Category Archives: CSR
Chief Sustainability Officer: USA Edition
A version of the graphic below has been making the rounds on LinkedIn for a few months (and the doctor wishes he could point to the original source of this [on LinkedIn], but either Google mis-indexed it [as the link goes to a user’s profile page] or it’s gone), and a more recent version can be found in this post.
These are great … if you are based in the EU. However, they are not so great if you are based in the USA, as outlined in our first quarter post on how in the corporate world, sustainability/ESG is NOT a priority. So, the doctor decided to correct it for you if you are based in the USA. Enjoy!
(Supplier) Diversity is Dead!
Editor’s Note: This is an extended version of a comment that was made in response to an inquiry by THE REVELATOR on LinkedIn about the progression of supplier diversity.
The simple fact of the matter is thus: diversity threatens fascists who want authoritarian dictatorships. This means that as long as far right wing agenda politicians keep getting elected in first world countries (which has been happening more than not over the last decade), not only is DEI (Diversity, Equity, and Inclusion) not going anywhere, but it is going to be rolled back, and done so faster than most policies that came before in countries which equated diversity progress with measurable outcomes.
The sad reality of the situation is that as soon as the board/chief/president of an organization or governmental department concluded that you were not diverse if you did not have x% of whatever minority the board/chief/president thought you should have x% of by time y, and started equating diversity success with measurable outcomes, we went from a situation where “equal opportunity” was replaced with “minority designated role”. And instead of being a further step in the right direction, it was often a step backwards. Under equal opportunity, if two candidates were roughly equal for a role, the role is to go to the minority candidate. And that’s a good thing. However, under “minority designated role”, non-minorities are banned from consideration, and this is not a good thing if there are no qualified minority candidates available for the role. A senior role that should demand a full University degree (Bachelor’s or higher), a decade of experience, and one or more certifications may end up going to someone who just has a 2 year associates degree, only 3 years of work experience (barely relevant to the role), and no certifications as that is the most qualified person who applied.
What many firms fail to take into account when considering diversity mandates is the number of qualified candidates in the minority who are actually in the vicinity of, and who are then actually interested in, and willing to take on, the position. For example, if you were to demand that half of your coding team need to be women, good luck with that when only 25% of STEM graduates in North America are female. (So if you did get 50%, a lot of other companies wouldn’t get any female hires.) Or if you demand that 1/5th of your workforce be hispanic, to mirror the US population distribution, but it’s an in office job in a major city in an expensive neighbourhood where 95% of the local population is white, good luck with that. You might meet your quota, but you know that the vast majority are not going to be qualified for the role.
And DEI didn’t stop there at some organizations and institutions in North America. As soon as people figured out that a DEI program or a particular minority designation could be used to exclude people of certain religion(s) they didn’t like, it went from a tool of inclusion to a tool of subversive discrimination. (So much for equity and inclusion!) Then came the backlash; the labelling of anything even remotely related to DEI, equal opportunity, or humanity as woke; and a full on assault by the fascists and authoritarians.
More specifically, in countries where they have enough power in the government, the authoritarians are dismantling any and all programs they have control over, barring any third party organizations with such policies from doing business with their government, and doing whatever they can to overturn all DEI and Equal Opportunity legislation they can, as far back as they can.
Moreover, given that these far right wing parties are being well funded by donations from the tech bros who spend more time meddling in global politics than running their own ventures, there are not many options for progression of ANY diversity on the global stage.
Sustainability ONLY Exists In the Supply Chain
Furthermore, simply switching suppliers does not make you more sustainable no matter what you may think or what those overpriced third party ESG / Scope 3 reports may (or may not) say. Switching suppliers to a supplier approximated to be more sustainable is not increasing sustainability, because if you take someone else’s supplier, then they are just going to end up with yours. It may be a temporary net win for your company, but it’s a net loss for another company, and that doesn’t really help anyone as sustainability was not actually increased overall.
Sustainability only comes from net improvement. The reason it only comes from the supply chain is because the products you buy come from the supply chain. The energy you use comes from the supply chain. The water you use (and drink) comes from the supply chain. The services come from your partners (in the supply chain). The transport to you (and/or to your customers) is the supply chain. Everything comes from the supply chain. The only way you can increase your sustainability is to reduce the energy, water, and products you use and the travel you undertake. For most companies, this is a negligible part of the supply chain … sometimes so negligible it rounds to zero.
So how do you increase sustainability in your supply chain? You start by helping your suppliers be more sustainable, which, believe it or not, starts with you being a better buyer and a better partner. Sustainability requires investment, and when they are operating at slimmer margins than you, significantly smaller bank accounts than you, and a lot more uncertainty than you, it can be hard for them to invest in new technology or processes when they don’t even know if they can invest in next week’s payroll.
And it requires more than a piece of paper from you saying you’re going to award them two years of business after a multi-round RFP when you’re a first time buyer. Because they know that while you may have the wherewithal to enforce a contract in another country half a world away, they often don’t. And they know how many times they’ve been screwed in the past when they were told they’d get 100,000 units, but COVID hit, the market crashed, or the transport lanes (ports, borders, etc.) closed down and the orders never came.
You need to develop a true partnership, work with them, build up shared trust and commitment, stick to your promises, help them with their processes so they become more efficient, identify efforts they can make to significantly increase sustainability, and then make the long term commitment they need from you (and other major customers) to invest in better technology, build their own renewable energy grids, etc.
Why are we bringing this up? Because a recent article in VOGUE Business that asked if fashion’s buying practices are really improving had a very good point. While fashion brands make strong claims they are investing in longer-term strategic partnerships, and big consultancies like McKinsey quote impressive statistics (such as an increase from 26% to 43% over the last 4 years) on how the percentage of CPOs reporting longer-term strategic partnerships (which just translates into longer term contracts, but not necessarily guaranteed awards over the long term, as there are usually so many out clauses the contracts mean nothing), the reality is that when you ask the suppliers how things are going, it’s a completely different story. As the Vogue Business article point out, this year’s Better Buying Partnership Index saw just a one point increase in the garment industry’s buyer-supplier partnerships score. Just one point! That could be a rounding error.
Despite all the lip service, there has been no improvement in the fashion supply chain because, at the end of the day, as Lindsay Wright was quoted, simply claiming you have good partnerships with your suppliers isn’t going to cut it. If you want an honest picture of what’s really happening on the ground, you need to be asking suppliers, because they’re the only real arbiters of whether purchasing practices are improving.
And this holds true across supply chains. Partner with your suppliers on long term contracts and work on development initiatives with them if you want to increase sustainability. Otherwise, the best thing you can do is to just shut the f*ck up because you’re only contributing to the hot air.
Open Gen-AI Isn’t Just Dumbing Your Business, It’s Killing the Planet!
Open Gen-AI is not just one of the most dangerous technologies we’ve ever invented* (as it lulls the uninformed into a false sense of security who will depend on it to make increasingly more critical decisions that could have increasingly more disastrous consequences), it’s also about to pose the biggest threat to planetary survival!
As it is, an average Data Center requires at least 10X the energy consumption of an average American home per square meter, with Open Gen AI data centers (which require ultra dense servers with cores running flat out all the time) requiring even more energy than that. However, whereas traditional AI models, including traditional Deep Learning Neural Nets which can be optimized post-training to often 10% of their original size using techniques developed by MIT researchers (including those described in this article) are now smaller and more stable than they used to be, these models just keep expanding exponentially in a futile quest to have them do more and now require models thousands of times bigger (and more energy intensive) than traditional models, often to generate output that wouldn’t even net a C grade in a high school class!
Think about that and read this article by Kate Crawford on Nature on how AI’s environmental costs are soaring (which notes that even OpenAI’s CEO has finally admitted that the AI industry is heading towards an energy crisis as there just isn’t enough power to keep up with the exponential energy demands [with ChatGPT already requiring more power than 33,000 average American homes … think about that, if you shut down just TWO Open Gen-AI models, you could power an entire small city]) before needlessly throwing a solution you don’t understand at a problem you don’t even have (when a better process would eliminate that problem and replace it with a smaller, different, problem that traditional technology and a human with just a bit of training could completely solve).
Because Open Gen-AI is just NOT ready for prime time, and just because these companies raised Billions of dollars on false promises that it would be ready years or decades sooner than AI development has traditionally taken, that doesn’t make it our responsibility to adopt the technology before it’s ready.
* And if a man afraid of nothing acknowledges this, we really should listen! (See this article.)