What an immense showing of commitment to sustainable procurement we witnessed Tuesday for Sustain16! Over 350 participants and speakers from almost every industry from chemicals to film production to air transportation to FMCG and everything in between. A wide diversity of roles were represented from CPOs, purchasing, and CSR directors alongside human rights advocates and industry experts. Every size from large multi-national purchasing organizations to small- and medium- sized suppliers and trading partners.
We all converged and exchanged best practices and inspiration to accelerate the pace of sustainability in supply chains worldwide. Here are some key takeaways that emerged along four themes:
Value Creation is not built on checkboxes
We were reminded by Rosey Hurst of Impactt to measure the upside rather than always obsessing about the risks. Upside is the direction of progress and positive engagement brings benefits which are substantially more effective and efficient than a pure compliance frame-of-mind. “No one says I love my job because we’re so compliant,” she noted, instead it is more attractive to “use employee’s brains” and skills in order to optimise and maximize company performance.
The inspiring talk from Andrew Winston, author of Green to Gold and more recently The Big Pivot, described the 75 trillion dollar cost the world will bear of not doing something about climate change, while at the same time highlighting $329 billion flowing into the solar energy market. Andrew went on to describe great examples of “decoupling” of emissions and negative CSR impacts from profitability and growth such as Nestlé’s 60% increase in production while achieving reduction of waste by 50% and GHG emissions by 14%, and their stock outperformed FTSE.
During the CPO panel, participants discussed the positive correlation between CSR score and business performance. Next, Toyota Material Handling presented their perspective as a supplier, and emphasized that procurement has a role to give incentives to best performers — “otherwise we’re just ticking boxes!”
Collaboration is the high-yield Investment
During the CPO panel, one participant noted that two-thirds of their costs are associated to external third-parties. There is enormous business value to be gained by applying a similar strategy as they use with internal resources — of engagement and collaboration — with third-parties and suppliers.
Coca-Cola Enterprises’ CPO David Cowell emphasized that the suppliers scorecard is only a tool, and that fostering exchange is vitally needed for innovation: They have proven they can get parties who ostensibly compete to engage in collaboration with one another on sustainability, for example through their supplier Carbon Challenge, and participation in Sustainable Agriculture (SAI) partnership.
Adecco encouraged the procurement community to educate their buyers on value of CSR and proactively launch joint projects.
Transparency’s new era emphasizes data-driven understanding
The concept of “radical transparency” described by Andrew Winston implores us to be courageous in “pivoting our vision”, and “tell the story” including revealing the challenges we face; It is the challenges that stimulate the conversations that lead to solutions. Although shame works well, its the data that matters, for example benchmarking of suppliers.
Technology is playing a central role in transparency. Sylvain Guyoton, EcoVadis’ VP of Research, noted the trends of open government, big data, business intelligence, and science-based objectives which are driving change in this space.
Ma YingYing of IPE reported an impressive 3 million downloads of the IPE app – Blue Map or 蔚蓝地图 in Chinese – which provides daily updates on pollution and emissions across 9,000 companies in China. She also emphasized the power that benchmarking has in driving change within brands, specifically referencing their joint report with NRCD, Greening the Global Supply Chain – CITI Index.
Ed Marcum of Humanity United illustrated examples of using mobile technology to bring forward the “live voice of workers” as a way to support in smarter decision making, improve worker conditions, drive innovation from bottom up and generally as a means to engage employees.
Keep Seeking the Breakthrough
As much as we feel we’ve accomplished, we must acknowledge that these conversations have been going on for decades: Are we moving fast enough? Even if our generation isn’t Andrew Winston emphasized that new generations – particularly the Millenials – are demanding new ways of living and working, for example they are three times more likely to seek employment with a company based on its stance on social/environmental issues. Rosey Hurst of Impactt gives us a simple mantra: “The best way to get something done is to do it”, but with the Drucker-esque discipline to always “measure to ensure impact”.
With all this inspiration, the next step is each of ours. How do you want your suppliers, your employees, your company, your life to be? Also consider how will you measure progress? How will you push to engage in radical collaboration and radical transparency – critical elements to accelerate your transformation? As Andrew Winston asked us all: “Will you be the hero?”