6 Where Does Sustainability Information Come From?

If society were to decide to inject sustainability information into the economic system, where would such information originate? How would it be managed? Who would ensure its credibility?

For a simple informational demand, such as a BGH notice on a milk carton, the mechanisms involved would be relatively simple. The dairy farmer producing the milk knows with certainty whether or not BGH is used on the farm. That information would have to be retained through the small number of steps involved in bringing the milk from the farm to the supermarket. As milk was aggregated from individual farms to delivery trucks, intermediate cooperatives, and processing and packaging plants, BGH-related information would have to be retained so that the milk could be sold in the supermarket with the appropriate “Yes BGH” or “No BGH” indicator.

For something like a five-star sustainability indicator, though, the information milieu would be much more complicated. The process of assigning the stars and preserving the underlying information, as millions of products made their way through the commercial stream, would necessitate some choices about very complex issues. For some items of information, such as BGH use, the challenge would be the straightforward one of preserving information from the point of origin through a final sale. But other types of information have to be created before they can be preserved. A product’s contribution to greenhouse gases, for example, isn’t a self-evident piece of information, the way BGH use is. If a product’s sustainability rating is to be based partly on greenhouse-gas contributions, then seemingly a protocol would have to be established to document how the contribution is determined, rated, and presented. In this respect, greenhouse gases are like other more familiar but equally non-obvious product attributes, such as calories-per-serving, gross vehicle weight, or toxic constituents. Information about such attributes can be provided readily enough, but it is only useful in the context of a fairly standardized means of determining what information is to be presented.

Existing product information comes from a number of sources, and as a result of various directives and practices. The original manufacturer is obviously an important source of product information, but so are merchants. Industry associations play a role by creating uniform standards to which categories of products must adhere. A camera’s ISO (film-speed) setting and a router’s 802.11 (wireless) designation are examples of industry standards—standards that were arrived at through an arduous international consensus process. Government requirements play a similar role in mandating that certain information, such as nutritional labeling, appear on certain products. And product reviews—whether from journalists, organizations, bloggers, or commenters—play a large (and, no doubt, increasing) role in bringing forward information on individual products.

The information milieu, then, is a hybrid sort of creature, a combination of centralized and formalized information requirements that mix together with a hodgepodge of ad hoc information from numerous unfettered sources. This same hybrid mix can form a basis for providing sustainability information to the market. Yes, a formalized metric for documenting a product’s contribution to greenhouse gases may be needed, but this is also an attribute that can be addressed through less formalized approaches. Because there are many facets to marketplace information, there are also many ways we can begin to create broad and comprehensive sustainability information.

One of the most effective starting points would be actions taken by a very large purchaser. This could be a private-sector buyer, such as Walmart or Target, or a public buyer, such as the US government or the European Union. These entities, spending tens or hundreds of billions of dollars each year, have the budget power to establish purchasing standards and reporting specifications affecting broad swaths of the global market.

Let’s begin with the private sector. Suppose that Walmart announced to its suppliers a policy along the following lines:

Beginning in 20XX, all products sold at Walmart should include a URL where consumers can find sustainability information on the specific product, and can post their own observations about products’ sustainability.

There are many variations on what a sustainability policy might look like, how it would be worded, and the specifics of what, in fact, was required of suppliers, but for the moment, we will stick with the above hypothetical and work through some of its meaning.

The crucial phrase, of course, is “sustainability information.” What does that mean?

In a rigidly constructed information system, each element of sustainability would be well defined, as would the type of data to be presented. Some sort of reporting authority—a corporation, a government agency, an international organization, or a “blue ribbon panel” of experts—would specify what is to be reported and how to report it. An example of this approach is the Global Reporting Initiative, which has codified sustainability reporting in great detail for different areas (e.g., economic, social, environmental) and for different sectors of the economy (e.g., financial services, airports, electric utilities, food processing). In the case of “market presence,” for example, GRI calls for reporting a “range of ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation.”

In a completely open-ended system, on the other hand, the term ‘sustainability information’ would mean whatever the manufacturer of a product thinks it means, and the website for the product would contain information the manufacturer deems relevant. If the manufacturer thinks information about greenhouse gases is relevant, such information will be included in whatever format the manufacturer deemed fitting. If greenhouse gases don’t seem significant, no information will be forthcoming. In a more structured system, Walmart would lay out the specifications of the types of information that should be included, providing specifications for what type of greenhouse-gas information should be reported, when it should be reported, and how the data should be generated. A hybrid of these two approaches would include a de minimis set of standardized information on sustainability, along with any additional information that seems worth including on an ad hoc basis.

For any of these scenarios, visitors to a product’s sustainability-information website would have the opportunity to post comments about the overall quality of the information reported and the types of information that aren’t—but should be—included. The presence of greenhouse-gas information might get a lot of favorable feedback from consumers, for example, whereas the absence of information on child labor might elicit a large number of negative comments. It isn’t hard to envision a system that evolves—one that starts with only a few structured elements, then solidifies over the years as consumers’ use of the sites and collective comments on useful and missing information help to clarify what kind of sustainability information is most desired by users.

Walmart could establish its policy as an absolute: “Provide sustainability information if you want to do business with us.” Or it could craft its policy as an incentives-based policy: “Only products with sustainability information are featured in our ads, get preferential store displays, are put on sale, etc.” Or it could make the policy entirely voluntary: “We would like to see a link to sustainability information, but really it’s up to you if you want to provide it.”

Of course, Walmart is highlighted here as an example, and, as the world’s largest merchandiser, an example chosen for obvious reasons. But other large retailers also could serve as examples. So could large purchasers, such as the US government, which could announce a policy of purchasing only goods that include sustainability information.

Whoever makes that first move, and however it is structured, an announcement along the lines of what we have been discussing carries an unmistakable message: Sustainability information is now a necessary component of doing business. An equally important if more subtle corollary to the message is that the public’s response to a company’s sustainability information will be an important consideration in future transactions. Those two elements—sustainability webpages for individual products, and the opportunity for feedback from consumers—are the informational requirements needed to bring sustainability squarely into the marketplace. They aren’t equivalent to the simple five-star rating we described earlier, but they constitute an enormous step in that direction. The link to sustainability information for a product is the Web-enabled analogue to the BGH label we imagined for milk. It serves a similar function by eliminating the marketplace option of staying silent. Once sustainability information becomes an expected and normal part of a marketplace transaction, consumers are able to respond to that information as a direct reflection of their individually held values, and of the weight that each person assigns to those values. And now not only can consumers make their market preferences known (by buying or not buying products partly on the basis of sustainability information); by using whatever commenting or ranking mechanisms are built into the sustainability-information websites, they can also weigh in on the sustainability information itself.

In short, undesirable products will tend to disappear from the marketplace, as they always have. The reason Edsels are no longer available is that consumers didn’t want to buy them. The difference now is that sustainability information can be woven into consumers’ choice about what is or isn’t desirable. BGH milk will disappear from the market if consumers—once they have information about BGH—treat it as they treated Edsels. In much the same manner, undesirable forms of information can be expected to diminish as consumers’ preferences about what makes for a good presentation of such information become known. It isn’t beyond reason to suppose that a five-star sustainability ranking system could emerge spontaneously from the push and pull of consumers’ demands, although reason also dictates that an externally imposed, consciously designed ranking system might be needed to bring such a system into being in the near term and have it be applied consistently throughout the market.

Sustainability Information: An Example

We can apply the BGH example more broadly to illustrate what sustainability information—one variant of it, at least—might look like, and how the market might respond to its presence.

Suppose that Walmart or Amazon or another large market presence—Target, Tesco, Carrefour, Alibaba, the US government, NATO, the European Union, the United Nations—announces its expectation that products will henceforth include sustainability information. The announcement adopts the hybrid approach we described above. The nature and the extent of the information will largely be at the discretion of each product manufacturer, but should include, at a minimum, the following three elements:

Each product has a Web address at which anyone interested can access information on the product’s sustainability details and visitors can comment on the quality of the information provided.

Such a system could easily involve detailed forms, guidance documents, and instructions, but that isn’t what we have in mind, at least not for this particular mental exercise. Our system is simple: a statement of expectations, and a list of minimal requirements, no more elaborate than the one just presented.

Imagine that you are a merchant with a product or a service that you have marketed to Walmart1 in the past, and that you have now become aware of Walmart’s new policy. You have to decide whether you want to continue marketing through Walmart. If the answer is Yes, you are obliged to respond to the new sustainability policy, which means evaluating the information you have available and making several decisions about each of your products:

No matter how you choose to answer these questions (along with any auxiliary questions that you infer), your responses will differ from one product to the next, and will also be very different from the responses of other suppliers providing information for their products. Some suppliers will, no doubt, provide very perfunctory information; others will provide elaborate detail on the sustainability-related aspects of their products. Some will address only the three elements that Walmart identified; others will range far and wide over the broad landscape of products’ sustainability. Some will provide accurate information; others will inflate their sustainability claims, lie outright, use boilerplate language with little meaning, and make mistaken claims about their products. And no doubt there will be responses that are hard to imagine ahead of time but that will add further variability to the overall information system.

In the absence of a standardized format (which Walmart doesn’t provide in this particular hybrid example), the sustainability-information webpages also will be highly variable, both in presentation and in the feedback and commenting options they give consumers.

We can reasonably expect a great degree of variability in consumers’ feedback to the sustainability pages. Walmart sells many thousands, perhaps millions, of discrete products, and now each of them will have its own sustainability webpage. Many of the pages may never have a single visitor; others will have page views but no consumer feedback. Conversely, highly trafficked pages will be visited thousands of times a day and will amass an enormous amount of feedback from users.

This would be a messy, somewhat chaotic system. The market, though, has a wonderful capacity for bringing order to the chaos of millions of individual decisions, and it can do so here as well, not only with the webpages but also with the products on the shelves of Walmart’s stores. We have deliberately started with a loosely structured “capitalistic” version of a sustainability information system, one with a minimal degree of planning and centralized organization, in order to emphasize the self-organizing possibilities that are inherent in an information-rich system.

Sustainability at Dupreshi

Suppose that a facility accepts Walmart’s conditions and decides to take the minimalist approach by posting a webpage—one sustainability webpage, out of hundreds of thousands of pages for the individual products that Walmart carries—with three short descriptions of the three required elements:

  • Factory identification: This item was made by the Dupreshi Garment Company in factory #345.
  • Carbon footprint: We have requested that all our suppliers and shippers take steps to minimize their emission of greenhouse gases.
  • Worker safety and dignity: Dupreshi follows applicable laws in all its facilities and subscribes to the United Nations’ Guiding Principles on Business and Human Rights.

As we mentioned earlier, it is possible that this particular page will never be viewed and will never receive any feedback. But the page may have a steady viewership and receive plenty of feedback. Under the right circumstances, it may even go viral. Over time, the entire spectrum of visibility may unfold. A page may languish in obscurity for a year or two, then attract attention for one reason or another and receive a lot of commentary and notice, then fade back into quietude years later.

Suppose that, after a long period of quiet, a viewer posts an anonymous comment:

I work at Dupreshi Factory #345 at 185 Lamatia Road in Chittagong, Bangladesh. Do not believe what you read here. Working conditions are terrible and dangerous. Many workers are children no more than 10 or 11 years of age. Last week a young girl crushed her arm in a packaging machine and was told to leave and not come back. She has no medical care for her injury.

This is followed soon after by a second comment:

It’s not just the Dupreshi workers who are made to suffer. I live 100 meters from their Chittagong factory, and the stench from the factory is unbearable. It’s so strong, it makes the whole community sick. I don’t know what chemical it is, or what causes it, but we have complained time and time again to the owners, to no avail.

What happens next? Even if 99 times out of 100 the answer is “Nothing much,” it isn’t at all difficult to imagine a scenario in which the comment leads to a response of some sort. Perhaps someone posts the comment on her Facebook page, urging her friends not to shop at Walmart. A community organizer in Chittagong might urge other workers to post their observations about working conditions at the factory on the webpage. A reporter might telephone Dupreshi and Walmart and ask for a comment, or might arrange to visit the factory. Walmart might decide to review its supplier relationship with Dupreshi. And, of course, the company itself might respond directly:

These are nothing but lies, and were probably put here by our competitors to cause trouble and discredit us. No children work at our Lamatia Road factory. No one was injured and fired. Our neighbors have not complained. Dupreshi operates with the highest degree of responsibility for our workers and for the environment.

The dialogue raises obvious questions about the truth of the situation at Dupreshi. But even in the absence of clarity, the exchanges have added to the information on the factory. The original sustainability report identified the facility only as Factory #345, but the subsequent commentary added a street address that was confirmed by the company’s response. We see here the tiniest of informational tweaks: the addition and validation of a piece of information that wasn’t previously available.

What of the diametrically opposed claims about Dupreshi’s operations? Regardless of which set of comments is closer to the truth, the resulting dialogue brings a modicum of additional scrutiny to Dupreshi, leading customers, communities, journalists, and merchants to examine their respective relationships with the company in more detail. The attention, while no guarantee of change, increases the likelihood that Dupreshi will, at the very least, amend its sustainability report to provide more than the absolute minimum of information on its products, which will lead to further informational tweaks. In response to increased scrutiny (or even the possibility of it), Dupreshi might even go several steps further to change its manufacturing operations, tweaking its products as well as its sustainability information.

Variations on the above scenario will play out millions of times for millions of other products, and therein lies the potential of sustainability reporting. The simple provision of marketplace information may bring many small changes that may lead to enormous changes overall. Over time, small improvements to the system, such as improved location information, can result in much fuller accounts of a product’s sustainability attributes and significant changes in how those products are produced.

The hypothetical sustainability system we have imagined here has a few straightforward features that magnify its potential:

In our thoroughly hypothetical situation, we can make market participants say or do anything we please in response to Dupreshi’s sustainability report, just as we crafted the report itself to suit our purposes. Likewise, we can have Dupreshi respond—or not—as we see fit. The exercise has value in making concrete the ways in which participants can create and react to sustainability reports, but it also puts undue focus on a single product from a single company and on the small number of individuals who take an interest in the information provided by the company about that one product. In the process of focusing on a single drop, we risk losing sight of the ocean.

Dupreshi’s response may be interesting, but the big story will be the response of the market as a whole. What happens in the world when thousands of companies inject into the market sustainability information on millions of products? The answer is straightforward: A market that is awash in sustainability information (and only a market that is awash in such information) will respond to that information in a manner that collectively reflects the values of the billions of market participants. The market is the blender that mixes together the endless number of consumers’ reactions— “I care a lot about this, a little about that, and not at all about this other thing”—and sorts them out with its vast information-processing capabilities.

Can a “free-market” information system really work this way? Is it possible for a sustainability reporting system to actually present useful and trustworthy information when anyone can post to it? Common sense may seem to answer that it isn’t possible—or at least, not very likely—that a crowdsourced system would prove reliable. But experience says otherwise. Wikipedia is an open online encyclopedia to which anyone can contribute. Individuals can, and do, try to “game” Wikipedia by posting scurrilous, misleading, or simply goofy information. But the online community and the rules under which Wikipedia functions are both robust enough that the end product is perhaps the most useful and widely used reference tool in the Internet. Crowdsourced information can be trustworthy.

Our suspicion, then, is that the direct provision of sustainability information will make the world a more sustainable place, because the bulk of the individuals in the market really do care about issues ranging from worker welfare to global warming. The complex web of dynamics that have the potential to alter Dupreshi’s way of doing business or to rebalance the use of BGH in milk production will operate millions of times to move the market toward more fully and more accurately reflecting the values of all its participants.

Though there is no way to know in advance exactly how such a system would unfold in all its details, we can speculate about some of the ways in which it might present itself over time:

Those are the informational building blocks needed to bring sustainability squarely into the marketplace. It is not yet the simple, five-star rating we described earlier, but it is an enormous step in that direction. The link to sustainability information for a product is the Web-enabled analogue to the BGH label we imagined for milk, and it serves a similar function by eliminating the marketplace option of staying silent. Once sustainability information has become a requirement (or at least a near-requirement), consumers will be able to respond to that information as a direct reflection of their individually held values, and of the weight that each of them accords to those values. And not only will consumers be able to make their market preferences known (by buying or not buying products partly on the basis of sustainability information); they will also be able to weigh in on the sustainability information itself by using the commenting or ranking mechanisms built in to the sustainability-information websites.

Undesirable products will tend to disappear from the marketplace, as they always have. The difference now, though, is that sustainability information will be woven into consumers’ choices.

The sum total of all this will be a market shift toward sustainability—a shift as substantial as the underlying consumers’ sentiment and oriented toward the features that the buying public deems most important. The shift may be very sizable, and indeed we suspect it will be. On the other hand, it may be relatively minor. After all, it isn’t possible, from our parochial perspectives as we sit here in Washington D.C., to effectively gauge the overall sentiments of a market composed of billions of individuals making trillions of decisions. But once the appropriate information on sustainability is put forward, the market itself will make its collective sentiments known.

What of the five stars?

Earlier, we speculated about the advantages of a simple reporting system that would rate each product on a five-star sustainability scale. How—and where—does this fit in?

Visit almost any large buying site on the Internet, and the ratings are right there. For example, the four-out-of-five-stars rating for an AT&T phone (figure 6.1) represents the accumulated feedback from several hundred customers’ reviews. A would-be buyer can read the full reviews, but can also get information in an instant-overview format through the star system. The option to provide a star-based ranking is a built-in feature of the system, but the actual ranking is the sum total of the inputs from users.

10688_006_fig_001.jpg

Figure 6.1

The same sort of approach could be used for sustainability rankings. The entity managing the sustainability sites (we are still using Walmart as our example here) can design the pages to include free-text submissions of information, observations, facts and opinions, and can provide the option for a simpler “rate this product’s sustainability” feature, with users clicking on one to five stars. The overall product-sustainability rating would be based on the total of combined user ratings, just as is the case with the AT&T phone’s product rating.

The actual rating could be a straightforward sum of all users’ ratings. It could also rely on input from users as only one of several factors leading to a star rating. Walmart could include other sources of information, such as a sustainability questionnaire submitted by the manufacturer for each product or input from a third-party certification organization, as a way of establishing an initial rating.

There are obviously many variations on how the rating system could be constructed, managed, and presented. Like the shopping sites themselves, the sustainability rating system probably would change as suppliers, merchants, shoppers, and other interested parties all learned about and became more familiar with the system. As initial weaknesses are identified—people will, no doubt, try to “game” the system with submissions intended to artificially boost or lower a product’s ranking—these will be dealt with as the system grows and adjusts. For example, Walmart might decide to introduce an opportunity to rate the ratings, mirroring another feature that is common on shopping sites. (Was this review helpful? Thumbs up or thumbs down.) The written reviews deemed most useful by users would receive more visibility than other reviews; if the reviews include a star rating, then that rating could be given more weight than would a rating from an unhelpful review.

The Internet is clearly the ideal tool for making all this product-specific sustainability information available. That the Internet is a powerful mechanism for dispensing information is obvious. Less apparent is the powerful role the Internet can play in achieving a dynamic, geographically robust consensus among all market participants as to what information about each of the millions of items of commerce should be put forward.

Products should carry a simple webpage address that any interested party can visit to learn more about the attributes of the product that bear on social values. The webpage wouldn’t be a product description page, such as one now finds on Amazon.com and on the sites of other online merchants (though it could certainly include links back to such commercial sites). Instead, it would be the product’s sustainability page, which would focus on the types of environmental, social, and community issues that generally fit under the umbrella of the term ‘sustainability’. Although we have envisioned a process that begins with one merchant (Walmart) initiating the provision of information, ultimately the sustainability pages should be available for all products, no matter where or how they are sold.

The webpage could describe where and how the product is made, where it is sold, the environmental impacts of its manufacture and use, the conditions under which the workers do their jobs to produce the product, and other important information. The webpage would allow visitors to the site to post comments and reviews. It also would have a rating mechanism so those same visitors could assess how well the information provided addresses any of their social values and concerns.

We will even go so far as to recommend setting aside a corner of the Internet for this activity. A Product Sustainability Information Protocol could be created to provide a unique set of addresses for sustainability pages. The Internet address could be identified with a PSIP:// header. A simple 4-by-4 alphanumeric construction, such as PSIP://S3RT.57BK provides more than a trillion combinations, which should be more than enough to get the process started. The URL is neat and compact, and can easily fit on almost any item in commerce. Every product for sale now would have a unique link to sustainability information that could be accessed as quickly as one can type in its eight-digit URL.

High-Quality Information in the Market

In essence, our proposition is this:

Information fuels the global marketplace. For the market to be at its best, the information must be of the highest quality. Information can be of high quality only if it informs consumers about things they care about—including the state of the world.

Put simply:

Better Information = Better Economic Performance = A More Sustainable World.

The market can move forward with information of middling quality, just as your car can run on gasoline even after a troublemaker has poured some water into its gas tank. The water degrades the quality of your fuel and lowers your vehicle’s overall performance. Too much contaminated fuel and the car won’t run at all. If the gas is only moderately degraded, however, the car will still run, though with varying amounts of chugging, pinging, coughing, and sputtering.

In our view, the Soviet economic system failed largely because the information “fuel” it needed was too heavily contaminated. The Soviet economy lacked the ability to generate the high-quality information that the market needed to function. The capitalist system operates much more effectively, chiefly because information generation and information flow are of much higher quality—more robust, more timely, more pertinent, and simply better—than they are in centralized economies. Neither communism nor capitalism functions at peak performance, however, and information shortcomings are a large part of the reason for their inability to do so.

The Soviet Union’s Five-Year Plans were attempts to consolidate and respond to known information, but were also, by their very nature, obstacles to gleaning timely information and responding accordingly. A production schedule for factory output in 1955, designed in the 1950 Five-Year Plan and based on data from the 1940s, couldn’t be successful without a mechanism for being highly responsive in the interim to new information. A particularly bad storm in one part of the USSR immediately changed the demand for boots, and no pre-determined production schedule could anticipate such demand or effectively respond to it. Changes in production had to await the next meeting of the Central Committee of the Footwear, Leather, and Leather Goods Industry, which then made a recommendation to the All-Union Artificial Hides and Film Materials Industrial Association, which then … . You get the picture, we’re sure.

It wasn’t the accuracy of the information in the Five-Year Plan that was the main problem. The bigger problems that the Soviet system faced were that information was slow to materialize and that a lot of information was simply missing. Even if the planning process had been based on the best demographic numbers, supply-chain data, and consumption projections the world had ever seen, the plan would still have been information-poor when it came to responding to the demands of the market, and fairly blind and deaf to the types of new information that materialize constantly—like a sudden storm—in any dynamic economic system.

We know from experience that the capitalist economy does a far better job of reading the tea leaves of consumers’ demand, understanding what is needed in the market, producing the right numbers and types of goods—wood screws, boots, shoes, phones—and getting them to the markets in which they are needed. Capitalism responds to information in a way that central planning cannot. The machinery of capitalism has hummed along, fueled by high-quality information, whereas the Soviet system sputtered and came to a halt.

But capitalism, as effective as it has been, still sputters and coughs from an informational fuel mix that is missing some significant ingredients. It can be made to operate much more effectively, and an important step in making that happen—our proposition—is to introduce better information into the marketplace to improve overall economic performance. This raises questions, however: What is meant by ‘better’? What makes for “better performance” or “better information”?

Economics is very different from its sister disciplines in the hard sciences. The gravitational constant and plate tectonics are entirely independent of anything that human beings might want or feel about how things should be in this world. In fact, human beings could disappear from the planet entirely and these physical constants and geologic forces wouldn’t be affected in the least. But remove humans from the marketplace and the marketplace itself disappears. Economics is essentially all about human desire. Narrowly construed, it is about what people want to buy and how much they are willing to pay for the things they want. In a more expansive view (only slightly more expansive), economics is about the things people value: not only what products they want and what prices they are willing to pay, but how those products comport with the personal values of each individual shopper: how a product comes into existence, what materials are used in its manufacture, how producers interact with workers and communities and with the planet in the course of making things.

Buying a pair of shoes, for example, can be seen as a simple desire: I want new shoes. But it’s actually a far more complex set of desires: I want shoes of a particular style, color, brand, comfort, performance, durability, and price. I want shoes that other people will look at and say “Cool shoes!” I want good service and a flexible return policy. I want fast delivery and a comfortable shopping experience, whether I’m dealing with a brick-and-mortar store or an online merchant. And in addition, I want to buy the shoes with a clean conscience, even if I’m pretty vague about what I mean by that.

The marketplace has elevated one human desire—the desire to not pay more than one has to for a certain item—above all others, and does a reasonably thorough job of providing high-quality information about that particular aspect of our collective value system. But it falls short in other areas of our collective interests, particularly regarding social values. Even if we imagine that 99 percent of the world’s consumers want BGH-free milk, or goods made without child labor, there is no way the market can respond to those consumers’ desires, because high-quality information related to those values is simply not available. If the information were to come forward somehow—if information about the use of BGH or child labor were to adhere to each product—the market would become more responsive to our collective human desires.

Not everyone responds to the information in the same way, of course. If information on child labor were universally available for all products, some shoppers would reject goods made with child labor and others would ignore the information. Some shoppers would, no doubt, seek out such products, perhaps on the notion that by purchasing them they would be helping to support an impoverished family somewhere in the world. But whatever the choices made, the availability of the information permits participants in the market to respond as they see fit. As a result, the market not only becomes more efficient, it becomes a more complete and accurate reflection of the things that people actually want.

Thus, making the world a bit “better” is, at least in part, a matter of articulating human desires. A better market and better information are inextricably linked to one another, and both are tied to the things we want for ourselves and for the communities we live in, whether local, regional, or global. Defining our human desires will help in identifying the type of information the market needs to operate in peak fashion. Improving the information in the market will help us crystallize what our collective desires really are.

How to bring the right sort of information forward is the big challenge. Human beings are nothing if not diverse; there is no single list of the things people care about that covers all desires or that manages to give the right “weight” to how significant a specific desire may be. And humans are complex, so that any list of “things people desire” would grow very long very quickly. Isolating BGH, child labor, and deforestation as topics for which people have certain desired outcomes is well and good, but the isolated focus sidesteps hundreds of other topics of concern. Perhaps the most significant problem is that the people who bring goods forward in the global market aren’t necessarily forthcoming, particularly with information that may seem less than flattering or that might be taken as being at odds with the values held by large segments of the population. If Dupreshi fired the underage employee whose arm was mangled by a packaging machine, it has no interest in making that information public.

The sustainability page for Dupreshi’s products would be the vehicle for bringing such information forward.

Dupreshi’s motivation for providing the information is clear: It wants to sell to Walmart, and Walmart—at least in our example—requires it. But why would Walmart or any other purchaser want to create a system for collecting and disseminating product-specific information on sustainability along the lines we have described?

Almost all large companies, particularly public-facing companies that interact directly with end consumers, are now grappling with the question of what to do about societal values. A great deal of effort is already being directed toward sustainability in the form of corporate reporting, product certifications, third-party audits of the supply chain, sustainable philanthropy programs, revisions to product specifications and contracts, and development of new metrics for proactively identifying unacceptable situations and for reporting progress toward sustainability goals. Walmart does all these things, and so do many other corporations.

Companies embrace sustainability goals in response to a broad set of motivations, not the least of which is that corporate managers are human beings who want to do the right thing for their company and for the world at large. They also act in their own conventional self-interest, embracing sustainability as a means of protecting and enhancing their corporate reputation and as a way to let customers know that—in many senses of the word—the company is a safe place to do business.

The globalization of both commerce and information exchange has made it increasingly difficult to maintain such an aura of safety. It isn’t enough for Walmart’s stores to be safe, with the requisite security guards, sprinkler systems, and the like. Each product on Walmart’s shelves should have the same aura of safety. A child’s toy made with toxic heavy metals isn’t safe, nor is a collapsible stroller that can pinch a finger or a toe. But a sweatshirt sourced from an overseas firetrap of a factory is also not safe for its workers or for a shopper who will regret buying the sweatshirt at Walmart should Walmart’s connection to that factory ever become clear.

Merchants will pursue better, finer-grained, more reliable sustainability information to make things safer for customers, for workers, for communities, for the environment, and for the merchants’ bottom lines.

Really?

Is a five-star sustainability rating system really a workable concept? There are numerous reasons to suppose that it is not, particularly when it is envisioned along the largely unstructured lines we have described.

The main reason is one of information quality. Manufacturers posting their own sustainability information have every motivation to emphasize the positive features of their products and minimize (or omit entirely) mention of anything negative. Self-aggrandizing webpages amount to propaganda rather than useful/reliable information. Inviting anyone in the world to rank a product’s sustainability with one to five stars, or to post textual information about the product, provides additional opportunities for misinformation: paid commenters who post artificially inflated glowing reports and always give five-star feedback, product competitors doing just the opposite and deliberately criticizing a product without a valid reason, dissatisfied consumers who simply want to “badmouth” a company by downgrading its products, and commenters who post to the wrong site or about the wrong product or who are misinformed about a product’s sustainability attributes.

A reviewer of an early draft of this book worried that the problem of information quality was overwhelming, and that a sustainability rating system such as we are suggesting was unrealistic and probably unworkable. We have reason to feel much more hopeful, however.

Wherever rating systems exist, the prospects of gaming the system through faulty information exist. This may seem to be most true for the type of sustainability rating system we have written about—an open-ended system in which anyone and everyone can participate, no matter how well or how poorly informed they may be about the topic at hand. Despite the apparently fatal design flaw of a “crowdsourced” system, rating systems with such universal access exist and manage to function credibly.

We have mentioned one such system already: users’ reviews and star ratings at Amazon.com. It isn’t a naive system, with all users’ posts and all star ratings treated equally. By actively soliciting feedback from customers who have purchased a specific product, Amazon increases the frequency of posts from users who have actual experience with a purchased item. The use of “Was this review helpful to you?” voting allows the site to identify and highlight both the most valuable negative reviews and the most valuable positive reviews. The “Report abuse” link below each review gives both sellers and buyers an opportunity to flag inappropriate postings for further review (and possible removal) by Amazon. A “Questions and Answers” feature offers a means of soliciting more direct feedback on how well a product functions in the real world. A separate system for rating merchants and for rating individual products also adds to credibility; purchasing a product from a merchant that has received thousands of ratings (Amazon posts the number received) and has an overall rating of 4.8 stars lends a strong air of legitimacy to the business, as it would be extremely difficult to consistently “game” the system thousands of times over.

Amazon’s experience is worthy of note, as it is one of the world’s largest online merchants, but it isn’t the only model of a credible crowdsourced rating system. Rotten Tomatoes uses a star-based system for movies and separates the reviews of casual moviegoers from those of professional film critics. Users of the site can choose whether to trust the masses or to give more weight to the opinions of the critics. The e-commerce company eBay uses a somewhat different system than Amazon for rating products and merchants, but has also produced a system that potential customers find useful.

Credibility is possible even in the absence of star ratings and users’ comments. Twitter has become an important tool for journalists, particularly those trying to track real-time developments of fast-breaking news stories. Even though anyone can post anything to Twitter, journalists have shown themselves to be reasonably adept at sorting the wheat from the chaff, verifying their sources of fast-breaking information, and avoiding the embarrassment of passing along false Twitter posts as newsworthy items.2 One important (we’re tempted to say near-miraculous) source of information is the crowdsourced online encyclopedia called Wikipedia. Anyone with an inclination to do so can contribute to or edit that widely cited reference work. Against all expectations, Wikipedia produces content that is largely credible and appropriate to encyclopedia-style entries. There are lapses in quality, to be sure, but they aren’t so grave as to invalidate Wikipedia as one of the Internet’s most valuable, widely used reference tools.

The point we are making isn’t that any of the aforementioned systems can serve as a perfect model of a sustainability rating system for the world’s commercial goods. It is simply that crowdsourced systems that self-regulate and provide meaningful information are possible.

Even in a rating system that convincingly provides reliable and credible information about products’ sustainability, a challenge to the system still remains: What sort of information, exactly? What constitutes “sustainability”? What information, on what topics, should be reported? As we noted earlier, it is certainly possible to prescribe required information elements in advance, much as requirements for reporting taxes or filing a corporate annual report are specified in great detail. But we are partial to self-organizing systems, and again we point to Wikipedia as a quasi-model. There is no master list of encyclopedia entries to be written. Either the collective participants opt to create a Wikipedia entry for someone or something or they don’t. Some articles have great depth; others are deemed “stubs”—essentially placeholders for topics of potential interest that are waiting for additional user-supplied information. The focus for sustainability attributes can be similarly crowdsourced, along with particular data elements and reporting criteria for each attribute.

Ultimately, tackling the issues of credible definition (about what sustainability means) and credible content (about how products promote sustainability) requires some sort of—for want of a better term—policing mechanism. Some entity is needed to decide that some information stays, some gets deleted, some remains obscure, and some rises to prominence, and that one product warrants five stars but another product only two. The entity could be the corporation managing the sustainability website—Walmart, in our hypothetical example. It could be a government agency acting in some sort of regulatory capacity. It could be a cadre of elite experts with deep knowledge and experience in matters of sustainability. Or it could, as we have suggested, be the largest “entity” of all: everyone. The same entity that makes Wikipedia work, that populates Amazon and Rotten Tomatoes, and elects parliamentarians and presidents can also drive the sustainability system forward in a workable fashion.

Impact

Information doesn’t have to be seen to bring about changes. The simple possibility that it might be seen can be potent. A manufacturer creating a sustainability page (or more likely, multiple sustainability pages) for its product line will engage in a type of “what if” exercise to attempt to anticipate the reactions of market participants all along the supply chain—bulk buyers, shippers, local communities, workers, advertisers, and consumers—in the event that they visit a product’s sustainability page. The anticipation alone can be a compelling influence on behavior, even if it turns out that the website is never viewed, just as the possibility of an income tax audit can influence the taxpayer’s behavior even if an audit never actually occurs.

The precise nature of the changes that might be made in response to postings to a sustainability page aren’t knowable in advance. A manufacturer might certainly change its production process or the safety procedures in its factory in order to be able to make honest statements about a lowered global-warming impact or enhanced safety measures associated with its product. Or it might engage in various kinds of subterfuge, from greenwashing ploys (in which the only thing that changes is the language) to outright lies, in order to make a product appear to be more favorable to sustainability than it actually is. Or it might decide to do nothing and let the chips fall where they may.

Whatever preliminary, anticipatory decisions are made, the process of bringing about change in the marketplace has only begun. Some sustainability pages will get visits, and it’s a safe prediction that some will receive thousands or even millions of views over time. The views serve as a spotlight (the world is paying a good deal of attention to this particular product) and as a metric (product X is getting 10 times the attention of product Y). The sites provide feedback, identify societal concerns, and act as a gauge of collective comfort, or lack thereof, with the particular product.

The technology needed to host and manage millions of sustainability pages is nothing out of the ordinary. The challenging part of creating this is institutional: who participates in such an undertaking, who decides what information to provide, who provides information, and who manages the whole thing? And there are important “why” questions as well: Why would anyone what to participate in creating sustainability pages for any and all products?

We hope that the presentation thus far has been interesting enough to spark some ongoing attention to the desirability of moving forward and broadly improving the quality of information, especially sustainability information, available in the global market. Ultimately, it will be public discussion of these questions that provides the actual answers. However, there are steps that can be taken by some of the larger players in the market—steps they could take more or less unilaterally—that could jumpstart the entire process.

A small number of entities are so large a presence in the global market that their purchasing decisions are enough to influence the decisions of millions of businesses around the world.

Walmart sells almost half a trillion dollars worth of goods a year through 11,500 stores operating in 28 countries (as of 2015). By many measures, it is the largest company in the world. It already operates large and complex websites featuring thousands of products. Despite their size and complexity, those sites function quickly and smoothly, providing shoppers substantial amounts of information that can help them to make informed purchases. Walmart could readily add a link on each product page leading to a related page with sustainability information for the product. But before that could be done, the pages would have to be filled with relevant sustainability information from the products’ manufacturers, arranged in whatever format Walmart might put forward. There are numerous approaches that Walmart could take to making this happen. We offered up a hybrid approach as a hypothetical example, but there are many variations on how such a scheme might work. Here are a few possibilities:

The US government buys about as much commercial goods as Walmart sells. Federal procurement amounts to about $500 billion per year. The government could take measures similar to those described above for Walmart, asking or requiring suppliers to submit sustainability information in order to be eligible for government procurement or to receive some sort of preferred procurement status. The government isn’t as light on its feet as a private company in its ability to implement a PSIP system, but it certainly has the appropriate weight and influence as the largest buyer of goods in the world.

Amazon.com, though not (yet) quite the behemoth that Walmart is, is still the most influential online merchant and has pioneered many interactive methods of reviewing, commenting, and ranking that would be useful in the sustainability context. It would be interesting to have Amazon offer a link on each product page to sustainability information that manufacturers could optionally provide (though requiring some sort of information submission is certainly a possibility). The many merchants that operate through the Amazon site could also be given tools to help them work with their suppliers, with the aim of creating similar information pages. Other large online merchants, such as the Japanese firm Rakuten (owner of Buy.com and other sites) and Taobao.com (an Alibaba Web property that is considered the Chinese equivalent of Amazon), could take similar unilateral actions.

An entity needn’t be a global purchasing giant to exercise substantial influence on the market. In the US, individual states spend billions on procurement, and they could introduce a provision similar to that suggested above for the federal government. Well-known merchants could do the same—CVS, Walgreens, Safeway, or Target in the United States, Tesco, Carrefour and similarly positioned mega-retailers in other countries. Merchandisers with substantial audiences—the National Football League, FIFA, the Olympics—could similarly take measures on their own to implement a sustainability information system. The United Nations, though not involved in procurement on the scale of other entities, could nevertheless introduce a system that could have a substantial symbolic presence.

Sustainability information brings the marketplace several important steps closer to the economists’ ideal state of affairs: complete information, perfectly accessible to all. Building a mechanism to incorporate information about human values serves to redefine the notion of economic value. We can recast Adam Smith’s well-known quote on self-interest this way: It is not from the benevolence of the butcher, the brewer, and the baker that they no longer rely on child labor, but from their regard to their own interest.

Notes