The Green Report Part 2: Is Your Green Sustainable?

Increasingly it seems that just about every organization or product is claiming to be “green.” Even if your company is not planning to address becoming greener this year, your customers, competitors and government probably are, but supply chain professionals and regulators are also growing increasingly skeptical of unsubstantiated “green” claims, and wary of brands that fail to address sustainability in a transparent and systematic manner. What are the major trends in sustainable supply chain management, and what can you do about them?

Business and governmental leaders around the world are grappling with unprecedented and simultaneous economic, environmental and social turmoil that calls for new approaches to decision making in the production and consumption of goods and services. Increasingly, sustainability and transparency are the core principles behind the approaches being taken to avert disaster and restore confidence. In addition, new standards, sustainability management tools, social networks and Web 2.0 capabilities are increasing the ability to detect unsustainable “green” claims.

Sustainability requires decision-making that takes economic, social and environmental system factors into account considering the full “cradle to cradle” lifecycle of products and product systems. Transparency is a foundational sustainability concept that addresses the disclosure, accessibility and verification of standards-based product lifecycle data.

An increasing number of firms are aligning their decisions with the four sustainability system conditions called for within the Natural Step framework: i.e. To reduce and eventually eliminate the ways in which the goods and services they purchase or produce contribute to ongoing build-up of substances taken from the earth’s crust; ongoing build-up of substances produced by society; ongoing degradation of natural systems by physical means; and undermining the ability of other people to meet their social and economic needs.

Many large companies have set explicit objectives for minimizing the negative impact of their supply chains, including the impact caused by their suppliers. In response, several major supply chain management organizations such as the Institute for Supply Management (ISM) and the Sustainability Purchasing Network have developed sustainable purchasing initiatives, and United States Federal Trade Commission (FTC) is expected to intensify scrutiny of green marketing claims in the next several months.

According to ISM “The development and implementation of measurement and performance criteria is important to the success of sustainability and social responsibility programs. Integrating goals and objectives with relevant measurements will ensure the ability to track and report progress against various initiatives. Supply professionals must consider impact, influence and positioning when selecting and developing metrics to embed throughout the: supply organization, entity and supply base.”

A metrics document was developed by ISM to provide supply professionals and management with a broad-based list of possible metrics. Despite differences in emphasis, sustainable procurement activities in both the public and private sectors take four main approaches: Procurement of eco-labeled products or services; Completing in-house product and/or service evaluations; Completing third-party product and/or service evaluations; and Industry or product category supply chain programs.