Two Steps Forward

The Sustainability Consortium: A Status Report

Since its launch in July 2009, The Sustainability Consortium has been the subject of intrigue, not to mention myths and misunderstanding. Founded initially at the behest, and funding, of Walmart, it now boasts a membership of 75 or so companies, plus nonprofits and government agencies, plus affiliations with more than a score of academic institutions around the world. Just last week, the group, which is housed jointly at Arizona State University and the University of Arkansas, announced it was planting a flag across the Atlantic, with affiliations at universities in the U.K. and The Netherlands.

But what, exactly, is the group doing? Is it, as some would have it, creating a rating system for products? Is it establishing standards by which products will be certified as sustainable? Is it merely a cover organization for companies seeking to appear proactive?

None of the above. During 2011, the consortium seems to have found its footing, conducting research and building tools to help deliver science-based thinking to manufacturers, retailers, and others. In April, it hired its first fulltime executive director: Bonnie Nixon, formerly a sustainability executive at Hewlett-Packard and, before that, founder of an environmental consulting firm. Earlier this month, Nixon issued a 100-day assessment and plan, her first official statement. It listed more than a dozen activities and achievements the group had undertaken since her arrival.

Last week, I spoke with Nixon to learn more: the consortium's ambitions and plans, and where the group is headed over the coming year. Following is an edited version of that conversation.

Joel Makower: You've been at The Sustainability Consortium for a little over four months now. Is it everything you expected?

Bonnie Nixon: In many ways it's even more exciting than what I expected. As I've gotten more and more grounded with it, and met with most of the members and all of the staff and many people externally, it's become clear to me the space in which we need to be playing, the space that creates a tremendous opportunity and momentum for us.

Makower: So what space is that?

Nixon: I was hired under the premise that I focus on three things. One was delivery. The second was internationalization, making sure it's not just considered a North American initiative or just a Walmart initiative. And the third was growth -- that we be conscious about our vision and mission and how we're going to achieve growth objectives.

Bonnie NixonWhen I think of growth it's not just "Let's get a lot more members." It's what should our model be for the future so that we ourselves are a sustainable organization? How do we support innovation and products. How do we create assurance out there, not just for consumers, but for the huge B-to-B space, providing the right toolsets for retailers and buyers.

Makower: You mentioned that "delivery" was one of your goals, but I'm not entirely sure what that means.

Nixon: We have to be really clear on what promises we are making, and that we're delivering on those promises. When I came into this, my observation was that there was a lot of excitement, a lot of anticipation about who we are from the moment it was announced. And initially people thought we were just an index, right? As time went on, there was a lot of discussion on what exactly are we and how should we evolve.

What became clear was that we needed to help navigate this very complex space that contains lifecycle assessments, lifecycle thinking, lifecycle approaches, but also look at other innovative approaches like Cradle to Cradle, biomimicry, natural capitalism, and whole systems design. How do you deal with the fact that, to date, there hasn't been consensus around things like biodiversity or social impacts or toxicity in materials?

Ultimately, delivery is about our longer-term vision, which is how we advance the science to drive a new generation of innovative products and supply networks that address environmental, social and economic imperatives. They're not mutually exclusive. We have to recognize that in order for companies to be actively engaged in many of the environmental and social things, that they actually have to be viable companies.

But they may also have to transform their business model. We've all been very focused on eco-efficiency -- rightfully so -- for quite some time. And we'll continue to be focused on eco-efficiency. But I think companies need to ask, "How do we redesign products? How do we take full responsibility for the impacts that we're having? How do we accurately assign value to the social and environmental benefits that we receive today for our planet?" I don't think to date that we've fully taken responsibility for the impacts of our production and consumption patterns.

What we're doing at the Consortium is designing a consensus-based accounting system that essentially enables companies to internalize the societal and the environmental externalities.

Makower: A lot of people still ask the question, "What does The Sustainability Consortium actually do?" What's the elevator pitch these days?

Nixon: We're a very diverse group of stakeholders, grounded in the science. We're collaborating to design and implement transparent, credible, reputable and scalable science-based measurement and reporting systems, for not just the users of consumer products, but also for the producers of consumer products.

Makower: That's a start. What if it's a long elevator ride?

Nixon: We're the glue helping to design and implement this system. And what's important about this system is that it be credible, firmly planted and grounded in academia. We have a lot of researchers on staff, and formal affiliations with more than 20 universities. That number's increasing as we establish ourselves in the European, Asian and Latin American communities. So, making sure that what we come out with is science-based.

And making sure that it's transparent. There have been a lot of conversations about whether we going to create all kinds of open-source IT tools. We're definitely going to be creating an IT infrastructure that houses all of this data and information, and we've been doing that over the past few months. But we're making sure that it's transparent and that it supports innovation, so that someone bringing a new product into the market can do LCA-type analysis in a matter of hours rather than months, and in a cost-effective way rather than costing hundreds of thousands of dollars.

So when I talk about delivery, it's making good on that mission of designing and implementing a credible, transparent and scalable science-based measurement and reporting system.

Makower: It sounds very tool-focused. Is that they way you'd describe it?

Nixon: No, it's more research focused -- how do we advance the science? And providing some infrastructure for housing that science and information is one of the jobs we have to do. Tools are a means to that end. The longer-term vision for the consortium is to advance the science to drive a new generation of innovation and products and supply networks that address these issues.

Makower: So you consider the Consortium a research organization?

Nixon: Yes. We consider ourselves an organization that is a hub for collaboration, a hub for bringing the various stakeholders together from academia, corporations, NGOs and government around advancing the science.

Makower: Tell me about your recent expansion into Europe.

Nixon: We've developed two formal partnership agreements with the University of Manchester in the U.K. and with Wageningen University in the Netherlands. Wageningen is a leading agricultural university with a strong commitment to sustainability. They have really strong relationships with agricultural producers and food processors and retailers. We've put Al Dijkhuizen, the president and CEO of the university, on our board.

In addition, the University of Manchester is an important partner for us. One of the reasons is Tesco: the Tesco foundation gave 25 million pounds to the University of Manchester to work on sustainability. We're very actively engaged in conversations with Tesco on how we can meet the needs of European-based retailers.

Makower: How will what you're doing -- the fruits of your labors -- benefit companies that aren't members of the Consortium?

Nixon: The goal here is that we're going to be very transparent. Keep in mind that we're sourcing this out of the university environment. We're working strongly with the foundations within the universities. We're working with lots of the companies that are involved in the consortium. They fall into four categories.

First, major retailers. We've got companies like Ahold, Kroger, Safeway, Marks & Spencer, Best Buy, and Walmart. We're talking to a lot of other retailers. They're very important and powerful leverage point for us. So that's the first set of companies.

The next set of companies are major brands and manufacturers. Ones that recognize the imperatives, feel the pressure, not just from their major customers but from NGOs, investors, and consumers.

Then we've got the major supply network companies. So, now you go deeper into the value chain or supply chain, like in the home and personal care sectors, where you've got the chemicals companies and the plastics companies. You have the large agricultural companies like Cargill and Tyson and Monsanto. Chemical companies like BASF and Bayer.

The fourth kind of company that's engaged in the Consortium are the service providers, and a lot of the creatives that are helping to create the standards, reporting methods, measurement tools, and the IT infrastructure. That's everything from ULE to Source 44 to PE Americas. These are entities that understand what it takes to make products more sustainable and are helping us to create the systems around it.

So, Joel, the answer really is that these folks are helping to create this. The outputs are going to be available or accessible to everyone.

Makower: What's coming up? What are we going to see over the next six to twelve months from the Consortium?

Nixon: A really important piece of what we're doing over the coming months is expanding. We're looking at our vision, a longer-term vision and mission, ten years out, asking "What is possible in making sure we engage the larger community in this dialogue?"

We'll be very focused on establishing ourselves in the European community. In addition to the Netherlands and the U.K., we've got university relationships now in Denmark, Germany and Switzerland. We'll be expanding to Asia. We're already in conversations with Korea, Taiwan, Singapore and China, as well as Australia and India. And we'll be expanding to Latin America; right now we're in conversations with groups in Mexico City and Brazil. An important part of this coming year is making ourselves a truly global organization.

We'll be helping to define the SMRS -- the sustainability measurement and reporting standards. We're doing level-one analysis on 50 products right now and by the end of the year we'll have 100 products. We started out with a very detailed look at about seven products and we'll be making that analysis public. We're making the process more scalable and creating some tools for the retail community and the buying community based on that science.

Now we have a knowledge base, a big IT system. That's a large part of what we're doing, too. We've purchased the rights to Earthster and we'll be housing a lot of our models and information in there. We're looking to determine what the infrastructure will be that will house all this science, all this data, to make it accessible to various audiences.

And we'll be looking at the long-term business model -- whether there is a revenue-generating scheme connected with some of the IT infrastructure or the availability of detailed analysis, customized analysis or scientific analysis that can be done around products.

Makower: It sounds ambitious.

Nixon: It is, but it's all very much underway. What's important, Joel, is that I'm a businessperson first and foremost. I spent 13 years in the HP environment. I owned my own environmental consultancy of 65 people for 17 years. So when I came here it was important to look at things like the financial plan, the operations plan, the HR plan, the marketing and communications plan. You know, assess the skills of the organization, assess the capabilities and skills of all the individuals. I've been doing some restructuring and revamping, as anyone would expect.

You asked me what we are delivering. You know, we're delivering the science. We're delivering the tools. We're delivering an international organization. We're delivering a strong collaborative network. We're delivering consensus around controversial standards. We're just delivering.