to the product site.
This is one way the company would make money. "We would then split that with the end consumer so that you as a consumer are monetarily incentivized to make these better decisions," Horvitz said.
The company noted that its affiliate business is completely separate from its ratings team. It said it plans to always recommend the highest-scored products, regardless of its affiliate partnerships.
In the long term, Finch plans to expand to other e-commerce sites. So, how can other e-commerce companies and consumer brands benefit from Finch’s machine learning experience with Amazon? Horvitz said her company can offer retailers two types of data. The first is sustainability data.
"Not every company is lucky enough to have a chemist on staff or the ability to pay for life-cycle analysis," Horvitz said. "What we can do is parse out the important aspects of certain product categories."
For example, if Finch is working with a shampoo company, it might be able to share that 80 percent of a given product's carbon footprint is related to packaging and then advise it to spend its energy on buying post-consumer recycled materials to address that and share resources for how to accomplish the goal.
"I wouldn't necessarily call it consulting, but … that's data as a service that would [have] a monthly subscription fee," she said, noting that selling aggregated data to brands is part of Finch’s business model.
The other type of data Finch will be able to offer to e-commerce retailers and CPG companies is customer insights.
Not every company is lucky enough to have a chemist on staff or the ability to pay for life-cycle analysis.
"There's a massive gap between intention and behavior for shoppers and for people in general because we don't know ourselves as well as we think we do," Horvitz said, noting that when you ask someone if they would spend an extra $3 on a sustainable tennis shoe, people would say, ‘Of course!’
"In reality, at checkout, it's a very different story," she said. "Companies are spending hundreds of thousands of dollars on focus groups to learn what their sustainability strategy should be. And they're getting inaccurate information."
Horvitz noted that all the data Finch plans to share with companies is aggregated and anonymized so they won’t have access to personal data. For example, it might report: Women ages 25 to 40 were 20 percent more likely to buy Seven Generation diapers than Pampers. And they were willing to spend an extra $5 on sustainable diapers, but not an extra $7.
From there, the companies would be able to use that information to adjust their product strategy — and potentially change the scores that show up in the Finch extension, if they improve the sustainability of their products.
"I think what companies are missing is that user journey," Horvitz said. For example, Amazon has data that allows it to show a shopper similar items that other shoppers considered when searching the site, but it doesn’t have access to the data about the end result: what the shopper actually purchased and why.
Finch wants to close that information gap.