Signing Off

Thank you to my loyal fans and followers. I've decided to discontinue this blog since we're contributing to so many other communication channels it just seems redundant and overly repetitive. To keep up with me and my writing, please search for me on the Environmental Leader website (www.environmentalleader.com). You can also follow us on Twitter @Carbonostics. If you'd like to reach me directly, my email is sara.pax@bluehorseassociates.com.

Thank you for reading and supporting.

The Future is Bright

I cannot help but be optimistic - despite being bombarded with tons of evidence to the contrary. Last week's article in Time Magazine about how food demand is outstripping supply for the first time ever, and how food production is already extremely stressed by the effects of climate change, and how solutions like GMO are going to save food supplies, could be construed as the most depressing and negative of outlooks. And yet, I still feel optimistic.

A number of long-shot things must align in order for my optimistic predictions to come true --

(1) There must be an acknowledgement by politicians - especially American politicians - that climate change is real and is already effecting food production. And therefore climate change must be built into the forecasts and needs of food production.

(2) Farm subsidies must be re-aligned. Ironically, because of rising demand and tightening supply, some farmers are members of the one economic sector that is making money. Lots of money. But is it the right kind of money? Local, organic producers are still struggling. Small holders and substitence farming are still rare and economically difficult. Farm subsidies for large producers - especially of crops like corn and soy - must be capped (and by the way, so must oil subsidies). Why should the public support farmers (or oil companies) when their profits are supporting them very nicely, thank you very much!

(3) Food prices must be realigned with real value and real costs. This one is a biggie, I know. Why is it that local, organic food prices are so much higher than the big supermarkets charge. I understand about economies of scale, but they really go too far. Supermarket profit margins are so ridiculously tight anyway that only the largest and most powerful of producers and marketers can get on the shelves of the big chains. And this has to change. A consumer must experience some tough love in order for this point to be realized and help realign food production and distribution. No one wants to do this - not the manufacturers, not the retailers, and certainly not the politicians, but it's going to have to come sooner or later. There are signs of this already taking effect in the Chocolate industry. The amount of "gourmet" chocolate now on the market and competing (at much higher prices) with the mainstream products, belies the fact that cocoa production is currently one of the first industries that is having to face reality. Social and environmental factors are conspiring to force demand for cocoa to greatly outstrip supply, and there is no let up in sight. Consumers are going to have to face the harsh reality that what they're currently paying for food is not the real cost of food, and that they're going to have to change their purchasing habits to accomodate the new reality. The upside of this is that as the value of food increases in the eye of the consumer, food waste will likely go down significantly and social problems such as obesity could very well be positively affected too.

(4) Food companies are going to have to 'fess up. They're going to have to change their working relationships with their suppliers and eventually stop all the s**t from rolling downhill. This is also going to be painful, but actually some companies have started to take baby steps in this direction. There are decades of animosity and piles of s**t to overcome, but economic realities have necessitated some companies to start building bridges and collaborations that have a lot of longterm potential to help the situation.

(5) Global infrastructure is going to have to become a priority if food is to get to every corner of the world where it is needed. Today, the western world wastes tons and tons of food, during production, during transport, in the home, and at restaurants. Alone, that waste could feed hundreds of thousands in areas where food shortages are become more extreme. By forcing the value of food higher in the western world, consumption and waste will naturally decrease, thereby leaving more to be distributed elsewhere. Ironically, the manufacturers and retailers could do very well out of this. If they think ahead, build their global distribution infrastructure correctly, anticipate long term need in non-traditional markets, they could do very well indeed.

It will take a little vision, and a lot of optimism, but it is all possible. Perhaps not in my lifetime, but I'm hopeful that in my daughter's lifetime, food will have a very different place on the table.

What does Corporate Responsibility really mean? And why?

http://www.environmentalleader.com/2011/05/23/what-does-corporate-responsibility-really-mean/

What's in a Title

After dropping my daughter off at school the other morning, I got on my regular bus to come to the office. As it happened, another mum was on the bus too and we started talking about the normal things – kids, school activities, the weather, holidays, etc. Then she asked me what I did. I spewed out my usual 30-second pitch and she raised her eyebrows and said "Oh then, you must be really busy". 

I smiled and took a couple of seconds to frame my response. My answer came out like this - "Well, yes, we are really busy talking to lots of companies and there is a lot of interest in the industry. However, there is also a lot of internal debate about which areas of the business are going to actually commit the resources to do the work and therefore it can be a little frustrating." 

As I reflect on the way this came out of my mouth, I realize that this is where the next level of evolution in LCA is going to come from. The scientific work has been done (more or less - there are still standards to publish and studies to read, but most everyone is roughly on the same page), the tools have been created (at last count, we came up with half a dozen products that are now firmly in the business of producing LCAs), and the value has been proven (read any CSR report or Environmental Leader article to see the latest anecdote).

However, there is still an uncertainty - and perhaps even a real reluctance to decide - who should be responsible for measuring and reducing environmental impact. We speak to directors of Risk & Compliance, EHS, Marketing & Communications, Brands, Innovation, R&D, Environment, CEOs, COOs, and others, and there is no way to confidently predict who among these wieldy and impressive titles has the actual responsibility of running LCAs and reducing a company's environmental impact.

And it's ironic really, because there is really no doubt that measuring and reducing environmental impact saves money. Potentially, lots of money. And so shouldn't all these people be clamouring for the role of saving the company money. Maybe someday soon, but certainly not yet.

The Magic of Lifecycle Analysis

http://www.environmentalleader.com/2011/04/12/lifecycle-analysis-moving-from-black-box-to-transparency/

EU and France - hand-in-hand?

Disappointment in the slow-down in French momentum in environmental labeling was palpable last summer. The French legislature struck down attempts to force consumer goods companies to label all their products largely because the agencies in charge of deciding the tactical application of the mandate were so far behind their own milestones and deadlines. The process is so "democratic" that each meeting and each presentation often ends with a loud sigh with very little progress or resolutions being found.

The biggest obstacles are reliable data and an agreed-upon methodology. Should food companies be required to measure their water consumption, for example? Well, in principle it's a nice idea but in reality it's not easy to do and it's not even that reliable as a measure of environmental impact. Carbon is the easy one, or is it? And what about toxicity, eutrophication, land-use change, sequestration, and other more sophisticated and scientific measures that could have enormous impacts on how a product is measured.

Well, it turns out that the EU just couldn't wait any longer. The French are currently allowing 168 companies (or consortiums of companies) to "experiment" with measurement and labeling with very little guidance on how or what to measure. Meanwhile, the EU - who up until recently was saying that they were going to wait until France decided on a framework and then build on that - have decided to go ahead with their own experimentation. And while at first glance that might sound counterintuitive and even more confusing, in reading the EU's guidelines and stated goals, seems like it might actually result in a more concrete outcome that France's efforts in the same area.

The EU has restricted their project to only 10 participants. They also have stated their guidelines for measurement (the ILCD handbook and the JRC methodology), and whether we agree or not with their methodologies at least there is one to follow. Their results are due by the end of 2011 and even though France's project is due to be finished a few months earlier, my prediction is that the EU will actually lead France in the final accounting of this work, rather than the other way around.

LCA Practitioners Survey

We've just completed a survey of LCA Practitioners worldwide. Here is a sampling of some of the most interesting results.

The largest majority of LCA practitioners are currently focused on process and product level LCA:

Surprisingly, not everyone is being asked to follow an LCA standard:

Among our survey participants, food & beverage and agriculture stand out as the leading industries among these LCA practitioners:

Carbon is still the only international standard and requirement for LCA measurement:

More than 1/3 of LCA Practitioners are still relying on Excel for their analyses:

Primary data gathering is still the biggest headache for LCA practitioners:

LCAs are being used for a wide range of needs, with R&D and innovation leading:

The Myth of Eco-labels

The debate about consumer product labeling is full of very definite and passionate views about the value and reasons for and against labeling. The obstacles to labeling are not really up for debate – they are undisputedly complicated and challenging, but not insurmountable. In fact, there is little doubt that in 10 years labels describing some sort of lifecycle environmental impact of a chocolate bar, a mop, a bottle of shampoo, a pair of shoes, and all other consumer products will be as commonplace as nutritional labels are now. And just as ignored.

It is a very hard argument to make – that consumers care. Call me cynical, but can anyone really argue that labels influence a majority of consumer purchases. Statistically speaking, there are usually less than 10% of consumers – of which I am one – who are influenced by labels. Research shows that a typical customer spends 2-3 seconds looking at the labels. And, if labels really matter, how do you explain that McDonalds is still flourishing or that Fruit Loops regularly outsells All Bran. There is very little doubt that the only label that consumers consistently read and care about is the price label. And perhaps together with location on the store shelf, the newest sexy slogan, and the ability to appeal to kids, price is the bottom line influencer of most mainstream food purchasing decisions. 

So, when the next conference on “sustainability communication” is announced, it’s important to understand that this is really the advertising and design industries trying to get in on the act. And be prepared for all the different labeling companies to be there in force talking about your brand’s green credentials and the consumer demand for labeling. Unfortunately, the research about changes in consumer behavior negates a lot of these arguments and make them ring consistently hollow.

Couple that with the fact that labeling requires very precise measurement which can be explained and defended (if challenged) and which is extremely expensive, labor intensive, and time consuming, the ROI of labeling gets smaller and smaller. And, the final nail in the coffin comes when you start to look at the all the label choices out there. There are dozens, if not tens of dozens of them out there clamoring for the consumer’s attention, your attention, your endorsement, and your money. Some from governments, some from NGOs, some more credible than others, some so obscure that they could may even prove to be of negative value.

So, which is best for your brand and your business? None of them.

This might be a surprising argument coming from a sustainability metrics advocate and someone who passionately believes in the value of lifecycle measurement. But if you follow the logic beyond what the designers and labeling companies are advocating, you’ll find that beyond the green credentials and PR ROI there is an incredibly valuable activity that is spurred by the ultimate goal of labeling. 

Call it “beginner’s eyes” or “big picture” or even “lifecycle”. It is the activity of seeing the entire lifecycle of any product from a completely new point of view. One that illuminates waste and flaws in the process; one that inevitably leads to an examination of different business practices; and one that requires the cooperation and communication throughout each of the silos of the business - from logistics to operations to procurement to brand management to marketing to R&D and back.

I am a strong advocate of government mandates of labeling for consumer products, but not because labels have an influence on consumer behavior. Everywhere you turn you’ll find anecdotes about companies who, in the process of measuring their lifecycle (for whatever reason), discovered surprising and sometimes enormous cost and waste flaws in their operations. Wasted plastic in a standard operating procedure that was designed 8 years ago when that particular technology was first introduced. A location change that could revolutionize the way your raw materials are delivered and your final products are shipped. A new recipe that capitalizes on the success of the old recipe but reduces sodium, beef, and consumer energy use. So many opportunities to make small, often not expensive, adjustments to standard operating practices that ultimately have a lasting and positive effect on the environmental impacts of the business (not to mention profitability).

So, yeah! to countries who are instituting voluntary labeling (because it’s likely a precursor to mandatory labeling), and yeah! to retailers who are asking their suppliers to report on different aspects of their energy use and packaging materials, and yeah! to the consumers and consumer advocates who are pushing for labeling. 

But let’s be clear – the real advantage to labeling is the not the label or the methodology or the metrics behind the label. The most tangible and sustainable value to the business of labeling products is the journey of discovery that must to be travelled from farm to fork, from cradle to grave, from R&D to procurement to logistics to operations to marketing to purchasing and then to consumption. 

What about Waternostics?

We have an ongoing debate at the office - when are we going to start capturing and analyzing other indicators in Carbonostics (or a sister tool) like biodiversity, toxicity, and most top-of-mind water. And not just in the office - we get calls from journalists, emails from prospects, and requests for conference presentations asking the same thing.

The short answer is that it's just too early to say. We could, very easily, just add an empty box for users to enter the water consumption in litres for each material in a recipe and just total it up for the report. But really, that's not the point of what we deliver with Carbonostics, and it defeats the purpose of being smarter than an Excel spreadsheet.

Carbonostics is smarter for two key reasons - (1) it contains a large reference database (the largest, as far as we can tell) of the carbon emissions over 1500 different ingredients, materials and processes that go into a food product's lifecycle; and (2) it has built-in intelligence so you don't have to be a fully-trained LCA specialist (or even come close to that) to analyze the lifecycle of your product.

But water works so differently. The carbon emissions from a cow who primarily eats commercial feed in the south of France is fairly similar to a cow who primarily eats commercial feed in Texas. However, the grains that go into that feed have vastly different water consumption depending on where they were grown - was it at the top of the hill or the bottom of the hill, was it a wet year or a dry year, was irrigation used, what was the source of the irrigation, etc etc etc.

So, while it's tempting to just put an empty box on the screen to capture their water consumption if they happen to know it, we're going to hold off until the international debate results in some measurable and repeatable consensus that we can build on to create practical and affordable solutions for all food companies.

Thank you for your patience.

2011: the year PLCA goes mainstream

I hate predictions and am the first to admit that there's not much point in them. Either you end up with egg on your face because you predicted something that didn't even come close to being true. Or you hit on something (either by luck or by judgement) that does come true and you can rest on your laurels - at least for a short time.

However, it does seem to me that momentum in the product lifecycle measurement arena is picking up speed. Many companies have already tackled their energy footprint, their company wide carbon measurement, and some have even gone as far as installing carbon accounting software (which is springing up in every sector).

So it's not a very off-the-wall idea to think that these activities will continue in 2011 and the next logical step is product level lifecycle measurement. There are a variety of reasons for a company to go all the way to product level: 1) they have to report to their client or their government, (2) they want to communicate to the consumer (although frankly we should just call this what it really is - a PR effort), (3) they have or want to participate in academic research either for kudos or for a fuller understanding of their impacts, (4) they recognize that the cost benefits they've realized at the macro level will continue at the micro level - and it all adds up.

So, I'll meet you back here in January 2012 and we'll see if this predication had any legs. In the meantime, have a happy and healthy New Year and let's hope (for the planet's sake) that sustainability - as a business practice - continues to gain even more traction in the year ahead. Onward and upward!