Chemistry, Materials & Packaging
Building 'a Single Version of the Truth':
How BASF, thinkstep Are Scaling Sustainable Portfolio Management, Part 1

On Wednesday at SB ’15 San Diego, BASF and thinkstep announced their collaboration in marketing the Sustainable Solution Steering method developed by BASF for sustainable portfolio management. The two organizations have signed a licensing agreement that extends their existing partnership to support BASF customers and other organizations in assessing and steering their product portfolio in line with sustainability criteria.

I sat down with Charlene Wall-Warren, Director of Sustainability at BASF, and Christoph Wilfert, CEO of thinkstep, to find out more about the partnership and the potential impacts of creating a common data foundation among sustainability metrics.

How did this partnership come about? How is the Solution Steering Methodology valuable for thinkstep and vice versa?

Wall-Warren: From BASF’s standpoint, we’ve put, over the last three years, a lot of time and effort into developing the Sustainable Steering Methodology, and we find it a really great way to holistically look at environmental, economic and social aspects of our products over their entire lifecycle. For us, it’s just a great way to be able to share that kind of thinking through a partner who’s extremely well-respected, well-connected - touching many, many markets and value chains, like we do - to maximize the impact so we can all drive more sustainability in our value chains.

Wilfert: I would echo that - we’re absolutely delighted. We’ve worked with BASF for many years and I think there aren’t that many companies who’ve pursued sustainability in such a strategic, rigorous fashion as BASF has. It is really core to BASF’s strategy and applying the method to the product portfolio is really a comprehensive piece of work that not that many companies have done at that level of scale. Many companies have picked up a product or two, but doing it for everything, globally over 60,000 products is a very impressive task. I think what Charlene mentioned is key: It’s really about value chains - it’s the output, what it generates. The future of sustainability is better business. What is a little harder is how you really make an economic and financial dimension happen and coexist with an environmental dimension, and that’s where I think BASF are front-runners.

Wall-Warren: I think the other great synergy is that for almost 20 years BASF has been doing lifecycle assessment and what we found over time is that that is an extremely valuable and important approach. We’ve developed our eco-efficiency analysis, but in order to really scale the impact it was necessary to find a more efficient, effective and manageable way to look at over 60,000 product solutions through a sustainability lens. Over the years, the partnership with thinkstep has spanned both lifecycle assessment methodology, really looking in detail and quantitatively over the lifecycle - and now the Sustainability Solution Steering leverages a lot of that thinking, but makes it more scalable. Culturally speaking, both organizations recognize the value of both kinds of approaches and that you need to also be flexible. Sometimes you want to do a very in-depth lifecycle analysis, and sometimes you’re looking to capture those principles and be able to scale-up and make the impact, and maybe you’re not able to do a lifecycle assessment for 60,000 products.

When you were coming to this agreement or even when you were developing this methodology, did you have other industries in mind that you thought would really benefit from this kind of framework? When you say you want to scale it up, what did you have in mind?

Wall-Warren: Absolutely. As BASF, we’re at the very front end of the value chain in nearly every industry - whether it’s agriculture or construction or energy or consumer goods, packaging, whatever it might be. The synergy is really in being able to take this kind of thinking and the ubiquitous nature of chemistry in all of those value chains and using the Sustainable Solution Steering Methodology as we did. We looked at all these different industries and said, here are our accelerators that bring substantial sustainability contributions, this is where we really want to grow in the value chains, but then also to offer that so that others can use similar thinking. There are so many different systems right now on sustainability in each of the value chains and different questions being asked - if there’s an opportunity to harmonize around the issues that are likely very important to all of us, but we’re maybe looking at it through a slightly different lens, again you have the scalability and the impact along the different value chains. That’s one of the great things about the partnership with thinkstep - they also have a lot of experience and connections in many of the value chains, if not all, that we are also actively contributing to. We’ve gotten interest from value chains ranging from home and personal care to food to more industrial products, so we’ve gotten a lot of interest in the methodology and we want to be able to share it and have others leverage it as well.

Wilfert: Charlene made a very good point, which is that it’s a methodology BASF has applied to themselves first. Chemistry is everywhere, and I think that’s a key point. The fact that this method looks at products that influence entire value chains in other sectors made it particularly appealing for us, because we have presence in every sector and what we learn here and apply here can be applied elsewhere.

Is the methodology in its final form, or do you see it continuing to evolve as markets change and new metrics emerge?

Wall-Warren: The methodology itself is designed to be able to allow the markets to evolve and then the conclusions can evolve as well. So it’s not, ‘do it one time and now you’re done,’ because each of the markets continually have new drivers - a regulatory driver or maybe a stakeholder perception that’s changing on a certain topic. The methodology itself has a core, but it is designed to be flexible and repeatable enough that you can evolve with the marketplace - that’s a core element, spotting those trends, being proactive and being able to leverage them.

Wilfert: For us, evolution is a very interesting dimension. If you look at chemistry and chemicals, substances today are notoriously hard to bring together with environmental aspects and lifecycle assessments. We’re the world leader in lifecycle assessments, so we look at the lifecycle of products. Regulatory compliance, for example, comes in at the substance level, not at the materials level. For example, we have this water bottle in front of us and there’s a coating around it; a lifecycle assessment will tell you this is a certain aluminum or steel, but doesn’t say what the substances are within that steel. That bridge has not been closed, or closed well, in a highly scalable fashion. In North America, there are conversations about health product declarations and building environmental product declarations, and they’re completely separate strands of activity and they shouldn’t be. The materials that are being used for an EPD have substances that tell you something about an HPD and there’s no scalable way of bringing that together. The evolution will be part of that - to instantiate the methodology and the IP, the knowledge that is in that method, onto the thinkstep.one platform.

Wall-Warren: To emphasize a point that you raised Christoph - the methodology also is unique in the sense that it’s scalable, it’s lifecycle thinking and we are looking at economic, environmental and social aspects. So to your point, we have lots of different systems that are maybe looking at toxicity potential of a material or maybe they’re looking at a particular environmental aspect, and you have lots of things running on the track just looking at the economic value, so the methodology is designed to look at all three of those sustainability dimensions through a scalable, lifecycle lens.

Wilfert: I think that’s a really critical point, because that’s a door that has not been opened yet. A global partner with the power of BASF and the lifecycle, that coming together I think will change the industry.

I’ve heard a lot of talk about that this week – the desire for one tool that can look at their entire product, their entire value chain, all without having to look for different metrics from different organizations. Is this the magic bullet that people have been looking for?

Wall-Warren: Great question. It would be wonderful if this could be the silver bullet for everything. I think what it uniquely offers, in addition to what we just mentioned, is a way to get stakeholders from different disciplines in the room, which you have to do. What you don’t want is the lifecycle experts sitting by themselves, away from R&D, away from marketing - you want to be able to be able to bring everyone together and have a dialogue using this kind of tool and approach so that everyone is learning and evolving together and you’re getting the best outcome. Will it be the only approach in the future? Probably not. You need many tools in the toolbox to build anything, but we think it will be a very powerful tool that, applied in the right places, can be very scalable and we’re really optimistic about the potential for it.

Wilfert: I would echo that, it’s no silver bullet. Our vision at thinkstep is to have a common data foundation - a single version of the truth, if you will - that serves multiple stakeholders and multiple purposes. If you think back to what SAP brought to the market at the time that it was created, there was a common data repository - accounts receivables, manufacturing and the sales team all had a common notion of what a ‘customer’ is; they wouldn’t make the view of the customer in their own silos. I think our industry is lacking a single version of the truth where multiple stakeholders, whether they be lifecycle assessment or sales people, they need a single repository, a data foundation on which we can build our arguments to our respective stakeholders. That doesn’t exist today and I think it slows down the entire sustainability movement right now because there’s too much friction, too many people trying to compare and contrast systems, methods, data sets and nothing really talks to one another in a scalable way. Our mission is to change that.

Is there anything else that you’d like to add?

Wall-Warren: I’ve worked in the sustainability space for 15 years, out of a 20-year career, and I think one of the big challenges we still have in our community is that bridge, that dialogue between sustainability and other disciplines - business or whatever it might be. I am really excited for the potential for this kind of an approach and for our partnership to have this global reach, this multiple industry reach, and to generate more of these dialogues that bring people from different disciplines together and increase the awareness, the understanding and the impact of sustainable solutions. I’m very optimistic - I think we’ll make a lot of really great progress with this partnership and I think we found an excellent partner for leveraging our many years of experience, thinkstep’s many years of experience, and the global reach and opportunity.

Wilfert: Since you took the very broad perspective I’ll make a very practical last statement. This method is amazing - so much thought has gone into it - so on a very practical level, anyone in the chemicals industry, give us a call and we can start to engage.

Part 2