Sustainability matures

Hard-baked cynics often scoff at what some see as “silly idealists” trying to drive sustainability into business. On the other hand, plenty of zealous young activists are quick to dismiss corporate efforts as PR stunts or “greenwashing”. Despite these intense prejudicial headwinds, social and environmental responsibility (SER – essentially synonymous with sustainability) in supply chain has made huge strides. Where once sustainability was like a fresh-faced kid full of hopes and dreams, today it’s more like an ambitious young professional getting on with things.

What gets measured gets done

I got a note this week from Pier Luigi Sigismondi, Chief Supply Chain Officer at Unilever, upon the release of his company’s Sustainable Living Plan. After spending a few hours trawling the data, I came away impressed by two things that show how much the movement has matured. First was the massive amount of measurement Unilever has brought to this effort. The company website provides 46 separate charts detailing the time series performance of everything from energy and water use to acidification and ozone depletion. The independent review protocols are intense. The willingness to listen and learn is obvious. This is not the behaviour of an adolescent trying to curry favour, but of an adult trying to get the job done.

The second thing that impressed me was the scope of the effort. Unilever’s plan includes literally everything. At the headline, its press release asserts that 36% of all agricultural raw materials are sustainably sourced. This includes things like palm oil, cocoa and fruit, but also paper inputs for packaging. Such things are not demonstration projects, rather they are the backbone of the business. Grown-up sustainability is not about proving that it’s possible, but about actually doing it.

To be fair, I also took the time to read Procter & Gamble’s 2012 Sustainability Overview. What I saw only reinforced the impression of social and environmental responsibility as a mature movement. P&G was similarly lavish with data and similarly sweeping in scope. Both these great consumer goods companies also show a grasp of the role they play in the world not only in their operations, but also in the products they bring to market and the impact they have on communities they source from. Sustainability is itself sustainable only if consumers and suppliers buy in. It helps when two mega-players like Unilever and P&G sing largely the same tune.

Here is a movement that is finally built to last.

In it for the long haul

Data from our annual Chief Supply Chain Officer report reinforces this perception of maturity. Between 2011 and 2012 cost savings, supply certainty and compliance jumped significantly as key reasons to invest in supply chain SER. At the same time, expectations of increased sales due to better SER dropped off substantially and brand image fell slightly in perceived importance. Respondents to the survey say in effect that they know it’s a long road and that the early days of feelgood sustainability are giving way to basic blocking and tackling for a leaner, cleaner supply chain in the long run.

The really good news in all this is that such maturity and commitment will be badly needed, since consumers seem to consistently drop the ball when it comes to putting their money where their mouth is. I recall a conversation with Keith Harrison during his tenure as Global Product Supply Officer at Procter & Gamble about the frustration of selling concentrated laundry detergent to consumers bent on buying big jugs because they seem like a better deal. Logistics savings, packaging savings and lower carbon emissions all seem pretty easy for the shopper to ignore at the “moment of truth” in the grocery store.

Demand-driven supply chains work very hard to give customers what they want. Sustainable supply chains must also master giving people what they need. And that takes a lot of maturity.

Kevin O’Marah
Chief Content Officer
SCM World
kevin.omarah@scmworld.com

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