Corporate Social Responsibility & Sustainability- Their Place in a Green Supply Chain

3 Sep

As we here in the U.S. head into Labor Day weekend, a few news items caught my attention this week.  Each of these moves by large consumer and retail brands call to mind that there is a social side of the supply chain that adds organizational value and enhances brand reputation.  This has been made more evident recently by all the discussion regarding efforts to change U.S law to squeeze ‘conflict minerals’ associated with manufacturing of cell phones, batteries and other electronics (http://bit.ly/aaae1V)

Yesterday an article in Triple Pundit (The Most Important Assets are not on the Balance Sheet http://bit.ly/9fDfd5), noted that there are several “intangible” assets that create organizational value.  Each of these “assets” clearly can (and should in my opinion) extend up and down the supply chain.  First and foremost, a company’s primary assets are its employees. The article makes a valid point that employees are “the secret in the sauce and the glue that holds the corporation together”. Without employees to produce the goods, ensure product quality, move those goods efficiently and respond to customers, other company “assets” hold little value beyond their resell potential.  Next, a company’s reputation is its most important asset, particularly if the corporation publicly declares commitment to the triple-bottom-line. As reported by Jeffrey Hollender earlier this year, Fortune Magazine has estimated that a company’s reputation represents 75% of the total value of an average business. Finally, company mission provides the long term direction on what tangible assets to acquire, align with and where to divest. It’s said that the mission is the “organization’s compass and the written articulation of corporate soul”. The article argues the importance of corporate social responsibility (CSR) as a key intangible that can affect corporate success and bottom line performance.

In a similar vein, several companies stepped into the spotlight this week to shine the importance of social and environmental responsibility along the supply chain.

First, Nestle, the world’s biggest food group, announced late last week it would invest $487 million in coffee projects by 2020 to help the company optimize its supply chain http://bit.ly/dhDhGY.  Part of this plan includes the “Beyond the Cup” Nescafe Plan (http://bit.ly/9TnCIs): distributing 220 million high-yield, disease-resistant coffee plantlets to farmers by 2020, expanding technical assistance and buying directly from growers.  The company announced its plans to double the amount of Nescafe coffee bought directly from farmers and their associations.  All of the directly purchased green coffee will meet the company’s “4C” sustainability standards by 2015, with the support of the Rainforest Alliance and the 4C Association. The Rainforest Alliance is a nongovernmental organization that certifies farms for meeting sustainability criteria. The 4C Association, registered in Geneva, works towards sustainability in the coffee sector with a code of conduct and a verification system.   Over 90,000 tons of Nescafe coffee will be sourced under the principles of the Rainforest Alliance and the Sustainable Agriculture Network, a coalition of conservation groups, by 2020, the company said.   With apologies to Maxwell House and Kraft Foods, now that’s coffee that is “good to the last drop”!

In an upstream supply chain twist, Corporate Express/Australia has recently announced two major initiatives designed to encourage and assist businesses to become more environmentally and socially sustainable (http://bit.ly/bMB0U8).  The company has produced the “Go Green Guide” – for a Greener Workspace” and is focused on adopting sustainable procurement practices. The 100% recyclable Go Green Guide features:

  • Over 1500 environmentally preferable products across all lines of business;
  • Facts and figures demonstrating the effect all businesses can have on the environment by using environmentally preferable products;
  • Explanations of certification labels to help businesses make environmentally conscious purchasing decisions;
  • An action plan that provides businesses with easy steps on how to start their journey towards creating a greener workspace.

Finally, Unilever has come up with a new tool designed to help reduce greenhouse gas emissions in its supply chain. http://bit.ly/aLZ9wF.  The company has developed The Cool Farm Tool.  The tool enables both supply chain managers and individual farmers to input data they have access to in their daily jobs, and uses this to calculate their total greenhouse gas emissions from fields, inputs, land use and land use change, it said.  “Farmers are then able to see the effect that making small actionable changes to their agricultural methods will have on their overall carbon emissions (such as using a different fertilizer, for example).”

Each of these examples underscores the “whole systems” approach that I’ve previously written about in this space and that underscore transparency and collaboration the “value” in the supply chain.  Each company recognizes that to be a truly sustainable organization, it must reach deep beyond its four walls to its suppliers and customers.

What is your company doing to engage it’s supply chain to enhance corporate social responsibility and implement environmentally responsible product stewardship- along the entire supply chain?  Happy Labor Day, everyone.

This post was originally published on my New Green Supply Chain Blog, which can be found at https://community.kinaxis.com/people/DRMeyer/blog

One Response to “Corporate Social Responsibility & Sustainability- Their Place in a Green Supply Chain”

  1. Henk Hadders September 8, 2010 at 3:52 pm #

    Hi Dave,

    It was the beginning and the end of your post, that triggered this reaction (as promised) with two remarks. Although you are focused on supply chain issues, your article left me somewhat puzzled at the organizational level.In the beginning you mention two notions “corporate social responsibility (CSR)” and “corporate sustainability management (CSM)”. Are both the same, or is there a difference ? I see them as two separate notions, where the concepts you used -like TBL performance , social and ecological sustainability (footprints), assets or vital capitals, internal and external stakeholders- all relate to CSM.

    At the end you mention the importance of a “whole systems” approach (or thinking in part/wholes), and I completely agree with this. I also agree that companies have duties and obligations (and responsibilities) not only to internal stakeholders (employees), but also to their external ones (suppliers, costumers) to produce value needed for their own well-being. But what is a “truly sustainable” organization, what does it look like? How does one operationalize such a concept and how does one measure “true” Triple Bottom Line outcomes, related to its context or environment ?

    Henk Hadders

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: