What's Your Sustainability Business Case?

(Originally published as “What's Your Sustainability Business Case?” in Purchasing b2b Magazine, Nov/Dec 2013.)

Tips to measure your organization’s sustainable performance

We hear the term sustainability a lot these day and many organizations are striving to integrate this newer concept. Sadly, it’s easier said than done, and there’s a lot of variation in people’s understanding of just what this term means. It’s hard to pin down, so the path to realizing sustainability is not as straightforward as one might hope.

An easy place to start is by developing a Global Sustainability Initiative (GSI). Have you done an environmental or economic impact assessment? This is not necessarily a new concept. It was first realized in the 1088’s when cities began to question whether it was good corporate governance to draw water from the same place that sewage was being dumped. When conducting assessment of this type, the questions you’re trying to answer is: so we have enough for everyone, forever? Begin measuring from there.

Supply chain practitioners are already attuned to measuring, so why not start measuring sustainability attributes? Practitioners also have the advantage of the whole picture view point an d know the star-to-finish journey of their products. Broadening this perspective beyond the supply chain can bolster sustainability initiatives.

Consider the light bulb. When light bulbs are replaces in a warehouse, office or factory, consider their start-to-finish life cycle. By doing so, you gain a better understanding of the total cost associated with this one item: energy saving realized form using new as as well as the anticipated cost (monetary and environmental) of disposal when they inevitably burn out.

Usually, one condensers only environmental and economic factors when thinking about sustainability. But the Social factor is the third main sustainability pillar, and social conscience is a vital component that needs to be taken into account. Determine the impact of the quality of life of the people who touch your offering. You can also improve quality of life without jeopardizing economic or environmental inputs and outputs.

Consumers are becoming better informed about the products they guy. We need only think of our own buying habits. How many times do we gravitate towards those that are environmentally friendly or energy efficient? It’s not just the economic value of a  product that is being factored in but the environmental and social value.

Leading companies like Wal-Mart, Rona and Ford are already doing ESG (economic, social, corporate governance) benchmarking. They’re looking within thier supply chains to track the environmental impact of the goods and services that they utilize. Although no clear, overall ESG standards exists, they’re forging ahead and starting to measure and improve sustainability through efficiencies in packaging, transportation and beyond.

Sustainability goes beyond a “feel good” exercises. It must become a key consideration in all business activities. It’s what will enable companies to endure, remain production and  continue evolving. While there will be commonalities in many of the sustainability initiatives companies enact, it’s up to individual organizations to find the optional route that suits their individual and organizational needs and goals.

Procurement Professional Tip:

Become the functional expert on the sustainability issues surrounding the goods or services you procure. Is there an industry standard sustainability measurement associated with these items? If non exist, what economic, social and environmental elements should be taken into consideration?

Management Insight:

Look within your organization to see how a Global Sustainability Initiative could be implemented. An organization’s strategic goals need to be factored in. Leverage your leadership and passion to make it a rewarding personal and professional journey.

Linda Craig CSCMP, CITT, CHRP, MBA, is the managing partner of RSVP (Retention Strategy Value Partners), a strategic supply change innovation organization. Reach her at Linda@retention.ca.