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Sustainable Supply Chains Are Good Business
By Tyler Collins

In “Sustainable Supply Chain: Why it is Good Business,” a live virtual session in Accenture’s Sustainability 24 conference, senior executives from across Europe came together to discuss how leading companies are working to turn supply chain sustainability into a driver of competitive advantage.

Moderator of the session, Gary Hanifan, Managing Director of Global Sustainable Supply Chain Services for Accenture, summarized the discussion as four main points:

  • Companies that understand the business case for sustainability are gaining a first mover advantage.
  • Sustainable supply chains are no longer a “nice to have” but rather a business imperative that is key to sustaining business continuity.
  • The focus is a shifting away from policy compliance to business continuity—to high performance.
  • Companies must continue gathering data, resolving corporate governance issues, and implementing the necessary processes in order to sustain long-term benefit.

Dexter Galvin, Head of Supply Chain for the Carbon Disclosure Project (CDP), argued that the biggest drivers for supply chain sustainability are risks such as the impacts of climate change, increasing frequency and severity of severe weather events, and regulatory risks.

He highlighted a study done by the Carbon Disclosure Project, one of the foremost guidelines for corporate sustainability disclosure, which looked at data from 2400 CDP respondents last year. Although only 29% of respondents showed savings from emissions reductions activities, it comprised $13.9 billion in savings. “If we can imagine the rest of those suppliers taking up emission reductions activities, we’re seeing many, many more tens of billions of dollars of savings, if not more.”

Liz Cross, Head of Governance & Sustainability in Procurement for British Telecom, noted the recent pilot program that company conducted to see what could be achieved by deeply engaging with suppliers. By closely working on the sustainable development of products with a small group of key suppliers, the program reduced 30,000 tons of carbon emissions within 6-12 months (equal to the carbon emissions of 2,000 people).

“…What we see going on now in our [chemical] industry is really the understanding that now business is sustainability and sustainability is business,” remarked Andre Veneman, Corporate Director of Sustainability & HSE for AkzoNobel, a world leading chemical manufacturer. “These companies integrate [sustainability] deep into their strategy, it is not as an isolated subject.”

Mention of specific companies or securities should not be considered a recommendation to buy or sell that security. Past performance is no guarantee of future results.

 

Posted: June 17, 2013