The Sustainability Insight System (THESIS)

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The Sustainability Insight System (THESIS)

Key Objective

Creating clear and strong demand signals for retailers, manufacturers, and suppliers to benchmark, quantify, and take action on critical sustainability issues within their consumer product supply chains.

Challenge Addressed

The key challenge addressed is exploring the opportunities for strengthening the demand signals for  retailers, manufacturers, and suppliers that motivates: 

  • manufacturers and suppliers to measure, report and improve the sustainability performance of their products without an explicit request from their buyers. 
  • retailers  to set goals, communicate these goals to their suppliers, and awarding recognition to leading manufacturers and suppliers. 

Type of Stakeholders

Retailers, procurement (goods not for resale), and suppliers who are using our THESIS system to create more transparent consumer goods supply chains.  

Over 2,000 suppliers have used THESIS to assess their global supply chains and share data with their buyers.  

Buyers have included 19 different retailers in the US, UK, Chile Netherlands, and Australia across the years, with 14 currently active retailers.  

TSC members (100+) and partners include CPGs, NGOs, Universities, Retailers, Companies, SMEs, Consultants, Certification Program Owners, civil society organizations, and governmental agencies each bringing valuable perspectives and expertise.  

Case Study Acronym:THESIS
Long Title of the Case Study:

THESIS, or The Sustainability Insight System developed by TSC, a Global Sustainability Performance Assessment System and Decision Making Tool for Consumer Packaged Goods 

Case Study Main Contact:

WUR
Koen Boone, Emil Georgiev

Countries involved and main place of the Case Study:Global
Part of the Food System addressed:

Cradle to Grave of ingredient and finished goods: 

  • Raw material extraction
  • Agriculture, aquaculture and livestock
  • Raw material processing
  • Manufacturing and assembly
  • Packaging
  • Distribution
  • Retail
  • Use
  • End-of-life and Disposal 

Case Study Summary

This case study focuses on The Sustainability Insight System (THESIS), a science-based solution developed by The Sustainability Consortium (TSC). TSC’s theory of change is that the buyer-supplier relationship can create sustainable consumer goods. Retailers are the main drivers of this change and send their demand signal to their suppliers through the use of THESIS, which provides standardized Key performance Indicators (KPIs) to monitor manufacturers and suppliers. THESIS helps retailers differentiate their manufacturers and suppliers in terms of sustainability and ensures their supply chain partners are aligned with their sustainability goals. These KPIs can be used to benchmark supplier performance and promote collaboration stakeholders. Although thousands of suppliers have been sharing data via THESIS for years, there is often a lack of positive incentives for them to take reporting seriously or to improve their performance. Similarly, some retailers face a lack of incentives and capacity to follow up on suppliers’ reporting.  

The goal of this case study is to support the future acceleration and evolution of THESIS by strengthening the demand signals for retailers, manufacturers, and suppliers who are using THESIS to assess sustainability issues within their consumer product supply chains.

The case study aims to achieve the following objectives: 

  1. Facilitate clear and strong demand signal for manufacturers and suppliers to measure, report, and improve the sustainability performance of their products (without an explicit request from their buyers).
  2. Facilitate clear and strong demand signal to and from retailers to set goals on critical sustainability issues within their consumer product supply chains, communicate these goals to their supply chain partners, benchmark them, and award recognition to their leading manufacturers and suppliers.

To achieve these objectives, the case study will explore the efficacy of the following mechanisms: 

  1. Enhance the science behind THESIS by updating product category environmental hotspots with quantitative life cycle assessment (LCA) data sources such as LCAs databases and peer-reviewed LCAs. The outcome will be quantitative hotspots by life cycle stage for defined product category scopes. 
  2. Conduct landscape analysis of verifiable product, supply chain, and supplier attributes that address the hotspots identified in point 1 above. The outcome will be Key Performance Indicators (KPIs) designed to collect supplier-reported and verifiable supply chain or product category attributes that address the sustainability hotspots in their supply chain (vetted sustainability performance scores for product categories based on LCA data and information provided by suppliers). 
  3. Design KPIs to collect company-specific information from suppliers, including their sustainability goals, strategies, communication methods with supply chain partners, and progress achieved. The outcome will be KPIs designed to collect supplier reported company level attributes to enhance data analytics out of THESIS and drive alignment between buyer-supplier sustainability goals.
  4. Explore data verification in THESIS combining options 1), 2) and 3). This will enable LCAs-based quantified product category environmental hotspots to be used as a benchmark for the evaluation of the supplier reported data (e.g., KPI responses) in THESIS. The harmonized scoring method simplifies reporting of product category averages and helps retailers strategize and prioritize sustainability goals. Additionally, the addition of a KPI or question that asks specific questions to suppliers about data validation (e.g., which KPI answer is validated and how) will be explored.
  5. Explore mechanisms of recognition and reward for product supply chain partners, such as publicly available sustainability performance scores and the award of badges as communication tools between retailers, suppliers, and consumers. External communication of these incentives will improve reputation and encourage reporting and improvement.

By implementing these mechanisms, the case study aims to improve sustainability performance in the consumer product supply chain, while also providing recognition and rewards to leading manufacturers and suppliers. 

DATA FLOW

The figure below gives an overview of data flow between the major stakeholders in THESIS.

Self-assessment  

  • Via THESIS suppliers (e.g., final goods manufacturers) self-assess and share product category sustainability performance (KPIs) to their buyers (e.g., retailers). 

On request 

  • Buyers can encourage suppliers to complete and share specific product category KPIs. 

Data (KPIs) 

  • KPIs are metrics/questions that assess suppliers’ progress on product sustainability performance. 
  • KPIs cover global production of a product and are not specific to any retailer, region or buyer. 
  • KPIs can be broken down into category level, facility level and supply chain level KPIs
  • KPIs consist of:
  • Up to 14-15 questions
  • Each KPI has one main question, with 2-6 sub-questions
  • Guidance on how to answer the KPI and where to possibly find data

Data collection 

  • Suppliers may collect data addressed by KPIs via:
  • Manual entry
  • Requesting their suppliers (e.g., farmers) to collect and communicate data.
  • Using APIs to Tier 2 management software
  • Metrics calculators

Motivation and key expected Outcome

Motivation

TSC’s theory of change is that the power of the buyer-supplier relationship can create more sustainable consumer goods. Currently, retailers play a critical role as the main drivers of this change, and the adoption of THESIS can facilitate and accelerate this transformation. The primary objective of this case study is to investigate how THESIS can enhance demand signals for buyers and suppliers and explore new theories of change which include supplier focused value, independent of retailers. This objective is driven by two key motivations: 

  • Firstly, THESIS encourages manufacturers and suppliers to independently measure, report, and enhance the sustainability performance of their products, without the need for explicit requests from their buyers.
  • Secondly, THESIS incentivizes retailers and buyers to establish sustainability goals, communicate these objectives to their suppliers, and acknowledge leading manufacturers and suppliers who prioritize sustainability.

THESIS promotes transparency, traceability, and performance by providing standardized KPIs that enable suppliers and buyers to communicate and track sustainability performance over time. With these KPIs, suppliers and buyers can gain valuable insights into the sustainability of the products they sell or purchase. Additionally, THESIS provides access to external tools such as certifications, standards, and other resources that can help improve sustainability performance. 

Suppliers may face challenges in collecting and sharing sustainability data for their products, including the lack of necessary systems or tools, leading to low motivation and high administrative burden. Calculating product category data can be complex due to multiple factors such as SKUs, ingredients, production sites, tiers of suppliers, and global supply chains, as well as the need to combine primary and secondary data from various external calculation tools and standards to calculate a single indicator. Thousands of suppliers have been reporting via THESIS for several years now, but there are too few positive incentives to take reporting seriously or to improve the scores. Even if the data exists, buyers may not incentivize their suppliers to share their sustainability performance data due to low commitments or no sustainability goals. Consequently, there is little motivation for suppliers to gather, analyse, and share sustainability data with their buyers. 

Despite sustainability discussions taking place in the buying room, TSC’s previous research has shown that the lack of data system connectivity in food supply chains presents a major obstacle to collecting and reporting sustainability information. 

TSC does not currently conduct audits on assessment results. Buyers are seeking verifiable data to support product claims.  

Expected outcome

The following outcomes are expected: 

  • Enhanced, quantified and more reliable environmental hotspots for product categories (based on Life Cycle Assessments)
  • Vetted sustainability performance scores for product categories(based on LCA data and information provided by suppliers/manufacturers)
  • Data verification for product categories
  • Increased sustainability focus and knowledge in product supply chains 
  • Improved recognition and reward for sustainable practices among supply chain partners.

Main Partners of the Case Study

WUR

Contact: Koen Boone
email:

Contact: Emil Georgiev
email:

Other Stakeholders involved in the Case Study realisation, but not direct project partners.

Addressing Food Value Chain

THESIS includes over 400 Performance Assessments including 130+ consumer goods categories covering over 90% of all consumer products produced around the world. (e.g., food, electronics, home and personal care products). Food categories covered by THESIS: 45 food product categories including Seafood, Livestock, Dairy, Alcoholic and Non-alcoholic Beverages, Nuts, Soy, Cocoa, Coffee, Tea, Sugar, Fresh and Processed Produce, Grains and Grain-based Foods, Vegetable Oils, Vitamins and Supplements, Pet Food, and Processed Foods such as Ice Cream, Chocolate, Convenience Meal, Non-dairy Products.

THESIS addresses social and environmental hotspots in the following parts of the food supply chains:

– Raw material extraction and processing for food application

– Agriculture/aquaculture/fishery and livestock production and suppliers

– Food processing/manufacturing and suppliers – from ingredients production and processing to final products manufacturing and assembly

– Logistics from storage and transportation of ingredients to storage and transportation of ready-to-market products

– Waste management – social and environmental hotspots from landfill, composting, incineration to packaging, recycling and reuse/refurbishment – Circularity aspects

– THESIS has regenerative agriculture on-farm KPIs as well food loss and waste KPIs at food processing, manufacturing and distribution stage.

Cross collaboration
with other Projects or Initiatives

TSC, members and partners are involved daily in multiple projects that are leading innovations in the sustainability industry. Some of these projects are led by TSC and others by TSC members. Here is a selection of some of TSC more active projects and initiatives.

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