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CDP to Rate Companies’ Supply Chain Performance

Category: News 06 Sep 2016

CDP, formerly the Carbon Disclosure Project, has announced that it will begin rating companies on their handling of greenhouse gas emissions in their supply chains. CDP already rates companies on their internal greenhouse gas mitigation efforts, in addition to its main service as a platform for disclosing emissions.

This new ratings project is a natural next step for the organization. Supply chains are the source of four times the amount of emissions of internal company operations. With nearly a hundred businesses already reporting supplier-related data to the CDP, the basic framework for the ratings system is already in place. The methodology will include governance, ambition, measurement and supplier engagement.

CDP has stated that it will credit the highest performers in its annual CDP supply chain report. It also plans to start naming the worst performers after a few years. Dexter Galvin, head of the non-profit’s supply chain program said “By shining a light on whether companies are taking responsibility for the emissions hidden in their supply chains, we hope to spur on the laggards and drive a race to the top.”

How companies will react to this new development is unclear. The reaction will probably be largely positive, as those disclosing data to the CDP are likely confident about their performance. However, public sustainability ratings are still an emerging trend. Regardless, this project is sure to get the attention of leaders in impacted businesses.

ICT Companies Embrace the Circular Economy

Category: Blog, Sustainability 17 Aug 2016

A number of the leading companies in the Information and Communications Technology (ICT) sector are going to great lengths to implement circular economy strategies into their operations. This industry has a large environmental footprint, using large amounts of complex raw materials and producing considerable quantities of waste at their product’s end-of-life. Globally, around 45 million metric tons of e-waste is produced every year. Many companies in this sector are attempting to reduce these impacts through recycling and take-back programs. For instance, Dell is already using plastics and carbon fiber source materials taken from e-waste in some of its new products. Similarly, Intel’s Design for the Environment program ensures that product end-of-life is taken into consideration from the outset. Companies in this sector have massive environmental impacts, but these actions show that they are taking innovative steps to operate with circular economy principles in mind.

However, some argue that the way in which companies in this sector do business is harming the potential for progress towards a more circular economy. Their focus on convincing consumers to update their technology every few years leads to massive amounts of e-waste. Furthermore, the constantly changing technology and focus on smaller and smaller products makes it extremely difficult to create effective take-back and recycling programs.

Attempts to implement circular economy principles into operations, in any sector, will inevitably expose contradictions such as these. Businesses need to make money. However, organizations like Dell and Intel continue to seek out increased revenue whilst at the same time taking steps to operate more sustainably. It is exactly these kinds of companies, with heavy impacts but a large capacity for innovation, which will be the proving grounds for circular economy principles in action.

America’s Sustainable Farming Revolution and the Power of Collaborative CSR

Category: Blog, Green Business, Sustainability 04 Aug 2016

Farmers across the United States have been adopting sustainable farming practices at a rapid rate over the last few years. It is estimated that as of today, half of farmers in the US are using methods that could be considered more sustainable. The most common objective of these practices is the reduction of fertilizer use, whilst achieving the same or better crop yields. Planting cover crops during the off-season, for example, can reduce the need for nitrogen and increase water retention. This means less nitrogen runoff into the water system and can save farmers substantial amounts of money.

While the benefits of these practices are clear, most farmers do not adopt them independently. The majority are encouraged to act by food companies or retailer cooperative groups. The SUSTAIN program stands out as a notable example of one such catalyst organization. SUSTAIN was created by an industry group, United Suppliers, and the Environmental Defense Fund. It gives farmers advisory support and technological and best practice information. The program has been a huge success and now covers approximately 30% of the US food and beverage industry with continued growth likely.

This story, while certainly noteworthy for the agricultural industry, is not isolated. This structure has emerged as one of the primary ways in which sustainability progress is being driven throughout the private sector, in countless industries. The structure is this: An industry group, often partnered with an NGO, creates a program that distributes sustainability resources and knowledge throughout the industry’s supply chain. Member companies frequently include carrots and sticks to ensure adoption by suppliers. This is how many companies, particularly SMEs, are being encouraged and enabled to adopt sustainability practices. Farmers are just one example.

While this trend is a key driver of sustainability progress in the private sector, it is worth asking questions regarding its medium to long-term implications. Is sustainability truly being ingrained in the culture of the adopter if it is on some level mandated by buyers or other industry players? If this pressure were to dissolve, would they continue to progress? Despite these questions, this trend’s positive results, in the short term at least, are worthy of the invested resources.

New Report Details Severe Climate Change Risks for United Kingdom

Category: News 16 Jul 2016

A new risk assessment report released by the United Kingdom’s Committee on Climate Change has presented the many climate change risks that the nation faces. The report, developed over three years and contributed to by over 80 experts, paints a bleak picture of the impacts that the UK could face. Its conclusions will likely add an increased sense of urgency to discussions both within the Westminster government and in the public domain.

The report asserts that internally the UK will face more frequent and severe floods and soaring summer temperatures. The flooding will be of particular concern after the damaging floods that took place throughout the country in 2015. The report also speaks of the less well understood but nevertheless serious dangers presented by a possible increase in pests and diseases. Finally, the threat to farmlands is discussed. This is an uncertain area as changing temperatures could lengthen the growing season, boosting production. However, simultaneously topsoil damage and erosion could cause irreparable harm if not controlled.

The risk assessment also discusses outside threats. Instability in other regions, caused by resource scarcity, could necessitate military intervention and disrupt trade. The trade factor is crucial to the economic prosperity of the UK as well as to the country’s food security. The UK imports 40% of its food and is reliant on a large number of foreign producers for the remainder. Furthermore, a major disruption in virtually any other region could have a profound knock-on impact.

This risk assessment report is more than just a helpful advisory piece. Legally, it must be used by the government in their develop of an adaptation plan. Long-term plans for the environment and for climate change mitigation are currently in development. Time will tell if these plans reflect the sense of urgency conveyed in the report.

Brexit and Corporate Sustainability

Category: Blog, Legislation 29 Jun 2016

Last week, the people of the United Kingdom voted to leave the European Union, ushering in a period of uncertainty and change that is likely to have broad implications for the business community. While it is important to note that the vote itself is not binding, the private sector in Europe and beyond must immediately consider the effects that separation would have on various aspects of their operations, if it is actually enacted.

Corporate sustainability is no exception. Companies in the UK will be impacted by changes to the regulatory landscape. UK businesses are currently subject to many European laws on environmental and social issues, including REACH, RoHS, WEE, and more. Over the coming months and even years, government decision makers in London will have to look through these laws and decide how to handle each piece or group of legislation.

In all likelihood, many laws will be kept the same or redrafted with content similar to the original. The UK government’s top priority is, and will remain, stability. Its desire to keep businesses thriving and investment flowing will likely result in legislative continuity. Furthermore, Westminster’s desire to remain in the European ‘Single Market’ makes major change all the more unlikely. It is improbable that they would raise legislative sustainability barriers that would result in a more difficult environment for business. In fact it is possible that some sustainability laws will be done away with to encourage business confidence. However, this is uncharted territory and the UK’s private sector will have to keep up with developments as they unfold. It will take time.

Companies that are joint ventures in the UK and other EU countries are in a uniquely complex position. Unilever, for example, is co-Headquartered in the Rotterdam and London. If the legislative landscape in the UK changes, questions of compliance will certainly arise for them and other companies in similar situations. Again, keeping a careful eye on developments is key.

Businesses outside of the UK and EU will also be impacted if they are doing business with either entity. The division means that they must be seen as two distinct trading partners with different sustainability laws. While it’s unlike that these companies will produce different products for the two markets, it is likely that compliance costs will increase.

Companies that have taken a ‘beyond compliance’ approach to sustainability over the past years are placed at an advantage in this situation. As always, staying ahead of the sustainability curve makes it easier to avoid risk and build value.

Supply Chain Monitoring Tool Reveals Broader Transparency Trend

Category: Blog, Green Business, Supply Chain 08 Jun 2016

Bureau Veritas has released a tool that will help companies in the textile industry monitor their chemical emissions. The BVE³ tool enables factories to input chemical emissions data into a platform on a regular basis. This information is then evaluated and scored by Bureau Veritas teams and the results can be communicated up the supply chain to buyers.

As well as increasing tracking and transparency on key environmental data, this ongoing monitoring is likely to encourage reductions in harmful emissions. As with many other environmental KPIs, monitoring is often the first step towards effective management and improvement. This is particularly important for chemical emissions, the negative impacts of which can be especially destructive.

The tool is the latest example of a broader trend toward increased supply chain transparency and engagement. The trend is driven primarily by buyers wishing to manage the sustainability impacts of their supply chains more closely. Many companies, in textiles and other sectors, are demonstrating that they are no longer willing to take a single faceted approach to supply chain sustainability. Rather, a combination of audits, ratings, data monitoring, and increased engagement are becoming the norm. This increased level of scrutiny makes suppliers more likely to improve their CSR management systems. It also gives buyers the information they need to make impactful decisions regarding CSR in their supply chains. The domino effect that this produces can be far reaching, and tools such as this are the driving force behind it.

Trucost Study Demonstrates the Benefits of Closed-Loop Plastic Recycling

Category: News 25 May 2016

A new study published by Trucost has highlighted the massive potential benefits of sustainable plastic recycling. The research focuses on the computer manufacturing industry, finding that if the entire sector used closed-loop recycled plastics, it would save society $700 million per year in environmental costs.

A number of companies are already engaged in this sort of activity. For instance, Dell uses plastic reclaimed from its own take-back programs to manufacturer some of its high-end products. This saves the company money, contributes to its corporate responsibility goals, and has a far reaching sustainability impact. It is an example of circular economy in action.

Despite the clear benefits of such action, getting more companies to work with recycled plastics is difficult. Trucost asserts that this is largely due to insufficient waste management measures that are the necessary foundation for bringing materials back into use. Government incentives, or simply wider education of the benefits could spur on more action.

Plastic reuse is just one aspect of circular economy practices. However, it is another important success story that demonstrates the win-win opportunities that exist for companies in a variety of industries.

Want to know more about circular economy practices? Visit the Ellen MacArthur Foundation here.

Tech Giants Endorse EPA’s Clean Power Plan

Category: News 07 Apr 2016

Some of the largest businesses in the US, including several tech companies, have endorsed the EPA’s proposed regulation on coal-burning power plants. The plan would require all existing plants to slash carbon emissions by 32 percent by 2030, against 2005 levels. The proposal is currently on the Supreme Court’s docket after 27 states filed legal motions challenging its legality.

Last week, the largest tech companies in the country – Amazon, Apple, Google, and Microsoft – filed a formal endorsement with the Court. The same day, Adobe, Mars, Ikea North America and Blue Cross Blue Shield also filed similar motions. The organizations cited their own ambitions to use clean power and asserted that the EPA’s plan made good business sense in the long run. Their voices became added to the many cities, counties, and other businesses that had already come the plan’s defense.

Whether or not the move has a significant impact on the Court’s ruling, the endorsements are a strong sign of support from some of the most important economic forces in the country.

Greenpeace Report Reveals Stalled Palm Oil Progress

Category: Blog, Supply Chain 23 Mar 2016

A new Greenpeace report has criticized a number of companies for their lack of progress on sustainable palm oil sourcing. It reveals that a number of major corporations are failing to meet their own targets, at a high environmental cost.

The palm oil industry is one of the largest contributors to deforestation in some of the most biodiversity rainforest regions on Earth. The scale of the damage comes from the sheer size of the industry. Palm oil can be found in around half of consumer goods on supermarket shelves.

Many of the corporations involved in the industry have reacted to pressure from stakeholders by declaring ambitious goals for sustainable palm oil sourcing. These goals are aimed at eliminating deforestation in their supply chains and would mark a major step towards protecting the rainforests of Indonesia and other countries. However, this Greenpeace report, that scored twelve major corporations on their progress, has revealed that the majority are failing to implement changes. Only two of the twelve companies, Ferrero and Nestle, are on track to meet their goals of ending deforestation in their supply chains. For the rest, making this a reality remains far off.

The task is undoubtedly a challenge. Even simply gaining an understanding of the structure of a supply chain requires substantial investment. As the report states “Most companies are unable even to say how much of their palm oil comes from suppliers that comply with their own sourcing standards.” However, companies have achieved ambitious supply chain projects before. For instance with conflict minerals, where a greater than 80% conflict-free sourcing certification has been accomplished.

The reasons for this stalled progress are complex. It is worth pointing out, as one of the report’s authors did, that “almost everyone we spoke to clearly has good intentions…— there are companies out there that don’t have policies and won’t speak to us — but this group is working to address this challenge.” However, some of the companies are simply not putting in sufficient funds for real improvement. Reports like this show that third-party organizations are willing to invest the time and resources to ensure that companies are acting on their targets. Organizations that fail to make their targets risk public backlash. Once a public goal is set, the stakes are raised for implementation.

GreenBiz 2016 Is A Wrap

Category: Blog, Green Business 25 Feb 2016

The juggernaut corporate sustainability event, GreenBiz 16, has just ended in idyllic Scottsdale, AZ. The end brings a sense of relief (networking and ideas overload), a sense of enormous challenges and a renewed sense of purpose. Purpose – one of the main take-aways from the conference; lots of talk about how businesses need to refocus on their core purpose and integrating aspects of environmental and social responsibility into that purpose. Maybe it’s a bit of mission and vision review? Probably needs to be done in the C-suite and at the BU level.

Another takeaway – COP21 will affect business behavior in 2016, but much of the work around lowering CO2 emissions would have happened anyway. Dr. James Hansen was a bit dismissive of all of this and said, basically, do whatever you can in your power to influence policy in favor of a “Fee and Fund” carbon tax approach to de-carbonization. We probably need to do both.

And then there was the interesting session on “Net Positive,” which is an effort to reframe corporate sustainability from “do less bad” to “do good.” A little unclear about how these efforts would not be perceived as greenwashing and/or detract from companies focusing on material issues in operations and supply chain. But worthy of noting with a hard launch expected in June.

Also good discussions about sustainable purchasing, including a “guru” lunch organized by ISM (www.instituteforsupplymanagement.org) and SPLC (www.sustainablepurchasing.org). This concept of driving institutional purchasers to choose goods and services with lighter impacts is very much gaining traction, but still faces serious challenges about (a) building out category-level definitions of what is “sustainable” and (b) training the purchasing community about the overall best-practice-based strategy and the tools needed to operationalize the concept. Watch this space.

That’s a wrap.