When you think about St. Patrick’s Day, what color springs to mind? If you didn’t answer “green,” you would be among a very small minority of people. Journalist Shaylyn Esposito (@ShaylynEsposito) reports blue is actually a more historically-correct color. She writes, “St. Patrick’s Day is the holiday when even the most recalcitrant American feels tempted to don green clothing or sip on some green beer. But what if everyone wore blue on March 17 each year instead? After all, the earliest depictions of St. Patrick show him clothed in blue garments, not green, and that when George III created a new order of chivalry for the Kingdom of Ireland, the Order of St. Patrick, its official color was a sky blue, known as ‘St. Patrick’s Blue’.”[1] Eventually, however, green became the unofficial color of the day thanks to shamrocks and the fact that Ireland is also known as the Emerald Isle.
Green is also the unofficial color of sustainability efforts. The Logility team writes, “Environmental sustainability in the supply chain is top of mind for consumers, and a brand that fails to hold itself responsible risks reputational damage that will affect the bottom line.”[2] According to Logility, there are six goals for environmental supply chain sustainability: Reducing energy consumption; improving waste; tracing and recovering products; using recycled content; efficiently using raw materials; and utilizing return and restore. With green being the order of the day, it’s a good time to think about sustainability efforts.
The Sustainability Business Case
In the past, sustainability initiatives have often been considered bad for the bottom line. After all, it costs money to try and reduce carbon emissions. That view, however, is rapidly changing. The Logility team asserts, “Sound sustainability and supply chain management processes mean that organizations can not only reduce their carbon footprint but optimize end-to-end operations for cost savings and increased profitability while satisfying consumers at the same time.” Bobby Miller, Senior Director for Design Solutions at LLamasoft, adds, “In the not too distant past, when confronted with a decision between investing in sustainability efforts versus corporate survivability, the choice was clear for most organizations. However, … consumers have expressed a desire for corporations to focus on these efforts, green supply chain practices are emerging again. Organizations not only view themselves as being able to ‘afford’ investing resources in ‘greening’ their operations but also see that these changes can truly benefit both the environment and their bottom line.”[3] He lists four benefits of a green supply chain: It’s good for the environment; it improves brand image; it enhances competitive advantage; and, it generates a healthier bottom line.
Stephen Cleminson (@stephenathale), Alliances Director at Ivalua, reports that a survey conducted by his company in the United Kingdom found, “87% of UK businesses see ‘greener’, sustainable supply chains, as a competitive advantage.”[4] The Supply Chain Quarterly (SCQ) staff notes, “There’s been a shift in the consumer mindset recently, especially among young people. The focus is less about getting products quickly and inexpensively and more about how companies can take action to address climate change. … As consumer mindset has shifted, so has the corporate mindset.”[5] In other words, in today’s business environment, a company cannot separate sustainability efforts from its overall business strategy. Unfortunately, the SCQ staff notes, “Costs are the largest barrier keeping companies from realizing their sustainability goals.”
Improving Sustainability
Samuel Wrest, a principal analyst at Sustainability Leaders asks, “Where should responsibility for improving corporate sustainability sit?”[6] It’s a good question. His answer, “While a rising number of organizations are appointing chief sustainability officers, many leaders will argue that businesses cannot isolate sustainability in a single function. To achieve their ESG targets, it must be embedded across every part of the business.” And, most experts agree that “every part of the business” includes everything from resource procurement to recycling. That’s why the Logility team insists sustainability efforts must begin with end-to-end supply chain visibility. They explain, “When you can clearly see what’s happening in your supply chain and trace the chain through all of its tiers, you have the visibility to detect and respond to issues before they occur.”[7]
The SCQ staff suggests that companies getting started with sustainability efforts can take a few important steps. First, they suggest a intra-company conversation take place. “Reach out to other departments about ways to collaborate on sustainability initiatives, and talk to your executive team to gain buy in.” Second, look for short-term wins. If a business case is going to be made, successes are essential. The staff notes, “You do not have to start with an elaborate long-term investment. Start with something simple like reducing inefficiencies within your own manufacturing facility or within your own carrier base.” Finally, the staff suggests going digital. They explain, “While reducing your paperwork is a great place to start, leveraging your technology will be key. It’s pretty difficult to reduce waste in your supply chain if you don’t have a tool that gives you visibility and transparency into what you are trying to do.”
If your company has already begun its sustainability journey, the SCQ staff suggests a few other steps on which it can focus. First, map out long-term initiatives. They write, “Make sure to put robust, aggressive goals in place.” Second, define and measure success. The late and well-known management consultant Peter Drucker is attributed with stating, “You can’t improve what you don’t measure.” The SCQ staff adds, “Key performance indicators (KPIs) should drive your sustainability process just like it does your on-time delivery and manufacturing through-put.” Finally, the staff asserts you should keep pushing your limits. “Set long-term goals, understand where you are going, and make sure you move the goalpost to drive improvements.” Wrest adds, “While many businesses set corporate ESG targets, it is less common for those targets to be turned into separate functional goals and for those functions to be incentivized to meet them. Translating corporate targets into specific team goals and building them into each function’s performance metrics helps embed sustainability into regular workflows.”
Concluding Thoughts
Journalists Meredith Somers (@MeredithSomers) asks a question many business leaders have probably thought about, “Is it up to business to save the planet?”[8] The short answer is, “No, not by business alone.” Everybody should be involved in saving the planet. Nevertheless, business does have a large role to play in this effort. Humankind’s industrial and economic activities have primarily created today’s environmental conditions and adapting those activities to save the planet is essential. There are limits to what businesses can do; however, doing something is better than doing nothing — and, doing something is certainly better than doing the opposite (i.e., increasing polluting activities). While doing something may sound easy, it’s not always a clear-cut decision.
Yossi Sheffi (@YossiSheffi), the Elisha Gray II Professor of Engineering Systems at the Massachusetts Institute of Technology, observes, “It’s easy to criticize a company that isn’t making environmentally-conscience business decisions, but it’s also unconscionable for a company to make a decision against the best wishes of its stakeholders.”[9] For example, fast food chains could ban the sales of burgers hoping to reduce methane emissions from cattle. But Sheffi notes, “They cannot stop selling beef unless their customers demand to not eat beef.” That’s why a business case needs to be made for sustainability efforts. While you’re thinking about going green, let me wish you a Happy St. Patrick’s Day.
Footnotes
[1] Shaylyn Esposito, “Should We Be Wearing Blue on St. Patrick’s Day?” Smithsonian Magazine, 17 March 2015.
[2] Staff, “Achieve the Environmentally Sustainable Supply Chain Consumers Demand,” Logility Blog, 17 September 2021.
[3] Bobby Miller, “The Business Benefits of ‘Going Green’ with Your Supply Chain,” Logistics Viewpoints, 8 March 2018.
[4] Stephen Cleminson, “How Green Supply Chain Strategies will help your Company Grow,” Ivalua Blog, 11 February 2021.
[5] Staff, “Today is the time to act on creating a sustainable supply chain,” Supply Chain Quarterly, 21 September 2020.
[6] Samuel Wrest, “Why companies must adopt a business-wide approach to sustainability,” GreenBiz, 16 August 2021.
[7] Staff, “The Business Case for Building Sustainable Supply Chains,” Logility Blog, 21 October 2021.
[8] Meredith Somers, “Is it up to business to save the planet?” MIT Sloan Management School, 3 December 2018.
[9] Ibid.
