Green Supply Chain

Unilever's chief procurement officer Marc Engel has promised to be "relentless" in driving the company's efforts to reach its goal of sourcing 100% of raw materials sustainably by 2020. Engel said that cross-sector partnerships would be critical to "create real impact and move things forward at scale" on this front. "We cannot move the needle alone." Their vision is also evolving - no longer purely focused on halving their environmental impact but also simultaneously enabling positive social impact. 

The retailer has made a donation to establish a training centre to give clothing manufacturers in the country training on fire, health, workplace safety and environmental issues. This follows the fire at Tazreen in December 2012, which was not an authorised supplier, but had been subcontracted by a vendor without permission. The new academy will train 2,000 Bangladeshi factory managers, with a strong emphasis on creating opportunities in the workplace for women.

Some tips on improving supply chain management: 1. Set a code of conduct with clear, realistic expectations and communicating this to suppliers first. 2. Take a risk-based approach, identifying the high risk areas to tackle first. 3. Build strong relationships with suppliers, offering support for long-term business. 4. Participate in joint initiatives - this is a highly effective way to create change. 5. Empower the supplier who holds the direct relationship with companies further down the supply chai, and ensure you ask relevant, searching questions of your first tier suppliers. 6. When evaluating new suppliers, use credible, industry-standard scorecards, reinforced by mandatory data-sharing on carbon, environmental and social performance. 7. Engage with NGOs and local groups to take advantage of their expertise and networks.

Virgin Atlantic Airways is to give the Sustainable Restaurant Association open access to its global catering supply chain to identify ways to improve sustainability. Through the partnership, the SRA will measure Virgin’s supply chain against 14 criteria, such as water use, waste management, energy efficiency and fair trade products. Reuben Arnold, director of customer experience at Virgin Atlantic, said: “Value for money and quality of product are of course hugely important factors, but our passengers now rightly demand that we look beyond that, and ensure we are making the most sustainable choices. The SRA ratings will allow us to understand how we and our global suppliers are performing on this front, and how to work closely together to drive improvements.”

Unilever announced it is sourcing now more than a third of its agricultural raw materials sustainably, significant progress towards its target of 100 percent by 2020. However, CEO Paul Polman said last year, “If we achieve our sustainability targets and no one else follows, we will have failed.” How can the company do better to inspire others? Primarily by connecting the dots between their initiatives to concrete outcomes in reducing climate change and water scarcity, and by showing how their actions have actually improved their business in reducing risk and costs.

It's no longer just a case of being less bad, to stay socially relevant, businesses need to give back more than they take. Net positive shifts the sustainable business mindset from simply reducing impacts to restoring nature and strengthening society. Kingfisher and IKEA aim to create more forest than they use in product; Coca Cola aims to return as much water to nature as it uses in its products and their production; BT wants to help consumers cut carbon by at least three times the full carbon impact of its business by offering greener products. Companies should focus these efforts on their most material impacts, be ambitious, measure the change, create a narrative that consumers connect with, and focus on behaviour change of their customers.

US healthcare organisations could save between $20 and $60 billion dollars through modest reductions in supply costs. Not through canned solutions and cost avoidance, but through close alliance between operations and finance to make small adjustments and improve efficiency. Automation should only be used if it will fit into existing operations immediately and it is flexible for future needs. Rather than across the board cuts, look at actual patient needs and realign nursing purchases to meet that need exactly. The nurses are the customer - design systems to make their job easier.

Levis convened meetings in Cambodia with suppliers, NGOs, and other brands to promote worker well-being in five core areas: economic empowerment, good health and family well-being, equality and acceptance, educational and professional development, and access to a safe and healthy environment. Some suppliers have had success implementing worker programs such as free medical care and transportation, but the challenge is bringing such efforts to scale. Companies like Levi's can push initiatives from top-down, but to be successful suppliers and the local community must own them and realise that 'employer of choice' is closely aligned with 'supplier of choice.'

In 2001, a Sony shipment was stopped from being sent to retailers due to concentrations of cadmium, but with a lack of transparency in their supply chain it took Sony 18 months to identify the source. They have since improved the supply chain vetting process by implementing a 'business scorecard' that provides clear supplier selection criteria and evaluation model including sustainability

Small and midsize enterprises (SMEs) have often left sustainability efforts to big corporations, but they can also find benefits from improved buyer relationships, employee engagement, and saving money. GE offers 5 key tips to addressing the supply chain: collaboration, keeping it simple, showing your commitment through transparency, gaining employee buy-in and partnering with industry groups.

A new, more ethical certification system will soon be made available for the smartphone, helping to drive up social responsibility into their manufacture. Examples of the standard’s criteria include: manufacturer commitment to international labour conventions; reduction of hazardous substances, such as heavy metals, beryllium, nickel and phthalates; energy efficiency; and ergonomic design. The new certification criteria set is available in draft format for public and stakeholder comment during this month, with an estimated publication date of mid-May

Yum! Brands has pledged to ensure its packaging is not knowingly made from illegal or unwanted fibre sources and give preference to suppliers that have been verified by third parties. This follows a campaign by Greenpeace last year about fibre from Indonesian rainforests used in KFC's buckets. The company hasn't set any specific targets, but promised to have a plan in place by 2014 and set out its principles to exclude wood harvested in a manner that violates human rights, that violates local or international laws, where the source forest is unknown and from forests that have been converted to plantations. It also said certified fibre would be preferred and increased.

The Australian retailer plans to buy milk directly from farmers in a trial to build stronger relationships with the supply chain. The company believes the approach will mean a better deal for farmers, enabling them to cut out the margin taken by intermediaries. Assuming the trial goes ahead, Woolworths – the largest supermarket and grocery chain in Australia – expects be taking delivery directly from farmers by the middle of 2013. It will be the first supermarket in the country to do so.

Several tech and health care companies in Silicon Valley are saving time, space and materials by using reusable packaging, especially limited-life transport packaging materials such as cardboard boxes, wood pallets and plastic stretch film. Replacements have included reusable, nestable crates, reusable tarps, biodegradable paper tape and recyclable crinkled paper. The environmental benefits are clear in reducing 31 million tons of cardboard boxes and nearly 6.4 million tons of non-durable plastic disposed annually, but organisations also found savings on labour, costs and storage space.

Horsemeat is usually free-range, a good source of iron and produces less methane than beef. Perhaps we should consider rethinking our eating preferences, as 18% of all human-produced GHG emissions result from meat production. Cows are some of the worst, emitting methane which is 25 times worst than carbon dioxide. But eating preferences are deeply rooted - it's time to reconsider and rebrand vegetables and sustainable sources of meat.