Sustainability in the Supply Chain

The latest study from Green Research identifies the trends, tools and best practices at the next frontier in corporate sustainability: the supply chain. The study found that a lack of data standards and concerns about data reliability have hindered supply chain sustainability progress. Sixty-two percent of executives surveyed for the study said their efforts to track supply chain sustainability performance are impaired by a lack of measurement standards. The study advises firms to support industry and cross-industry groups that are working to develop supply chain sustainability standards. An important recent development in this area is the release by the Sustainable Apparel Coalition of its “Higg Index,” a standard measure of environmental performance at the product and facility level for the apparel and footwear industries.  The Higg Index should dramatically improve communication about performance and sustainability goals throughout apparel supply chains, leading to sustainability improvements over time. The report notes efforts with similar goals in other industries.

Just a few years ago many companies avoided taking responsibility for the environmental performance of their supply chains, often on the grounds that they had little influence over this aspect of supplier performance. But attitudes are shifting: Sixty-four percent of senior sustainability executives feel their companies can have significant influence on their top suppliers’ sustainability performance, and eighty-four percent consider it likely that their companies can obtain much better environmental performance from suppliers without compromising their companies’ business goals.

Sustainability improvements sometimes depend on advances in technology — such as renewable energy systems or mechanical or electrical systems with advanced, resource-efficient designs. But often they depend on advances in management practice. The research identified ten supply chain sustainability best practices followed by one or more of the dozens of companies discussed in the report. These include educating and motivating suppliers, setting goals, using scorecards, and enlisting buyers and sourcing managers as front-line representatives of a company’s sustainability strategy.

The research revealed that effective management of sustainability data is critically important for companies aiming to drive supply chain sustainability improvements. A vibrant collection of vendors is offering software tools and web-based systems to help companies track, analyze and manage this data. The report provides capsule profiles of a dozen vendor offerings along with a vendor selection framework prospective buyers of the tools can use to help select one appropriate to their needs. For more information about the research, please visit greenresearch.com.

Other Studies Featured This Month

Towards Zero-Impact Growth

Consultancy Deloitte teamed up with sustainability visionary John Elkington to help make Elkington’s vision of a zero-impact growth economy more accessible to major corporations. The team developed a scoring system to plot companies along Elkington’s “pathway to zero,” the five stages from recognizing the opportunity of a zero-impact growth strategy to fully embracing one. Of 65 companies studied, none had yet reached the final stage but according to the analysis, six companies — Puma, Natura, Nestlé, Nike, and Ricoh and Unilever — have arrived at the fourth stage. Among a range of findings, the study identified several best practices, including taking a holistic approach to sustainability, exemplified by Unilever and its Sustainable Living Plan; acting collaboratively, exemplified by a group of competing apparel manufacturers that have jointly committed to eliminating the discharge of hazardous chemicals (and, I would add, the work of the Sustainable Apparel Coalition); and internalizing externalities, exemplified by Puma, which released the first environmental profit and loss statement.

You can find the full paper here.

Six in Ten Consumers Globally Think Green Products Cost Too Much

Market researcher GfK has released its third annual global study of consumer environmental attitudes and behaviors. The study is based on a survey of 35,000 consumers in 25 countries across North and South America, Europe, Asia and Africa. According to the new research, the proportion of consumers whose purchase decisions include a consideration of environmental protection grew 6 percentage points in China and 5 points in Brazil, compared to 2011. Mexico and South Africa also recorded significant increases in the past year, the study found. Sixty percent of consumers globally feel environmentally friendly products are too expensive — twice the percentage of those who see a green lifestyle as a “status indicator.” More information here.

Article written by David Shatsky, President, Green Research for Sustainable Life Media – August 22, 2012

Category: Research | No comments yet


Leave a Reply

Your email address will not be published. Required fields are marked *