Corporate Supply Chain Sustainability Strategies & Programs: Count as a Cost or Strategic Investment?

Corporate Supply Chain Sustainability Strategies & Programs: Count as a Cost or Strategic Investment? Consultant to Large-Cap Companies Provides Some Helpful Answers for Corporate Managers

Question:  Does a corporate sustainability program “cost” (and thus shows up on the “expense” side of the ledger) or are there measurable “returns” on the investments that companies are making to develop or adjust strategies, assemble teams and launch sustainability programs? (Especially those that have set goals and where progress is measured and then publicly reported.)

We frequently hear this kind of discussion in the phone calls we have with corporate managers, especially those at companies where management is now considering what to do or perhaps just starting out on their sustainability journey.  Senior managements often begin internal discussions with the questions for their managers:

Who is asking for this? What will this cost? 
And where is the ROI for our efforts?

Working with client organizations we see the firms’ customers and clients asking their supply chain partners about their respective sustainability efforts and requesting extensive information, directly of the firms (with detailed questionnaires) and through third parties such as EcoVadis and CDP Supply Chains. The questions are coming faster and more detailed than in previous years.

The important customer with a range of sustainability-themed “asks” of course considers their supply partners to be part of their (the customer’s) overall sustainability footprint – and so the questions.   Corporate sustainability leaders understand the importance of the “ask” and provide detailed answers to their valued customers.

If the questions internally at the supplier company are along the lines of: “why” or “who is asking” and “what will this cost us” or “what is the return”…consider: 

“Economic longevity and social and environmental responsibility are increasingly two sides of the same coin. Consumer surveys show that many favored brands are focused on sustainability.  And, removing waste and emissions from the supply chain goes hand-in-hand with efficiency…both boost the corporate bottom line.”

That’s some of the essence of a timely report – “Sustainability: The Missing Link” – that was authored by the Economist Intelligence Unit and sponsored by LLamasoft, an Ann Arbor, Michigan-based supply chain management software provider serving such clients as Ford Motor, 3M, Intel, Bayer, and Kellogg’s.

Highlights of the report and important background come to us this week from Supply Chain & Demand Executive magazine, with an interview with Dr. Madhav Durbha, Group VP at LLamsoft.  The interviewer explores how sustainability considerations cause companies to think differently about their supply chains and examples of global companies are managing the triple bottom line.

The questions asked of Dr. Durbha by the magazine’s Amy Wunderlin: 

Why are many supply chains still doomed to inefficiency and environmental waste?  What are the top mistakes companies often make when trying to make their supply chain green? How many organizations strike a balance between profitability and sustainability despite current economic uncertainty? Why are addressing sustainability needs through the entire supply chain important? (There are more questions and more answers in the interview.)

An important take away from the interview: 

“As long as organizations think of cost reduction [efforts] and sustainability being at odds, they may be missing out opportunities to accomplish these dual objectives.”

There are numerous helpful hints for you in this week’s Top Story.
SDC/Supply Chain & Demand Executive magazine, published by b-to-b media & intelligence company AC Business Media, covers warehousing, transport, procurement and sustainability, among many topics. Subscriptions to are free. 

This Week's Top Story

Profitability or Sustainability? It Doesn’t Have to be a Choice
(Wednesday - March 27, 2019) Source: Supply and Demand Chain Executive - Dr. Madhav Durbha of LLamasoft offers insight into why–with the proper tools–organizations don’t need to choose between profitability and sustainability, despite current economic uncertainty. 

Here is the link to the report:


Sustainability Training HQ Highlight

A Deeper Shade of Green: The Social Layer of Green FSAs
By Ruth Rennie
Developing Green Firm Specific Advantages (GFSAs) allows firms to build business capacities and assets that enhance both economic and environmental performance.However developing GFSAs focused solely on environmental management capacity will be inadequate to deliver sustainability and long term financial performance.An additional set of GFSAs that build capacity to manage the social dimension of the people, planet, profit equation are required. These relate to the internalisation of the social contract, operational approaches that develop social equity, and communications approaches focused on inclusive constituency building.

This is the “final paper” authored by sustainability / CSR professional Ruth Rennie as she completed the on-line, self-study “Certification in Corporate Responsibility and Sustainability Strategies” hosted by Governance & Accountability Institute and developed by Professor Nitish Singh, Ph.D., Associate Professor of International Business at the Boeing Institute of International Business at Saint Louis University, and founder and consultant at IntegTree LLC; and, Instructor Brendan M. Keating, Adjunct Professor at Wilmington University and VP of IntegTree.

The professionals completing the course work receive certificates from the Swain Center for Executive & Professional Education at the University of North Carolina Wilmington and from G&A Institute.

The certification program provides a broad overview of key corporate responsibility challenges and strategies that will enable organizations to succeed in the 21st Century Green Economy.

More information about the on-line course is available here.


Sustainability: Continuing Forward Momentum!

The Missing Ingredient in Corporate Sustainability Rankings
(Tuesday - March 26, 2019) Source: Triple Pundit - Companies spend countless hours every year applying to appear on elite lists, such as Fast Company’s “50 Most Innovative Companies” list, Fortune’s “Change the World” list, Forbes’ “The World’s Most Reputable Companies” list, or... 

Sustainable routes to US equity exposure: a selector's view
(Tuesday - March 26, 2019) Source: City Wire Selector - The Geneva-based fund buyer says US companies approach ESG – or corporate, social responsibility as it is more commonly known in North America – with a very different focus compared to the European market, which creates a further... 

Is it your responsibility to be sustainable?
(Tuesday - March 26, 2019) Source: Daily Wildcat - Sustainability is defined in three ways: being able to be used without being destroyed, using systems that do not destroy natural resources, and the ability to go on and last for a long time. The human race has not had a good... 

McKinsey: luxury consumers open to sustainability premium
(Wednesday - March 27, 2019) Source: Fox News - Fashion industry experts say luxury consumers are expressing a willingness to spend more for garments whose production doesn't harm the environment or exploit workers, a sign they said of a new era of sustainability in... 

Sustainability Linked Loan Principles Extend Green Finance
(Wednesday - March 27, 2019) Source: JD Supra - The role of lenders in promoting sustainable development has received a helping hand with the issuance of the Sustainability Linked Loan Principles. The Principles provide a new industry standard for banks to incentivise...

The Next Wave Of Sustainable Fashion Is All About Regenerative Farming  
(Thursday - March 28, 2019) Source: Fashionista - When human beings have made such a mess of the planet, where does that hope arise from? For many experts, a groundbreaking way of thinking about agriculture — regenerative farming — offers one of the most concrete reasons for... 

The Importance Of The Infrastructure Sector To The Sustainable Development Goals
(Thursday - March 28, 2019) Source: Forbes - The environmental issue of water and waste water management; the human capital issue of employee health, safety, and well-being in the category of human capital; and the business model and innovation issue of environmental social... 

More needs to be done to carry out sustainability goals, says former UN chief Ban Ki Moon
(Friday - March 29, 2019) Source: CNBC - The United Nations’ plans to fight hunger and climate change have not been adequately carried out, the organization’s former secretary general Ban Ki-moon said on Thursday.

The intersection where retail technology and sustainability meet
(Friday - March 29, 2019) Source: Essential Retail - Sandra Roling, who is leading the development of not-for-profit organization The Climate Group’s new corporate leadership initiative on electro-mobility, EV100, said: “The important thing for me is seeing how fast...

...and Corporate Sustainability Actions

This Sustainable Packaging Company Optimized Their Supply Chain And Transformed The Customer Experience
(Monday - March 25, 2019) Source: Forbes - It has been calculated that UPS and FedEx alone move 11.6 billion packages every year. And with omni channel sales and direct-to-consumer orders on the rise, this number continues to rise year over year. But have you ever... 

Starbucks Continues Sustainability Efforts
(Thursday - March 28, 2019) Source: HFN Digital - Starbucks customers in selected cities will test the company’s greener cups, which are both recyclable and compostable, as the company looks to make progress on sustainability efforts related to cups, straw usage and... 

Is sustainability your priority? So is Volvo's
(Friday - March 29, 2019) Source: Global Fleet - Volvo Cars today announces it will replace its current paint shop at its Torslanda car manufacturing plant with a new one, which will result in an expected reduction of paint shop energy consumption and emissions by at least one.

30 Years After the Exxon Valdez Spill, Investors Are Still Trailblazers on Sustainability
(Friday - March 29, 2019) Source: Triple Pundit - It was 30 years ago this month that the Exxon Valdez oil tanker ran aground in Alaska’s Prince William Sound. The damage was horrific, starting with the spilling of an amount of crude oil that surged to the hundreds of thousands... 

How Good Food 100 Restaurants Is Helping To Create A More Transparent And Sustainable Food Industry
(Friday - March 29, 2019) Source: Forbes - Words like “farm-to-table,” “seasonal” and “locally sourced” are on so many restaurant menus these days, but with a lack of regulation around these terms there’s no telling what they actually mean. As the food industry moves... 

Sponsored Message

ESG Topics & Issues Headlines

Study declares 95% of reported bitcoin trading is fake  
(Monday - March 25, 2019) Source: Notebook Check 

"We Are in Deep Trouble": Carbon Emissions Break Record in Devastating Global Setback 
(Wednesday - March 27, 2019) Source: Science Alert 

China bucking global shift from coal-fired power -environmental study  
(Thursday - March 28, 2019) Source: Reuters Africa 

White people’s diets are killing the environment: study  
(Friday - March 29, 2019) Source: NY Post  

Walmart is expanding its education benefits for 1.4 million U.S. associates
(Friday - March 29, 2019) Source: Yahoo Finance

Opioid suit: New York targets billionaire family behind OxyContin
(Friday - March 29, 2019) Source: NBC News

European regulator slaps record fine on Fitch Ratings  
(Friday - March 29, 2019) Source: Financial Times

Wells Fargo CEO Tim Sloan steps down suddenly
(Friday - March 29, 2019) Source: CNN

Headlines From the Corporate Sector

Cereals, Beers and Other Food Contain Weed Killer Chemical – What Does It Do to Your Body?
(Monday - March 25, 2019) Source: The Epoch Times

Bayer, J&J settle U.S. Xarelto litigation for $775 million
(Tuesday - March 26, 2019) Source: Reuters

Apple wants to be the only tech company you trust
(Wednesday - March 27, 2019) Source: The Verge

Sweden: Swedbank offices raided for money laundering  
(Thursday - March 28, 2019) Source: DW

Monsanto Loses Roundup Cancer Trial to the Tune of $80 Million
(Thursday - March 28, 2019) Source: Gizmodo

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The Sustainability Highlights eNewsletter is prepared by Governance & Accountability Institute, Inc. based on continuous monitoring of trends and developments in Sustainability and ESG. Governance & Accountability Instiute is the "Sustainability Headquarters™" for clients in the corporate, investment, public and social sectors. Based in New York, G&A is a for-profit consulting organization providing a range of value-added strategies, services and resources related to ESG & sustainability to clients in the corporate and capital markets communities. For G&A's full range of services, click on each of the links below:

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