According to its developer The Sustainability Consortium (TSC), which launched the index in 2009 in the USA, allows retailers to create category scorecards which buyers then use to evaluate the sustainability credentials of suppliers and offer recommendations for improvements.
The relevant environmental and social issues are specific to product categories. A supply chain ‘hotspot’ for chicken, for instance, ranges from assessing antibiotic use, animal welfare, carcass utilisation and workers’ rights.
By making the decision-making process easier for retailers, manufacturers and suppliers along the value chain, industry can increase the availability of more sustainable consumer products.
Koen Boone, Wageningen university researcher involved in the pilot scheme and managing director at TSC Europe told FoodNavigator the impact in Europe could be significant. “I think that the implementation of our toolkits will have a significant impact on the sustainability of the food industry. If sustainability will be part of the buying criteria for all food products, it will create a strong signal throughout the supply chain.”
For a yearly fee of €640 ($700), suppliers and retailers receive access to 117 sustainability toolkits including background documents and improvement opportunities. Key performance indicators (KPI's) are used to assess performance for these issues.
High-profile food industry members include Mars, General Mills, Kellogg’s, PepsiCo, Monsanto and Unilever.
Interest greatest in North and West Europe
Products tested in the Dutch pilot scheme included potatoes, tomatoes, dairy products, meat such as poultry and beef, nuts and chocolate.
Several US and European retailers are already using the toolkit on a small scale – either for a limited number of categories or for certain sustainability issues, but Boone said north west Europe has so far shown more of an interest in using the toolkit than southern or eastern regions.
However, many of the participating retailers did not want their names published until they had decided whether to extent use of the toolkit across all categories, he added.
“We also have some suppliers piloting the tools by sending KPI's to their suppliers and we also have pilots from government related organisations for public purchasing. There are two retailers who implemented the tools over nearly all product categories. Walmart has implemented the tools over nearly all product categories already for several years.”
Richard Schouten from the Dutch Southern Agriculture and Horticulture Organisation (ZLTO) said the pilot scheme had shown it is imperative that farmers are given a clear indication as to what their clients expect of them in terms of sustainability. “TSC can play an important role in this process by correlating the applied indicators. I do believe, however, that the primary sector needs to become more involved in this initiative and in establishing standards,” he said.
Dutch retailer Ahold, Rabobank and the Dutch Ministry of Economic Affairs were all involved in the first pilot scheme. The next step for TSC in the Netherlands will be a second pilot scheme involving a second retailer and the Dutch Sustainable Food Alliance.
According to TSC, over 1,700 industry players use the tool which equates to more than €120 billion in consumer sales.