We want to thank McKinsey & Company, a global management consulting firm,
for providing the underlying analytical support for this report.
All products tell a story. The story used to be simple, but now people want much more information. The CEO of a large food and beverage company recently told me that, in the past, “a good product was one that tasted good and was safe.” But now, he says, it has to be “sourced, manufactured, and distributed responsibly.” Figuring out what that even means – and how to tell that story in an authentic way – is a big challenge. How can executive know, or prove, that they are successfully managing their products’ biggest environmental and social issues?
First, companies have to identify the largest impacts throughout the value chain. The work of the Sustainability Consortium has helped big brands and retailers understand that the biggest sustainability issues fall mostly outside their direct control – the real impacts are upstream with suppliers. Now, with this report, TSC helps answer a critical question: how much visibility do companies really have into their supply chains?
The answer is hardly academic and the stakes are high. Since the label “consumer goods” covers nearly everything we use in our daily lives, the sector has deep connections to all of the world’s greatest challenges, from climate change and water scarcity to food waste, child labor, and inequality. The scale of these challenges requires what I call a “big pivot”in how businesses (and society) operate. We need new strategies, including: focusing more on long-term value creation; setting bold science-based goals; asking “heretical” questions to drive new levels of innovation; making investment decisions differently to account for hard-to-measure intangible value; and collaborating radically in new ways with customers, governments, and even direct competitors.
SUSTAINABILITY STRATEGY ADVISER
OF THE BIG PIVOT
If we have any hope of making a shift of this magnitude, the consumer goods sector will need to play a key role. It must innovate and help everyone consume smarter and better. More specifically, the pivot for retailers and manufacturers will mean getting far greater visibility into supplier operations. Then, armed with better information and more transparency, they can collaborate with suppliers to create aggressive programs to reduce impacts and rethink production and consumption across value chains.
It’s a significant and exciting challenge.
But solving the world’s biggest problems does make for quite a story. Together, we will write and tell a tale about new modes of sourcing, production, and consumption—a story of a more circular economy and a fundamental decoupling of human development from the impacts that threaten our collective well-being.
With its extensive set of partners and data, TSC offers a unique view on how progress toward sustainable consumption is actually going. All companies and executives should heed these lessons so they can tell a new story—one that people are demanding to hear.
With its extensive set of partners and data, TSC offers a unique view on how progress toward sustainable consumption is actually going
CHIEF EXECUTIVE OFFICER
THE SUSTAINABILITY CONSORTIUM
Dear readers, valued TSC members, partners, and the “sustainability curious,”
I am pleased to bring you The Sustainability Consortium’s first-ever impact report.
This report marks a major milestone for The Consortium. It celebrates the work we’ve accomplished to date in creating a system that will serve as an important barometer for the entire Consumer Goods Industry globally. It also marks a significant transition for us as we turn our focus towards the incredible potential for impact we can have through the implementation of our work. Finally, it is a call to action for the key players along consumer goods supply chains to move forward.
We could not have accomplished this without our hundreds of members, our partners, and the individuals dedicated to sustainable consumer goods.
While I have worked in sustainability for most of my professional career, it is here as the chief executive of The Sustainability Consortium that I truly see an incredible and very tangible path towards accomplishing a more sustainable world. Much of this is through our research, our metrics, and our activation and implementation efforts around more sustainable consumer goods supply chains. I am proud to present the work of an organization dedicated not just to sustainability science, but also to the collaboration and collective action that will drive the entire industry forward.
Our goal with this report is a call for collective action to transform the measurement and tracking of product sustainability and, more importantly, to drive transformational change that will make a real difference for our planet. I hope you will join us.
Consumer goods bring countless benefits to society, dramatically improving lifestyles around the world. These benefits however come with an increasingly sizeable sustainability price tag—both for people and the planet. Global production and use of consumer goods accounts for more than 60 percent of all greenhouse gas emissions, 80 percent of water usage, and two-thirds of tropical forest loss globally. With 2.5 billion more people joining the consuming class in the next few decades, we must address the production, use, and disposal of consumer goods: a sustainable world requires sustainable production and consumption.
While progress has been made to make some consumer products more sustainable, the real imperative and opportunity for impact is to make all consumer products more sustainable. The Sustainability Consortium (TSC) was created in 2009 to transform the consumer goods industry by partnering with leading companies, NGOs, universities, and government organizations to define, develop, and deliver more sustainable products.
TSC uses a market-based approach to drive change. We believe that, if one retailer incentivizes more sustainable products, it can make a difference—but if multiple retailers send the same market signal, the world can change. TSC and its members have created a sustainability measurement and reporting system that now covers 80–90 percent of consumer goods. TSC uses science to identify the hotspots in different product categories’ life cycles, alongside stakeholder engagement and strategic partnership with other leading sustainability initiatives to develop key performance indicators in the form of a manufacturer survey. In 2015, Walmart, Sam’s Club, Kroger, and other retailers used these surveys to assess the state of sustainability of their products: this report summarizes those findings and provides recommendations towards action.