Software to Pinpoint Where Sustainability and Profits Meet
If companies knew how much money could be saved by going green it might be easier to design products that use less energy, water, and other resources. That’s the idea behind new software developed at Columbia University, and expanded upon by CoClear, a Harlem-based startup. The software lets companies compare the costs and benefits of making a product more sustainable so that investments that produce the highest return can be prioritized. The software will be on display at the Data Science Institute’s Demo Day on March 31.
“It turns decisions previously influenced by anecdotal evidence and emotion into decisions grounded in tangible costs and benefits,” said CoClear adviser Christoph Meinrenken, an environmental engineer at Columbia Engineering and the Earth Institute, who led the software’s initial development.
CoClear is currently working with ice cream franchise Ben & Jerry’s, a leading athletic footwear and apparel company, and others, to identify ways to cut costs and reduce environmental impacts through all stages of a product’s life cycle. This includes the growing of raw ingredients, the making, distribution, and use of the final product, and handling its eventual disposal. With the rise of big data, companies can now mine the minutiae of their value chains for insights that can benefit both their business and the environment. The shift comes at a time when consumers are asking for more detail about a product’s hidden costs, whether on their health or the planet’s.
Walmart, the world’s largest retailer, recently started stamping a small percentage of its products with badges to recognize high-scorers on a Sustainability Index created by The Sustainability Consortium, a consortium of companies using the Life Cycle Analysis (LCA) methodology to evaluate categories ranging from laundry detergent to TV screens. Some 3,000 Walmart products sold online are now listed.
“This is the first time a retailer has given shelf space-albeit virtual-to products made by companies working hardest to reduce their environmental impacts,” said Andrew Winston, an environmental strategist and author of The Big Pivot and Green to Gold. “We'll now learn whether people will choose products made in better ways.”
An earlier version of CoClear’s software, developed with PepsiCo, calculated carbon footprints of thousands of products simultaneously under a “fast” Life Cycle Analysis (LCA). Later, the methodology was expanded to include energy and water use, waste and corporate financial metrics so that environmental benefits and financial costs could be weighed side by side. Ben & Jerry’s is currently working with CoClear to find ways to reduce the carbon footprint of its ice cream.
The potential savings are real. When PepsiCo was considering a substitute for a key ingredient in some of its snacks, it used the fast LCA methodology to crunch the numbers. Published in a 2014 study in the Journal of Industrial Ecology, the results came as a surprise: the ingredient swap was projected to raise procurement costs by 8 percent and carbon emissions by up to 10 percent. The switch was nixed, and PepsiCo even saved $30 million by using the automated fast LCA for the evaluation rather than paid consultants.
Columbia’s work with PepsiCo, which started in 2007, led to the first carbon footprint certification of a product in the U.S., for Tropicana orange juice, prompting coverage in the New York Times. A key component of the software that has developed since then is a predictive model that automatically quantifies the environmental impacts of thousands of materials, from cotton to cardboard. Previously, companies had to manually transfer the information from LCA databases. “With data science and machine learning, we found a way to avoid that time-consuming step,” said Meinrenken.
CoClear was formed in 2013 by two Columbia graduates: Sally Paridis, CoClear’s Chief Executive Officer, holds a master’s in sustainability management from Columbia’s School of Continuing Education, and Erika Whillas, CoClear’s Chief Product Officer, holds a master’s in public administration from the School of International and Public Affairs. A third Columbia graduate, Daniel Chen, joined as Director of Data Analytics after finishing his master’s in earth and environmental engineering at the Engineering School.
A platform for calculating a product’s carbon footprint, among other environmental impacts, could be extremely useful if a global carbon tax is ever put into place to address global warming. For now, CoClear factors in the daily price of carbon on the U.S. voluntary market to give companies a sense of their exposure. “Big companies need to factor that into their risk management strategies,” said Paridis.
More: A Columbian Collaboration: CoClear CORE Impulse, Oct. 14, 2014