Tag Archives: organization

Green Supply Chain Gets a Boost from ULE 880- Draft Sustainability Standard for Manufacturing Organizations

14 Sep

Today marked the end of the initial 45 day comment period for ULE 880 – Sustainability for Manufacturing Organizations. [NOTE: the comment period has been extended until September 21st]. This draft sustainability standard is the culmination of a partnership between UL Environment (ULE), a division of Underwriters Laboratories, and Greener World Media.  The standard for businesses and other organizations, focusing on their environmental and social performance, was designed “to create uniform and global metrics for customers, stakeholders and trading partners”, essentially ‘harmonizing’  the wide variety of standards, guidelines and specifications for driving sustainability in organizations.

According to the draft document preface, “Our vision is to create a uniform, globally applicable system for rating and certifying companies of all sizes and sectors on a spectrum of environmental and social performance characteristics. ULE 880 will fill a major void in being able to consistently understand and measure how, and how well, a company is doing in understanding, addressing, and communicating its environmental and social impacts. It will also provide a standardized mechanism that allows organizations and their stakeholders to factor companies’ environmental and social performance into their core decision-making processes, thereby elevating the importance of these issues within companies.”

At its core, ULE  880 is designed principally as a procurement tool, allowing companies,  public agencies, and institutional buyers to assess the performance of  their supply chains and trading partners. It is intended to complement  existing and future product procurement specifications throughout many layers of an organizations supply chain.

ULE 880 covers five domains of sustainability:

  • Sustainability Governance: how an organization leads and manages itself in relation to its stakeholders, including its employees, investors, regulatory authorities, customers, and the communities in which it operates
  • Environment: an organization’s environmental footprint across its policies, operations, products and services, including its resource use and emissions
  • Workplace: issues related to employee working conditions, organization culture, and effectiveness
  • Customers and Suppliers: issues related to an organization’s policies and practices on product safety, quality, pricing, and marketing as well as its supply chain policies and practices
  • Social and Community Engagement: an organization’s impacts on its community in the areas of social equity, ethical conduct, and human rights

The 60-plus page draft standard contains 102 questions (or “indicators”), including 18 in Governance, 45 in Environment, 15 in Workforce, 15 in Customers and Suppliers, and 9 in Social and Community Engagement. Each of the indicators has certain “weightings” and not all of them equally distributed.  The Environment, for instance covers 80 points, Governance and Customers/Suppliers 40 points each, and Workplace and Social/Community 20 points each. In addition, there are also 18 “Innovation Points” — 3 points each for 6 different indicators — that reward companies for going above and beyond the standard.

Sustainable Supply Chain Elements

Direct sustainable supply chain elements mentioned in Section 6.5.3 of the standard include requirements and related point allocations for:

  • Supply Chain Policy
  • Tier 1 and Tier 2 Supply Chain Inventory (why not Tier 3 or Tier 4?)
  • Supply Chain Monitoring and Assessment (not a great deal of detail in this element)
  • Supply Chain Reporting

Also, like other elements of the proposed standard, ‘Innovation Points’ are allocated for Training and Targeted Continual Improvement Metrics.  In addition to this specific clause of the standard, there are specific elements associated with Environmentally Preferable Purchasing and ‘greener’, more efficient transportation planning and logistics…all of which represent vital parts of the sustainable supply chain.

The ULE 880 standard offers promise to take sustainability to a whole new level e.g. organization based certification, and acknowledges that supply chain considerations are vital to a ‘sustainability-focused’ organization.  The next step for the standard will be a peer-reviewed response to the more than 600 commenters from over 30 countries that have requested and reviewed the document to date.  In coming phases, a small set of manufacturers will be engaged to pilot  the standard and the verification/certification delivery model, prior to wider release and market implementation. Stay tuned!

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

Shades of Green…Getting the Most from Your Sustainability Initiatives

13 Apr

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Are you “dark green” or are you “light green”…or are you a trendy “blue thinker” (having abandoned the “green” mantra as not deep enough)?  Well, two articles caught my eye this morning, both located on a very trustworthy e-zine, the Environmental Leader.  The first discussed how corporate marketers expect their companies to increase environmental sustainability initiatives over the next two to three years.

(http://www.environmentalleader.com/2009/04/10/survey-corporate-marketers-foresee-greater-investments-in-sustainability)

The second article was by Deloitte’s Peter Capozucca, who cited a 2008 study by the Economist Intelligence Unit, that stated that companies that embrace sustainability have achieved the highest share price growth over the past three years whereas companies with the worst performance focused less on sustainability (http://www.environmentalleader.com/2009/04/10/avoiding-pitfalls-on-the-sustainability-path-to-shareholder-value/)

What struck me in these two wildly divergent articles (and which seems to be a perennial challenge among both public and private organizations) is the principal motivation is behind companies drive to implement sustainable business practices.   Is the motivation driven by market barriers, new regulations, risk management thresholds, competition, globalization of goods and services, supply chain, cost containment, profit, or more altruistic reasons?   According to the Fleishmann-Hillard led marketing study:

“…three-quarters believe that corporate reputation, corporate culture and technological advancements will be the drivers for sustainability. The Obama administration’s policies also will drive the adoption of corporate sustainability programs, according to 63 percent of respondents. “

Whatever the reason it is clear, as I am discovering here in the Northwest, that sustainability and all that it offers organizations is becoming more prevalent in today’s society.  One size does not fit all when it comes to defining sustainability.  To truly be effective, an initiative must create positive change in fundamental organizational behavior, both within, upstream and downstream of the organizational walls.  This change must provide long term, measurable and meaningful value.

And despite the fact that the economic slowdown has dampened the speed at which organizations are implementing sustainable practices, organizations are finally “getting it”. A few key pointers as you head down the sustainability path:

  • Know your driver
  • Develop a compelling, clear vision of sustainability
  • Identify critical sustainability issues
  • Select areas of focus- look outside the “four walls”
  • Develop and adopt goals and measurable performance indicators
  • Reflect sustainability throughout all phases of organizational development, planning and implementation processes and decisions
  • Build a network of internal sustainability champions
  • Strengthen relationships with key external sustainability partners

Don’t wait to unlock organizational value. Position yourselves now so that you can emerge as a leader within your business sector through:

  • Optimizing the linkage between sustainability, environmental and business objectives;
  • Creating a performance measurement system that demonstrates bottom line results;
  • Identifying marketplace trends that reward innovation toward sustainability; and
  • Building assurance systems for compliance and credible stakeholder engagement.