Competitors Target and Walmart set out to do together what they couldn’t do as easily alone: shift the personal care and beauty products industries to safer ingredients and a new vision of sustainable products
According to a recent report by London-based C&E Advisory, enhancing reputation continues to be the top reason companies form NGO partnerships. What is shifting, though, is that companies are moving to strategic relationships in their partnering. That means looking beyond the business case on internal sustainability actions, and even beyond actions in the supply chain, towards shifting whole sectors’ sustainability.
A three-way partnership between US retailing giants Target and Walmart and the UK-based non-profit group Forum for the Future is a good example of both the advantages and the pitfalls of entering this type of strategic relationship.
Target and Walmart are fierce competitors in the grocery sector. Yet the companies came together, combining their clout to help change the personal care and beauty products industry. By partnering with Forum for the Future, well known for its systemic approach to big sustainability issues, the partners hoped to more swiftly break down the formidable barriers to making personal care products more sustainable.
Though it isn’t common for two powerful corporate competitors to work side by side to foster sustainable change, Target and Walmart did have previous experience working together, as members in the Alliance for Bangladesh Worker Safety, and as part of the Sustainable Apparel Coalition.
They also have powerful motivators to put more sustainable personal care and cleaning products on their shelves: the new trend is for consumers to seek out “clean label” goods – products that convey transparency, safety and ethical sourcing with a minimum of confusing or scary-sounding chemicals or ingredients. And, while US legislation on chemicals in personal care and household products has long lagged European efforts, change can happen quickly: the phase-out of microbeads in recent legislation signed by US president Barack Obama, is a prominent example of how fast things can happen.
Before partnering with the Forum on what is referred to as BPB (Beauty Products and Personal Care) Target and Walmart were already individually working tangentially on the issues: Walmart has had a Sustainable Chemistry Policy since 2006 and a list of 10 priority chemicals to phase out; Target has a more recent Sustainable Product Standard (from 2013). And Target and Walmart worked together on a project of the Green Chemistry and Commerce Council (GC3).
But by 2012 it was becoming clearer that there was a need for harmonisation of sustainability efforts in the sector, because individual companies may have reached the limits of what they could do on their own.
“Ten years ago most companies were saying ‘Why should we care?’ when it comes to green chemicals, while now it’s not ‘Why?’ it’s ‘How?’,” says Monica Becker, co-director and project lead of the Green Chemistry and Commerce Council (GC3) based in Lowell, Massachusetts. “Yet one thing I think many consumers don’t understand – it’s relatively easy to ban a chemical; what is much more challenging is to develop a safer substitute.”
Thus, a first era of change, in which manufacturers of BPC products might label their products as “doesn’t contain” a certain chemical or ingredient, is over. Smaller personal care product and cleaning product companies – in the US the Method and Honest brands are two examples – have found market success with more sustainable product formulations, which ups the ante for a sustainable standard.
Stephanie Draper, deputy chief director at Forum for the Future, said her organisation had been working for some time with Target. As part of Forum’s overarching goal to get companies it works with to think beyond their own boundaries toward sustainable systems change, the two came together with Walmart.
“We were having the conversation with Target,” Draper says. “They were having a conversation with Walmart. Both of them were having customers ask about product safety, and wanting to feel confidence around the chemicals in the products.”
The three partners solidified their bond by planning the Beauty and Personal Care Products Sustainability Summit, in Chicago in 2014. Walmart and Target realised the advantages of working together. “You not only share the risks and costs but also share the opportunities,” Draper says.
The power of the partnership and the strength of Target and Walmart’s influence helped get representatives from the entire personal care products supply chain to the BPC Summit – 50 groups from Aveda to Dow Chemical to Johnson & Johnson attended. Forum for the Future was careful to keep the focus on “pre-competitive” areas of commonality among the different players. The impact of chemicals on health and the environment, and transparency emerged as the issues of greatest concern for the 50 attending companies and consumer groups.
From the map to movement
What the summit did not achieve, however, was immediate actions. Forum for the Future’s Draper says that is in part by design. “People tend to want to rush to, ‘Let’s do this. Let’s go for immediate results.’ For the business world it is our natural training – we tend to want to know quickly ‘What’s the plan?’ and ‘What are we going to do?’”
In sustainability problem solving, though, that approach can lead to the same mistakes being made over and over again, Draper says. It’s important, she says, to spend enough time up front to truly get to the nub of a problem. Forum worked for many months to create both a “systems change map” for the personal care industry (see illustration), and to analyse and synthesise all the data the BPC Summit – with its myriad across-the-value-chain conversations – had generated.
What it boiled down to, and what Forum for the Future itself highlighted in its “think piece” released in October 2015, is that the BPC sector is complex, highly competitive, and with a high cost associated with getting greener ingredients for products to market. In addition, there is a lack of agreement on what constitutes a sustainable beauty or personal care product.
The Forum’s think piece zeroed in on three areas for a first phase of action: streamlining information between the different players (for example, by sharing ingredients information); developing common criteria for evaluating product sustainability; and facilitating research and other levers to get more sustainable ingredients to market, specifically greener preservatives.
Draper says that anecdotally she sees progress in the first area – information sharing. But with both the second and third action areas – the common sustainability criteria and the preservatives push – work was already ongoing outside the partnership. Since the partnership those efforts seem to have benefitted mainly by heightened awareness of the issues.
The non-profit Sustainability Consortium, based in Tempe, Arizona, attended the 2014 BPC Summit, and had already been working for some time on science-based criteria for product sustainability.
“Our engagement with Forum for the Future,” said Carolyn Balz, manager of development and member operations at Sustainability Consortium, “has provided further momentum around consumer chemical safety issues, and the identification, adoption, and implementation of solutions which can be achieved through broad retailers such as Walmart and Target.”
In addition, the GC3 has been working on facilitating getting greener preservatives to market.
GC3’s Monica Becker says she is not yet clear whether the partnership has accelerated her organisation’s work. Becker says there was a recommendation by the different BPC partners for GC3 to “merge” its preservatives work into the overall BPC effort. Becker agreed to try to do that but says eventually her organisation decided instead to “operate in parallel”.
At a more recent meeting held by the Forum in December 2015 for a new “leadership group” formed by the partnership, Target and Walmart a greed to continue financial support for both the Forum’s work on partnership initiatives, and separately for GC3’s preservatives project.
Time for tough conversations
Draper of Forum for the Future says the BPC partnership has now moved to the “innovation and scale” phase. That means a leadership group created by BPC partners will begin to have more “difficult conversations” about what to work on in the next 18 months, which is the period for which Draper says she expects the partnership to continue.
Forum for the Future has done a great job of mapping what the personal care products sector looks like and showing how the sector doesn’t foster green innovation on its own – the barriers, as the map shows, are deep.
And while there’s no evidence that the partnership has done anything concrete (yet) to remove those barriers, that doesn’t mean it hasn’t been effective. First off, Walmart and Target seem to be intent on outdoing each other in giving consumers greener product choices. In February 2015 Walmart debuted the Sustainability Leaders shop, an online showcase of the products Walmart says “sustain people and the environment” (though the criteria for that are not published) while in 2014 Target introduced “Made to Matter” – a curated collection that started with 120 products Target deigned to be “natural, organic, or sustainable”. The Made to Matter line, designated by a big green bulls-eye label, was estimated to bring Target $1bn in sales in 2015.
In addition, the Washington-based Environmental Working Group, which also attended the 2014 Summit, unveiled in late October 2015 a new and fairly strict standard for personal care and beauty products called Verified. Products that receive the Verified label (expected this summer) must be free of ingredients EWG has on an unacceptable list, meet limits established by a “restricted” list and fully disclose product ingredients on packaging.
And GC3’s effort to bring more green preservatives to the market has ramped up: Becker says GC3 is working with InnoCentive of Waltham, Massachusetts, to crowdsource ideas for greener preservatives, and will award the best ideas with seed funding – in essence, doing exactly what the BPC partnership deemed most important. Becker says Walmart and Target have offered some funding for this crowdsourcing effort.
“The partnership did create more interest overall in greening personal care products,” she says. “It has elevated the idea to a priority. Brands are elevating it, chemical suppliers are elevating it – everybody is trying to make a difference.”
So while the tangible fruits of the Walmart-Target-Forum for the Future partnership may currently seem slight, the very fact of the partnership seems to be strategically bolstering efforts to improve personal care products’ sustainability.
Key insights from the beauty products and personal care (BPC) partnership
Invest time – the upfront investment in building system maps and understanding the main challenges meant that at the BPC Summit participants were able to join the core debates and solutions more quickly.
Take a system view – the beauty and personal care industry was stuck on sustainability; using system mapping enabled a fresh conversation.
Focus on people within the system – systems are people and they work through interactions between those people. Also, when it comes to persuading people to change, evidence, not just discussion, is important.
Identify leaders and nurture relationships – the support of Target and Walmart for Forum’s work was a key factor in compelling stakeholders from across the industry to come together in an unprecedented way.
Make time for participative diagnosis – after the Summit, Forum had a sense of what needed to happen with the three key areas for action that had been identified, but that was just the initial diagnosis. Next Forum had to delve deeper to understand the wider landscape and the different perspectives that existed.
Find better ways to be more than the sum of the parts. In the beauty and personal care industry, considerable work had already been done on preferred chemicals, ratings and information sharing, and green chemistry. Forum’s accelerator approach looked for ways to complement and fast-track what was already happening.
Source: Forum for the Future
*Target and Walmart ignored or declined requests for interviews and directed the author to contact Forum for the Future for questions regarding the partnership.sustainable products NGO Environment transparency sustainability