Corporate Sustainability and the Supply Chain

For retail business, sustainability is no longer just about saving operational dollars, but about brand and leadership. Recent years have seen a rising sea change in both supply chain and consumer awareness. Companies that are forward-looking see that future success requires rethinking what sustainability means in their corporate culture, marketing and products.

On the consumer side of things, technology is enabling a new level of transparency—the iPhone app “Good Guide” and websites like “Coming Clean” are allowing consumers to have information at their fingertips about toxicity in everyday products and other aspects of environmental preference. Similar to food information, the new data educate consumers and are beginning to lead to increased demand for sustainable products as well as stores. The EPA recently released new “chemicals of concern,” identifying many chemicals found in everyday items that are now red-listed as hazards.

A new global Green Product Association is working with both ends of the supply chain to communicate what is truly green, and what is “greenwashed.”

Perhaps the largest impact is being felt by Walmart’s Sustainability Consortium, a collaborative effort launched to green the supply chain of products. Although still new, the published environmental requirements and accounting that Walmart has distributed to suppliers have already triggered changes in packaging, distribution and tracking. At the same time, the nonprofit organizations, CERES and ClimateCounts.org track and monitor the sustainability of corporations, many of whom are retailers.

As we saw in the building industry, tweaking around the edges and green marketing is not enough. The sustainability that is best for a company’s bottom line requires leadership from the top levels of the company. In order for sustainability to permeate all aspects of a corporation and be profitable, the most important first step is to do a baseline assessment to identify opportunities that bridge different departments, from finance to HR, distribution to operations, product suppliers and carbon accounting. By engaging department leaders and formulating strategies with their input, company leaders can use the focus on sustainability to increase efficiencies and collaboration across the company.

One of the most important aspects of sustainability is accountability and metrics, and corporations are being evaluated by environmental “report cards,” which have required a layer of accounting that was not previously kept. However, it is critical to be careful about what you are counting and how, so that the information you track is valuable over time.

Many companies have been early adopters and have voluntarily taken on environmental initiatives, necessitating others to step up in order to be competitive. Social Venture Network, a membership organization of entrepreneurs and business leaders who are committed to sustainability, leverages stockholders to demand environmental accounting and accountability and has many members active in Washington, D.C., working hard to promote these values nationally.

At this point in history, we can see that shifting business practices to integrate sustainability is not a question of “if,” but of “when” and “how.” As any business leader knows, those who lag behind end up paying for that delay dearly, so the question is when will you start, and how will you proceed.

Typically, green initiatives start where its easiest to see payback and tell a good story to customers, which is in facilities. Any chain store that has implemented smart green building and retrofit strategies can see quick returns on their investment: Energy savings from 30% to 50% and improved indoor air and daylighting all tell a good story. Leveraging successes and engaging departments in identifying other opportunities will allow an initiative to build on itself and grow over time to other aspects of packaging and distribution. As consumer awareness continues to grow and competition in the market creates momentum, leadership and transparency will help build consumer loyalty and faith in your brand and your value to the community.

Barbra Batshalom is CEO of The Green Roundtable/NEXUS, a nonprofit organization whose mission is to mainstream green-building practices through providing education, creating policy, greening the building product supply chain and setting new standards for professional practice.