Supplier performance in the area of sustainability is to say the least, a confusing realm. Many companies not flushed with expertise within CSR or environmental concerns in their supplier management organizations are turning to an emerging set of standards and organizations in this space. In fact, as you look around at the various initiatives trying to address this business problem you will quickly see many similar but different approaches in this area. As we work together to define the most appropriate approach for your company there are organizations and frameworks available to help.
How Do I Start to Implement Sustainable Supply Chain Change? Here we have seen thought leadership and guidance from organizations such as the United Nations/ Global Compact. Other organizations falling into this category include the World Economic Forum (WEF – See Initiatives), WWF network and some traditional supply chain organizations such as the Institute for Supply Management. These groups look to engage business through executive education, on-the-ground programs, policy and advocacy. Many companies refer to the guidelines and principles provided by these organizations as reference in supplier codes of conduct, to define their sustainable supply chain questionnaire and to build specific supplier contract language.
Where Can We Learn Best Practices For Our Business? More targeted organizations have emerged including the EICC (Electronic Industry Citizenship Coalition), Fair Labor Association, Outdoor Industry Association (OIA), The Sustainability Consortium (TSC) and more. Most of these initiatives are either focused on a region, industry (EICC), or interlinked supply chains (The Sustainability Consortium). Part of our overall challenge is that each consortium is in the process of defining the critical information and assessment methodologies particular for their group of members. Best practices and hot spots for the tech heavy EICC can be somewhat different to those members of the Fair Labor Association which tends to be influenced by Fashion/ Apparel. Many companies engage in these consortiums to network with industry peers and to incorporate industry specific standards into their business practices.
How Do We Measure? As you might suspect there are multiple reporting frameworks and standards being developed for sustainable supply chain. Reporting and data organizations such as Bloomberg, the Dow Jones Sustainability Index, GRI (Global Reporting Initiative) and more traditional supply chain organization such as the Supply Chain Council (SCOR 9.0 model) have focused on the needs around sustainable supply chain reporting. We are starting to see collaboration across consortiums and reporting organizations in an attempt to become more of a “One-Stop Shop”. Thought leadership organizations such as the UN/GC are starting to pair with reporting groups like the GRI to align reporting framework into guiding principles. Most recently, the OIA has released its EcoIndex Beta version which provides a holistic view of top level policy mapped down to specific supply chain assessment across company and products www.ecoindexbeta.org.
What About Business Reality? So as you see there are many reference organizations that can help you on your sustainable supply chain journey. Starting with a thought leadership group might help you understand a broader view of general sustainable supply chain possibility. Engaging with industry peers in a consortium is a good way to network and build up a foundation of collaboration. That being said, we still cannot remove the fact that we all have limited resources and time. In the end technology will be needed to bring thought leadership, best practices, industry collaboration and standards on-line and into timing associated with daily business reality. New technology in the areas of Web 2.0 collaboration and social networking can be applied to more traditional supply chain assessment to help in this area. We will discuss the technology possibilities in future segments.