Examining Consumer Product Output with The Sustainability Consortium’s Dr. Kevin Dooley

July 7, 2014

sustainability-consortium.jpg JOHN SHEGERIAN: Welcome to another edition of Green is Good, and we’re so honored to have with us today Doctor Kevin Dooley. He’s the Chief Research Officer for the Sustainability Consortium. Welcome to Green is Good, Doctor Kevin Dooley. KEVIN DOOLEY: Thank you so much. JOHN SHEGERIAN: Well, it’s so nice to have you on today, Kevin, and before we get going and talking about the important work you’re doing at The Sustainability Consortium, can you please share with our listeners a little bit about your background and your journey leading up to what you’ve been doing over at The Sustainability Consortium? KEVIN DOOLEY: Sure. Well, my other sort of daytime job, so to say, is as a professor at the business school at Arizona State University and I go back a couple decades so I started off and was very lucky to get into both engineering studies and academia. At the same time, the quality movement was coming up and so that definitely excited me and so over the years, I worked on quality and innovation and worked on a few entrepreneurial ventures and for a variety of reasons, those came to a natural conclusion and I was looking around for what the next big thing to do is and a couple colleagues of mine asked me to participate on a paper about sustainable purchasing and I saw that there was not a lot of work done up to date and so I think I dedicated one of my summer reading lists a couple of years ago, maybe five or six years ago now, to really educating myself on what sustainability was and really, what the state of the world was around environmental and social issues in particular and really, that transformed my thinking and rather immediately led me to make a conclusion that I really wanted to dedicate the rest of my career towards this topic because it is not only very important but I think we have a sense of urgency to act and act broadly and largely. JOHN SHEGERIAN: I’m just so happy you’re on because this is such a critical issue and you’re just doing such great thought leadership work on this. For our listeners out there that want to follow along with Kevin’s discussion today, go to www.sustainabilityconsortium.org. I’m on the website right now. It’s beautiful. There’s tons of information. Please share with us a little bit about The Sustainability Consortium, about the transformational process that you’re implementing there in terms of how we interact with consumer products and how they interact with us. KEVIN DOOLEY: Great. Well, you are right in that our focus is around consumer products and consumer products offer us great both opportunity and risk. I think that we can all agree that consumer products give us a lot of the comfort and quality of living that we hope to achieve and indeed, when we look at the social aspects of sustainability, part of the goals that we have at a global scale is to bring up the living standards of people around the globe and consumer products can play an important role in that but we also know that consumption is going up as the middle class globally expands and that means that we need more energy to run factories. We need more water to manage farms and forests and we have more waste to take care of and so The Consortium’s focus is to help decision makers, whether they be product designers, supply chain managers, sustainability team officers, or even NGOs or governmental officials. To better understand what are the critical issues where we have the most challenge to improve the sustainability of consumer products and then what are the improvement opportunities that we can use to address those so to date, we’ve covered about 150 consumer product categories that represent about two thirds of the impacts related to consumer products on a global scale so just like many things, consumer products follow an 80-20 rule, where there’s a minority of consumer products that we buy and use all the time contribute to a majority of water and carbon impacts on a daily basis and so that’s where we’ve concentrated and we’ve also concentrated on the relationship between retail merchants and manufacturers and so we’ve developed some surveys that manufacturers can either use to assess how they’re doing in terms of product sustainability around particular categories like a computer, a laptop or a banana or a frozen convenience meal and then these surveys can also be used and are being used by the retailers to assess their brand manufacturers’ performances. JOHN SHEGERIAN: You know Kevin, over the years, as I’ve hosted this show and I’ve had the honor to host this show, I’ve learned from people like you and other great leaders that sustainability is a journey. It’s not really an end. How has The Sustainability Consortium, now that you’re evolving as an organization — what, you’re in your fifth year or so right now? KEVIN DOOLEY: Yeah. We just had our fifth birthday. JOHN SHEGERIAN: Right. So, how have you evolved and changed and how has the journey taken its different turns, some expected, some unexpected, over the last five or so years? KEVIN DOOLEY: Well, I think we’ve probably changed just like any startup organization changes over its first five years. We were talking yesterday as we were looking at a slide pretty close to about four and a half years ago and we’ve stayed pretty true to our vision but I think perhaps more interestingly, there’s been change in the outside world so when we started, a key part of our mission was to essentially put labels on products that would communicate how sustainable an individual product would be and I think that consumers have changed over that time period so I think consumers have gone to a point where maybe five years ago, a lot of consumers who were interested in green products would say, ‘We need more labels. We need more information to make better decisions and we need information that’s credible so we can trust our decisions.’ Today, I think many of those same consumers would say, ‘We want the manufacturers and the retailers to make the right decisions and I want every potential product I could buy from this brand or from this retailer to be green,’ and so I think that they don’t want the decision. They want all the products and services that are offered them to be more sustainable so that’s one, I think, very significant change in the marketplace and then also from the manufacturer and retailer said, interestingly, we see that the consumers are not the only drivers of the need for green products. In other words, while there continues to be a small but significant and growing market for green products on the consumer’s side, there’s so much awareness that there are many other drivers that lead to sustainability being a good business proposition so businesses have shown that significant cost can be reduced because sustainability efforts tend to focus on waste and value added and yet, do so in a way that’s kind of different from the lean manufacturing and quality movements of decades past. They also offer access to markets and so both at a nation level and a retail buyer level, there’s new regulations that are being put in and so business is seeing advantage to staying ahead of that curve and then finally, businesses are very sensitive to supply risk so I think smart businesses see that for example, climate change is bringing change to where particular crops are grown and that’s going to cause adaptation to our supply chains to keep up with both dwindling supplies and movement of where supplies are available. JOHN SHEGERIAN: So interesting. You know, you mentioned a little while ago the toolkits. Can you explain to our listeners how the toolkits work, specifically for the retailers, let’s just say, for example? KEVIN DOOLEY: Sure, so the toolkits, we kind of look at maybe two sets of users in a retail organization. There’s the sustainability office and then most retail organizations, probably most organizations more broadly. The sustainability office is typically relatively small. I only have maybe a half dozen or a dozen people. Most companies want to distribute the responsibilities for sustainability throughout the organization and I think that’s healthy but there’s often some type of centralized team that offers a high degree of expertise and so we offer essentially knowledge about what makes a difference in different product categories and then how to address improving on those issues for that sustainability office so they can take that into their strategic planning and really say, ‘Okay, from our company vision, we know water is a critical resource that from a risk standpoint, if we have issues with access to water, that’s going to be problematic,’ and so they could use our knowledge base essentially to learn what product categories water criticality might be an issue or even, indeed, what type of regions geographically water criticality could be an issue, let’s say for crop growth, and then at a more detailed level, we have the merchants, the buyers, who go out and are responsible for purchasing particular products in different categories and they also are responsible for interacting with the manufacturers on an ongoing basis and where possible, helping them improve and so we’ve developed these surveys, these key performance indicators embedded in a survey, that then the merchants can send to the manufacturers to get a sense of where that manufacturer sits and then over time, see how that manufacturer progresses on particular critical issues and so in a way, these surveys serve as both a way to measure progress but also a way to start conversations and really, I think many people are surprised when they hear that perhaps conversations are more important in supply chain management than contracts are. It is true that a lot of supply chain management is done at kind of an arm’s length relationship but for example, retailers, they know who their critical suppliers are and they have very close and ongoing relationships with these suppliers and so anything that you can do to help focus those conversations and focus on where the best opportunity is, if you invest X amount of improvement effort, here’s where you’re going to get the biggest gain in terms of reducing environmental impact or improving the social condition. JOHN SHEGERIAN: You know, for our listeners who just joined us, we’re honored to have Doctor Kevin Dooley. He’s the Chief Research Officer from The Sustainability Consortium. To learn more about all the great work The Sustainability Consortium is doing, please go to www.sustainabilityconsortium.org. Kevin, tell us a success story. You get to work with a lot of great brands and a lot of great people. Give us a success story from a member of your organizations who has integrated Sustainability Consortium product toolkits into their operations. KEVIN DOOLEY: Sure, so one example that actually got written up by Harvard Business Review was that in our computer laptop category, we had identified that the energy consumption during the use phase of the consumer was what we call a hot spot. A very significant portion of all of the greenhouse gases and energy consumption needed to make a computer, all the way from the mine through the end of life, is because of the electricity that a consumer uses and one of the improvement opportunities that we surfaced was that many computers have kind of eco-friendly settings, that you can go into the operating system and set your battery on a power saving mode and maybe the screen goes dim after a certain amount of time or the computer goes to sleep after a shorter amount of time, etcetera, and these can make a great impact on reducing the energy consumption of the laptop. However, most users are unaware of this feature. Even if they are, they don’t necessarily know how to go about changing it and so a merchant at one of our large retailers, Walmart specifically, had the idea of basically asking the computer manufacturers to ship their laptops with the eco-efficiency mode already turned on kind of as the default mode and I think this happened during the last Christmas buying season so all the laptops that were sold by Walmart were shipped to consumers in a more eco-friendly mode and I think that ended up saving, over the lifetime of the computer, several hundred thousand tons of CO2 that would have been generated otherwise by electricity consumption. JOHN SHEGERIAN: Kevin, we’re down to the last three or so minutes and I want to just ask a couple more questions about your growth. Now that you’re evolving, can you share a little bit about you just opened an office in China? Explain why China and not other countries and what kind of work is taking place there in terms of the appropriate evolution of your great organization. KEVIN DOOLEY: Sure. Well, China is important globally, both as a nation of consumption and a nation of supply and so for example, if we look at both North America and Europe in terms of where products come from, many of our durable products are manufactured in China and so we have opened a China office in part to expand our research team because we would like to get researchers who are on the ground in China working with Chinese industry to understand better the particular improvement opportunities that exist there. We’re also doing capacity development in terms of training and really, we’re seeking out a business model so we know that our opportunity to contribute value is going to be different in different countries and so we’re letting some of the entrepreneurial spirit work its way and figure out what is the best way for us to add value to that particular economy and culture. JOHN SHEGERIAN: And, what city did you open up in there? KEVIN DOOLEY: Nanjing; so we’re partners with Nanjing University. JOHN SHEGERIAN: Oh, wonderful. We’re down to the last two minutes or so and we love to give solutions on Green is Good, Kevin. Talk a little bit about what opportunities do organizations that are listening to the show have to interact with The Sustainability Consortium and how do they begin the process? KEVIN DOOLEY: Well, we are a member-based organization, so people can go to the website that you’ve provided and look at our membership information and we’re happy to engage conversations about membership and whatnot and we’re also happy to engage in other ideas that people might have about partnership so a lot of the value that we believe that we add to our members and participants is through our networking opportunities and we’re still in our own entrepreneurial mode so we’re always interested in hearing ideas that people might have about interesting ways that we can partner. JOHN SHEGERIAN: And, talking about that, talk a little bit about the crystal ball, the future. In the last minute or so, Kevin, where is The Sustainability Consortium going in the next five years? KEVIN DOOLEY: Well, we’re going to continue our products and services, especially around product sustainability and measurement and reporting and I think that also, we’ll put a lot of effort into helping companies implement this work and really drive towards impact. I think on the sustainability scene, we see companies already having increased interest in resilience and adaptation, in particular, climate change adaptation, a lot of interest in the circular economy, which is something I think you know a lot about, and also interest in how products become more and more like services and what impact that has on product sustainability so there are a lot of changes that we have now coming up to 2020 and I expect TSE will be continuing to ride that front wave. JOHN SHEGERIAN: Well, we wish you continued success and luck and we want you to come back on Green is Good to talk a little bit about the more and great things you are accomplishing at The Sustainability Consortium. For our listeners out there who want to join or just interact with The Sustainability Consortium, please go to www.sustainabilityconsortium.org. Thank you, Kevin, for being an inspiring sustainability leader. You are truly living proof that green is good.