Collaboration Stressed to Develop Sustainable Value Chains

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By Paul Stinson

Oct. 6 — Faced with increasing consumer demand to “buy green,” industry leaders emphasized the value of collaboration in developing sustainable value chains, while also noting that consumer recognition for eco-friendly behavior remains a challenge as businesses continue to work toward greening their supply chain.

“[Something] we all have to crack in the consumer products industry, [is] how do we get the consumer to recognize and reward and incentivize us to do more?” said Anna Walker, Levi Strauss & Co. senior director for global policy and advocacy.

Walker offered the Oct. 6 comments at SXSW Eco, a conference in Austin, Texas, during a policy panel on sustainability practices and supply chain moderated by Bloomberg BNA.

“I think what will get more innovation, more creativity, more movement and direction of sustainable products will be to have a marketplace and a consumer base that really is asking for it, recognizing the brands and retailers that are doing it and rewarding them,” she said.

Environmentally Responsible Behavior

At a separate Oct. 5 forum discussing the ripple effect of sustainable value chains, panelists underscored the value of working together, adding that a sound business rationale existed behind environmentally responsible behavior.

“We can't do this alone, the issues are too complex, too global, we need to work together,” David Tulauskas, director of sustainability for General Motors Co., told Bloomberg BNA Oct. 5 following the panel.

For the last three years, General Motors has partnered on a supply-chain initiative with the nonprofit CDP, which each year collects corporate disclosures on climate change and a number of other topics on behalf of investors.

Lance Pierce, president of CDP's North America operations, said that although a corporation's decision to engage in sustainable behavior can stem from different places, sometimes it is “for their own reasons or because it's environmentally responsible.”

“I think the common element is that there's always a business case, it may be that the company does it because they believe it's the right thing to do, but there's always a business case element that goes along with the decision to do something like this because that's the way in which you can find use for the data internal for the company and begin to improve performance on the basis of that,” said Pierce.

Finding Collaborative Ways

Responding to a question on the challenges faced by General Motors in terms of developing a sustainable supply chain, GM's Tulauskas pointed to the data yielded by its relationship with CDP, including the gathering of “a lot” of life-cycle information.

“And what we've found is a lot of our big issues from a supply chain perspective related to greenhouse gas emissions and water usage is really in our tier-two and tier-three parts of our supply chain,” said Tulauskas, adding: “and we have a direct relationship with our first-tier suppliers so our biggest challenge is probably really trying to find collaborative ways to work with our tier-twos and their suppliers further down the line, because we have no real formal relationship with suppliers further down the supply chain.”

“I think the message is very clear that there are already companies like GM and HP doing that and there are great partners to work with that can create a transparent environment to help us know what we need to focus on and where,” said Tulauskas.

Addressing the value of focusing on and measuring carbon, Lee Ballin, head of sustainable business programs for Bloomberg LP, referred to a workplace dictum noting that the existence of operations by extension means the existence of not only waste, but a chance at improvement.

“If you have waste you have inefficiency and when you have inefficiency, you have opportunity, so that opportunity could be reducing carbon which in general will most likely reduce costs in your supply chain if you make the right investments in your operations,” said Ballin, stressing the importance of companies asking their supply chain partners to measure their carbon emissions.

“[T]hey will most likely identify opportunity in that measurement process—they'll identify areas of waste of inefficiency and where they can save money, which may flow towards you but will definitely flow toward their bottom line,” he said.

“You can't manage what you don't measure, so starting measuring it and then you can manage it and you can find that opportunity.”

To contact the reporter on this story: Paul Stinson in Austin, Texas, at pstinson@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com