The market is supposed to tell companies how well they are doing. If they are making a product and selling it at a profit, then they are doing well in absolute terms. And if they are earning more profit than their competitors then they are doing well in relative terms. But how do they know if they are doing well on benchmarks other than profit? In particular, how does a company know if it is helping the environment or hurting it? And how do companies know if they are doing it more or less than their peers? In the past companies would perform life cycle assessments (LCAs) to measure the environmental impact of their products, processes, and services. Doing this was a tedious, resource-intensive task, and so unsurprisingly it tended to be performed after a product was further along in production or development rather than in the early prototyping phase. But using new tools and data sets, companies are now able to perform LCAs much more efficiently so that they can use this information to inform product development. One of the leaders in this field is Nike, which has already established a solid record for itself as a climate-friendly company. Many companies have made this move in response to consumers who both reward businesses that are environmentally friendly and punish those that are not. To measure the environmental impact of its products, Nike developed the Materials Sustainability Index (MSI), a metric that allows the company to evaluate the impact of using different materials in its products. Over eight years the company amassed an enormous trove of data on the environmental impact of the more than 16,000 materials used in its various products. But rather than keep this data in-house, Nike decided to publicly release the MSI. The data is impressively comprehensive, and like a good database, includes detailed information about the source of data and assigns a data quality score to each record. In addition to the overall scores for different materials, Nike has made available the underlying primary data, documentation, and methodology public with the understanding that others could help fill in gaps and improve the algorithms used to generate scores. The company has made the MSI available through an application programming interface (API) which allows other developers to build new tools off of this dataset. The data is available under an Open Database License which allows it to be repurposed and reused as long as derivative products are also open. This type of license helps avoid the free-rider problem by requiring others who build tools off of this data to contribute back to the community. Nike provided a major contribution to this endeavor, but it is not doing this alone. The Sustainable Apparel Coalition, which now maintains the MSI, includes over 80 clothing and footwear brands, retailers, suppliers and others, such as Adidas, DuPont, Gap, H&M, and Walmart. While the full dataset can be repurposed and integrated in other applications, a subset of scores for basic materials is accessible to casual users who can view the data using a public online tool. This allows users to see the overall rating for different types of materials. For example, spandex is rated 13.9 out of 50 (higher scores are better) whereas rubber scores 41.0. Consumers can also dig a bit deeper and explore the environmental impact of different materials along four dimensions: energy and greenhouse gas intensity, chemistry (e.g. toxicity and carcinogenicity), water and land use, and waste. So now when creative teams are designing products, they can see how their design decisions will impact both production costs and the environment. While this by no means guarantees that product designers will start making eco-friendly reforms, having this information at their fingertips does open the door for more sustainable design. And Nike has even created an Environmental Apparel Design Tool that helps designers do just that. The ultimate goal is to have cradle-to-grave environmental impact assessments of consumer goods. As we’ve seen in other contexts, when data is available, consumers can make more informed decisions, from buying more affordable and effective health care to choosing the movie that they will enjoy the most. For example, the website GoodGuide provides information about the health, environmental and social impacts of a range of consumer goods using data from commercial sources, government agencies, manufacturers, non-profits, and the media. Eventually tools built on this data will allow consumers to benchmark different products to find the one that meets their criteria of price, functionality, and environmental impact. Imagine a new sorting tool for products on Amazon so that consumers can find only environmentally friendly products. This data enables individuals to be more responsible consumers and businesses to be more responsible producers. It also puts pressure on businesses further down the supply chain to reduce the environmental impact of their products and publish reliable open data about the impact of their products. Ultimately, this creates a virtuous cycle that allows consumers to reward socially-responsible companies. image: wikipedia/creative commons
How Nike is Using Data to Help Save the Planet
