Daily Archives: January 30, 2008

Sustainability: The Final Stretch

Over on Spend Matters, Jason Busch points out that the market, and not regulation, is the reason sustainability wins. He points out that maybe we should review Malcom Gladwell’s The Tipping Point to better understand how trends become standard practice. He notes that sustainability in the supply chain is on the verge of reaching the tipping point, and this is partly because the message has reached a much broader audience than just procurement and operations practitioners. He also talks about Wal-Mart’s efforts, their recent press release, and how Wal-Mart’s President and CEO is almost missionary in his call to sustainable action. Furthermore, he posits that this evangelical commitment to sustainablility is a step in the right direction which Wal-Mart’s competitors will be forced to emulate.

Chris Jacob Abraham gave us his follow up to a brief background on sustainability issues over on @ Supply Chain Management. He notes that the crucial, unstated, assumption in most sustainability definitions is technological stasis, which is an idea that shouldn’t be sustained. It, in fact, points to a deeper issue with the very language of sustainable development – that most proponents of sustainability miss out on the fundamental nature of technology. The definitions of resource and pollutant are based upon today’s technology.

Chris argues that there are two broad-stroke problems that sustainable development should address: the Malthusian problem and the Climate-Change problem. At a simplistic level, Malthus’ believes that the constantly subsisting cause of periodical misery has existed ever since we have had histories of mankind, does not exist at present, and will forever continue to exist, unless some decided change takes place in the physical constitution of our nature. Taking the logic to its conclusion, the basic argument is that we’re living (far) beyond our means. Without innovation, we most likely are – but can we innovate our way out of the problems we create. The Climate Change problem basically boils down to Global Warming, which binds the synapses of anyone who dives into it.

Dave M offered us his third post by tackling a model of sustainable sourcing transparency over on Buyer Analytics. He says that to learn more about ethical sourcing, we need look no further than Mountain Equipment Coop, which takes corporate transparency to a whole new level. MEC fully discloses non-compliance in its supply chain. It reports material issues and openly discusses the dilemmas the company faces when it comes to ethical sourcing. It publishes an annual sourcing report with positive and negative information. It realizes the foundations of the solution to any problem, including sustainability, are truth and open discussion.

On MEC’s Ethical Sourcing blog, Harvey Chan tackles pollution, social ills, and the developing world. In the article he notes that, according to the United Nations Environment Program, Canada, on a per capita basis, produces five times more carbon dioxide than a communist apparatchik in China or an impoverished farmer in Sri Lanka, which is not all that “progressive”. The only thing us Canadians can be proud about is that we’re still slightly ahead of our southern neighbors, who produce 2.3% more equivalent global carbon dioxide emissions. He also points out that paying disposal taxes when we buy a product is brilliant because we consumers are price sensitive and making pollution costly will force us to think about our choices. This indicates that the big challenge facing government is finding similar policy instruments to reduce industry driven carbon dioxide emissions and that carbon taxes on corporations is the next logical step.

It’s Not Easy Being Green

Sustainability may be more … much more … than being green, but that doesn’t mean one should ignore the great article that recently popped up over on Chief Executive.

The article essentially starts off by noting that while CEOs would argue that global warming is a legitimate universal problem to be solved, they may not be as clear on which of the dizzying array of green products, strategies and promises are, in fact, about sustainability. What impact will a “green” strategy have on the environment? shareholder value? corporate finances? and how do you know if the strategy is “green“? A CEO can’t just do what she believes is right – because it’s not the company’s money, it’s the shareholder’s money. She has to balance on what is currently a tightrope walk between fiduciary responsibility and environmental correctness. She has to find the “zen of being green” – the sweet spot – that represents a decision that is good for the environment, the company, and thus the shareholders.

The article then notes that a good place to start is with conservation strategies. For example, with today’s skyrocketing energy costs, energy conservation will save your company big bucks. Waste reduction in manufacturing will allow you to produce more with less. Paper reduction will also save big – in cost and in environmental impact. And efficiency will provide cost savings all around.

Now it’s true that not every cost-efficient strategy will be environmentally friendly, just like not every environmentally friendly strategy will be cost-efficient, but since companies are going to pay one way or the other – either today by adopting more environmentally friendly practices across the board or tomorrow when they are regulated, fined, or both – companies need to start taking environmental sustainability and green seriously today. Besides, as adoption of new practices and environmentally friendly materials grows, economies of scale will eventually kick in.

The article also notes that not only do consumers expect companies to make money and profit from the sustainability work they do but that they are starting to realize that if it’s not financially sustainable, it’s not going to be environmentally sustainable. This is good news. You can’t save the whales if you can’t save yourself. (And, if you’re truly innovative, there’s no good reason why you should not be able to do both!)

The article also includes a short check-list of five things to consider while developing your earth-friendly strategy.

  • Don’t Fudge!
    If you’re behind the green curve, and your customers are noticing, don’t rush out with a half-baked scheme – otherwise, you’re likely to be labeled as a “greenwasher” or a “green-lite” organization, and will earn the scorn of the watchdogs and consumers you were hoping to impress.
  • Pick the Low-Hanging Fruit.
    Start small and wring out energy costs, for example. Gain knowledge, save money, and keep investors calm before going for the big win.
  • Partner Wisely.
    Work with organizations that have proven success rates that will work with you, not just the first nonprofit that calls. The local non-profit might have great passion for the environment, but if they’ve never worked with an organization of your size before …
  • Show Your Work.
    The best defense against a “greenwashing” label is transparency. Be sure to tell your story in a metrics-driven, fact-based manner.
  • Get the Word Out.
    Once you have an authentic, successful green strategy, advertise.