Business Pressures Driving Change and Innovation in the Supply Chain

Filed under: 1sdn,Sustainable Supply Management | |

green supply chain pressuresAndrew Winston, founder of Winston Eco-Strategies, kicked of day two of the Sustainable Brands 2010 conference with an informative talk on how the difficult environmental, economic and supply challenges that business and industry face, have changed that game and how those challenges are presenting opportunities.

by Julie Urlaub , Founder and Managing Partner of Taiga Company. Follow Julie on Twitter @TaigaCompany
Andrew Winston, founder of Winston Eco-Strategies, kicked off day two of the Sustainable Brands 2010 conference with a wealth of information. Winston is the author of Green Recovery, a strategic plan for using environmental thinking to survive hard economic times and the co-author of Green to Gold, the best-selling guide to what works – and what doesn’t – when companies go green.

According to Winston, one of the biggest environmental challenges this year is energy: “Where are we going to get our energy from?” Seventy-five percent think humans are behind global warming and five of the greatest sustainability challenges we currently face are: chemicals and toxins, biodiversity, water, energy, and climate change.  US Chamber of Commerce says biz opposes climate policy-but the market for climate change and environmental technologies is forecasted at $2 trillion. GE now earns more revenue from wind turbines than from gas turbines. China is spending $9 billion on cleantech a month; whereas the US spends that a year after stimulus. The US is losing 12 to 1.

What does he think is needed?  Transparency.

“Transparency is one of the driving forces keeping the green and sustainability waves moving,”  says Winston.

It’s a theme he touches on in his new book, Green Recovery. He believes that we’re rapidly entering an era of radical openness, driven both by regulation and the rising demands of employees and customers. (See Rising Transparency — One Way to Avoid Massive Market Failure.)

Andrew recommends giving Good Guide your organization’s data. Founded in 2007 by Dara O’Rourke, a professor of environmental and labor policy at the University of California at Berkeley, GoodGuide is a web based rating and recommendation engine. The site provides authoritative information about the health, environmental and social performance of products and companies so that consumers make purchasing decisions that reflect their preferences and values.

Many companies are starting to set tougher standards for their suppliers. Companies such as IBM, P&G, Pepsi, Ikea, Ford, and Kaiser Permanente are leveraging the supply chain as a means to getting involved in sourcing and telling each other how and where they can source. This takes us back again to transparency. It’s about taking life-cycle data and publicizing it. Interesting how big success stories aren’t covered in the news. With these high profile companies raising the bar, other large value chains will feel pressured to do that same if they want to remain competitive. Winston feels this trend will impact companies of all sizes in every sector.   For instance, WalMart will no longer source beef or soy from cleared Amazon land. It was a big story, but nothing was mentioned in mainstream press.

Additionally, the Carbon Disclosure supply chain group is asking for more disclosure on carbon.  P&G and IBM are both requiring data and transparency of environmental management systems of suppliers. The data requested is not only for transparency but also to “cascade” it to their suppliers. Pressures are coming from business and those pressures are more powerful than governmental intervention. The result? These are ripples profoundly changing business in upcoming years. In fact, 58% of big companies are poised to deselect suppliers based on carbon exposure.

Andrew asks compelling questions of business. “How can our products improve our environment?” How can Base of the Pyramid (BOP) be a source of innovation to the rest of the world? Innovation upward is the change we need. According to  Winston, by focusing on the bottom of the pyramid, firms are coming up with entirely new ways to provide products and services.

“More companies will realize that a “bottom of the pyramid” strategy isn’t just about serving a new market; it can help you radically rethink your business, said Winston.  “It’s a dramatic new source of innovation,” He added.

Additional Resources from Andrew Winston

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Author: Julie_Urlaub (7 Articles)

Julie Urlaub is Founder and Managing Partner of Taiga Company, a sustainability consulting firm located in Houston, Texas dedicated to accelerating the integration of sustainability concepts in business and daily living. Julie leverages over 15 years of Consulting and Business Development experience in Energy Management Services, Oil and Gas, Medical, and Information Technology industries. Today, as a sustainability consultant, Julie speaks, writes, and advises clients on a variety of issues related to the intersection between environmental stewardship, sustainable business practices, and sustainable living. Visit Taiga Company's website www.taigacompany.com