If it can be measured, it can be managed. So the age-old management maxim goes. The danger lies in becoming careless with anything that cannot be quantified.
Supply chain sustainability is one area that has suffered due to its lack of metrics. While carbon footprint calculators are readily available, it seems that this metric has caused tunnel vision within many supply chains. It’s not that a carbon footprint isn’t important: it’s simply that supply chains must also consider other aspects if they want to be green, inside and out.
Understanding the Carbon Footprint
The carbon footprint of an activity essentially refers to the quantity of carbon that the activity is emitting. The carbon footprint of human beings globally has been multiplied by 11 since 1961. As a metric, its current trajectory shows that the planet will soon find itself in an ‘overshoot’ situation, with humanity trying to live beyond the means of the Earth. However, it is also part of a larger ecological footprint that also includes items like the impact on food and land resources. This ecological footprint shows that the Earth’s biological capacity is already being exceeded.
The Example of Verizon
Nevertheless, carbon footprints together with energy conservation make a good place for a supply chain to start preparing for sustainability. Telecoms operator Verizon in the US has been putting a number of measures and incentives in place for these two factors since 2009. One was to require that new equipment should be a minimum of 20% more efficient in energy consumption than the kit it replaced. Another, to be reached by 2015, was to channel at least 40% of its supplier spending to firms active in reducing carbon emissions. With a base of over 140 million customers for its different services and the infrastructure to match, percentage goals like this can mean a considerable difference.
A Three Tier Model to Take Things Further
A year or so before Verizon started its initiatives above, trend consultants The Future Laboratory produced a three-tier model to position sustainability activities.
- The basic level comprises measures like switching lights and equipment off when not in use, recycling materials and using greener (or less) travel. This is where most businesses operate.
- The thinking level involves embedding sustainability behavior into supply chain operations so that it becomes automatic.
- The science level of sustainability is then the application of audits and benchmarks for quantifiable management of supply chain sustainability.
A Broad Perspective to Sustainability
On a worldwide scale, the ‘Global Compact’ of the United Nations is an initiative to encourage sustainable supply chain practices. It is coordinated with the activities in human rights, labor, environment, and anti-corruption. Other organizations also have their own models. As an example, the ‘sustainable supply chain vision’ of McDonald’s, the food services company, has three axes: ethics, environment, and economics. The latter includes affordable products, equitable trade, and having a positive impact on communities located where suppliers work.
Raking in the Green
As a number of businesses have found out, sustainability in supply chains is not incompatible with financial benefit. Indeed, Verizon’s initiatives were initially done with the aim of being good for its business, and then turned out to be good for sustainability as well. Other organizations respond to calls from stakeholders to make efforts to be greener and to encourage greener activities with their suppliers. UK supermarket chain Tesco has recently pledged action against food waste as part of its stance for corporate responsibility. This may even in the short term reduce the amount of food that the chain sells, especially if previous marketing promotions of ‘buy one get one free’ are eliminated.
Promoting Supply Chain Sustainability Benefits
While economic advantages are already convincing many supplier chain organizations that sustainability is the way to go, others see it as an additional marketing tool to promote their company to the market. Still, accepting a little self-interest is perhaps a small price to pay if the claims of sustainability are substantiated and help preserve the planet’s well-being.