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Using sustainability to avoid risk

The SSC Team February 21, 2017 Tags: , , , Strategic Sustainability Consulting No comments

The evidence that sustainability can be good for business is overwhelming. Most of the case studies, examples, and analysis that has been done show positive links between a sustainable approach to environmental and social issues, and corporate profits, Thus far, the research has been primarily focused on direct operational efficiencies (like retrofitting your office lighting to save money and reduce your carbon footprint), innovation (using biomimicry to drive new product development), and productivity (ie. more engaged employees take less sick leave).

Over the past few years, there has been an increasing amount of discussion about the nexus between sustainability and risk management. And for corporations operating in complex supply chains in a globally-connected economy -- well -- effective risk management can be the difference between success and failure. Below, we take a look at three articles that shed light on why companies still struggle to incorporate sustainability into their risk management practices (and vice versa).

Has sustainability become a risky business? This GreenBiz article by John Davies reviews a report by Ernst & Young. The key takeaway: While more companies are concerned about increased risk and the proximity of natural resource shortages, corporate risk response appears to be inadequate to address the scope and scale of some of these challenges. The free report looks at six corporate sustainability trends with a strong focus on the internal influencers of corporate performance (CEOs and boards), as well as external forces ranging from governments to shareholders and investors.

Playing It Safe Is Riskier than You Think by Bill Taylor in the Harvard Business Review makes the case that "difficult and uncertain times are often the best times for organizations to separate themselves from the pack, so long as their leaders are prepared not to stand pat." While not directly about sustainability, this article certainly supports the notion that economic turmoil is no reason not to be ambitious about tackling big sustainability challenges.

Research: Why Companies Keep Getting Blind-Sided by Risk by Mary Driscoll in the Harvard Business Review presents fascinating insight into why companies (and their executives) are not succeeding at identifying and mitigating risk. Survey findings indicate that most organizations’ leaders did indeed express concern about the impact of political turmoil, natural disasters, or extreme weather. But the findings also show that the people at the front lines of the business were hamstrung by a lack of visibility into risk. Nearly half said they lacked the resources needed to adequately assess business continuity programs at supplier sites. Many relied on the suppliers filling out perfunctory, unreliable checklists. There are some big lessons here for sustainability practitioners! 

We are focused on helping companies use a "lens of sustainability" to spot risk earlier, broaden risk response options, and more effectively mitigate risk within their operations and all along their supply chain. If this work strikes a chord with you, please get in touch with us. We'd love to hear from you!

 

3 Ways to Engage Suppliers on Sustainability

The SSC Team November 15, 2016 Tags: , , Strategic Sustainability Consulting No comments

We would like to get more involved in including sustainability initiatives during our procurement process and the selection of supplier process.  We want to work with our procurement team on this. What are some of the methods other organizations and companies have used in engaging with suppliers with their sustainability initiatives?

-- Barry Enix | Buckman

 

 

The question above was posed on the 2Degrees platform for sustainability professionals. It's a great question, and one that we frequently tackle in our work with clients seeking to push sustainability beyond their direct operational boundaries.

Here's what SSC President Jennifer Woofter said:

I find that effective supplier engagement needs three components: a policy element, a program element, and performance element.

The policy element is intended to explain the expectations that you have for suppliers in the area of sustainability. A supplier code of conduct, for example, will outline which sustainability issues (labor, environment, human rights, grievance processes, health and safety, etc.) you expect suppliers to address and comply with. Inserting similar requirements into supplier contracts, RFP/RFQs, etc. will ensure that the policy has "teeth" and can be used in contract decisions.

Supply chain programs including training and capacity building -- for both the suppliers themselves, but also for your procurement staff. Do purchasing managers know what to look for in a "sustainable" supplier? Are sustainability aspects incorporated into new vendor evaluations? What kind of auditing, self-assessments, corrective actions, and negotiation tools are available on each side? Robust programs will ensure that your policy isn't just a document on a wall somewhere, but is an active expectation lived out in day-to-day decision-making.

The final component is effective performance measurement. Sustainability professionals like to say "what gets measured gets managed" and it's essential that any supplier engagement program have effective metrics. You might begin with simple measures like "how many suppliers responded to our survey" or "how many suppliers attended our sustainability training," but generally I advocate moving to more outcome-based metrics such as "how much did serious incidents decrease after suppliers participated in our safety training?" and "how many tons of carbon emissions were suppliers who engaged with us able to reduce (as compared to non-engaging supplier)?" These kind of indicators will give you a much better sense of how effective your engagement efforts are -- and give you insight into what new initiatives are most likely to give you the results you seek.

Want to see what other sustainability practitioners recommended? Read the entire discussion over at 2Degrees.

 

A Deeper Look at Sustainable Supply Chain Challenges

The SSC Team November 8, 2016 Tags: , Strategic Sustainability Consulting No comments

Enjoy this post from the SSC Archives.

Much of our work with clients is focused on tackling complex supply chain issues, so we're always on the lookout for articles that provide a fresh perspective, challenge a deeply-held belief, or shed light on an emerging topic. Today, we're highlighting three recent articles that really caught our attention. Enjoy!

Why aren't more tech companies tracking conflict minerals? "It may sound easy at first: Simply ensure that the metals within your brand's electronics are conflict-free. In other words, make sure that none of your gold, tantalum, tin or tungsten is sourced from mines that fund armed conflict in or around the Democratic Republic of Congo." So why aren't more companies ready to comply with the May 31 reporting deadline? This article provides superb insight into the challenges.

4 ways to make your supply chain more dynamic, resilient. "How do companies create 'dynamic operations'? Four capabilities underpin this practice, giving companies the speed, responsiveness and possibility to gain a competitive advantage when they face volatility in their markets." Sustainability planning is all about mitigating uncertainty, and the four tips presented here provide much food for thought.

When Bad Things Happen to Good Supply Chains. "The modern supply chain is much larger than suppliers and customers; it also includes suppliers’ suppliers and customers’ customers. All told, it encompasses a seemingly infinite set of variables and exposures, as any single failure anywhere in the supply chain can bring operations and profits to a standstill." A great primer on how sustainability-related uncertainty can ripple through a supply chain.

Want to gain more insight into some of the challenges facing suppliers?  Read our 2-part interview with Nate Sullivan of Efficiency Exchange (EEx), a provider of sustainability software and services to Chinese factories.Part 1 and Part 2.

 

Coordinating Across the Global Supply Chain is the Only Way to Truly Reduce Emissions

The SSC Team September 20, 2016 Tags: , , , Strategic Sustainability Consulting No comments

If you look at the Sustainability Consortium’s Greening Global Supply Chains 2016 Impact Report one way, the current state of reducing environmental impact from global industry appears terrible, at best. 

The 2016 impact report includes some essential graphic depictions of the state of supply chain emissions in 12 consumer industries, and if you flip straight to page 26, you might feel discouraged to see all of the red and yellow hues.

Glancing at some of the statistics – more than 60% of emissions are related to consumer goods, with the demand for consumer goods expected to increase by 2.5 billion people in the next few decades, and emerging economies still relying on forced and child labor to compete in the global marketplace –things look dire. 

But, if you really dig deeper into this fairly remarkable effort at comprehensively assessing global industry, there is hope.

With such a clear and direct look at exactly what is happening along each supply chain, no industry can hide behind a lack of data or claim that their own impact is insignificant.

Shining a harsh light on the true state of environmental and social responsibility progress, it becomes clear that every step along the supply chain is important, and every small move to reduce impact will add up.

Suppliers, manufacturers, and retailers, and consumers must work together move the bar – and this report demonstrates that everyone has a role and everyone should start to move their own piece.

The Sustainability Consortium recommends that suppliers offer a universal reporting tool to deliver to all customers. Both the purchasing party asking for a top-down report, and the supplier itself delivering a bottom up report, should work together as a team for the ultimate goals of reducing environmental and social impact and delivering sustainable goods.

Companies today being pushed to report on sustainability metrics and make meaningful change because of stakeholder demand should accept this as the new normal. And it’s always better to take control of the process rather than be pushed around. Suppliers and small manufacturers need to get in the driver’s seat and do their part to contribute to a sustainable supply chain instead of resist the change.

Are you a manufacturer or supplier contributing to the supply chain of the consumer goods industry and ready to jump out ahead on sustainability? Contact us for an assessment on how we can put together your sustainability report, keeping your organization ahead of the pack. 

EPA and Waste Management Webinar Recap: Putting a Price Tag On Emissions Reduction

The SSC Team August 16, 2016 Tags: , , , , , Strategic Sustainability Consulting No comments

Last Tuesday, GreenBiz hosted the first in a two part webinar series on the emissions impact of recycling and Sustainable Materials Management (SMM).

SMM can be generally described as active management of a product’s life cycle to reach sustainability aims.

The webinar began with an overview of the EPA’s work on SMM/LCA advocacy. Essentially, the EPA sees its role as advancing LCA and SMM as integral business practices. Because LCA and supply-chain work is so crucial to truly moving the bar on reducing emissions, it’s heartening to know that the EPA has made this a priority in their policy, oversight, and research work.

From lifecycle to the trash

After the EPA presentation, the talk shifted from life-cycle studies directly to the end of the life cycle and the work of Waste Management, the American comprehensive waste and environmental services company. Waste Management has undertaken a massive effort calculate the actual dollar cost of reducing emissions waste by method of disposal.

As a side note, the presenters did not do a great job of clearly making this transition from LCA work to emissions reduction cost calculating. But, it seems that the overall point was two-fold:

1.     Most organizations look at their carbon footprint – which is business operations – and what comes up most commonly is that the largest emissions source for most businesses is energy use. So, companies focus on energy reductions initiatives, essentially passing their product emissions - natural resources, product use, and product disposal –  onto suppliers and consumers. This needs to stop. More organization need to look up and down a product’s life cycle to really engineer, source and plan in ways that reduce the overall impact of the entire product to move the bar on sustainability.

2.     As organizations begin to engineer products with a focus on SMM, it would be helpful to know the GHG emissions resulting in end of life (i.e. GHG emissions of landfilling versus single-stream recycling) and the cost in real dollars of each of the processing methods. That’s where Waste Management stepped in.

Waste Management’s work calculating the price of reducing GHGs in the waste management industry delivers a cost per ton of GHG emissions through various waste processing techniques. (The most reduction for the lowest cost goes to – residential and commercial single-stream recycling!)

The Waste Management process, prioritization, and graphical representation on how they calculated cost/benefit is pretty fantastic. Definitely consider downloading the slides.

But questions remain.

How can organizations and policymakers work to reduce the cost of the other types of GHG emissions reduction technologies (e.g. anaerobic digesters)? Is there talk about subsidizing them? How can businesses be incentivized to use materials that can be sent into the low-emissions/low-cost single-stream recycling category and/or eliminate materials that can’t? Is there talk about banning certain materials? Are there waste processing technologies that need research funding that provide low-cost emissions reduction?  

Calculating cost and cost benefit is important from an engineering standpoint, but only if your organization is somehow incentivized or driven to engineer with the life cycle in mind. Without pressure – regulatory or otherwise- companies are still largely driven by the biggest incentive of all: producing products for the lowest actual cost and passing any environmental costs onto the planet, via the consumer.

Listen to the recap here, and log in today at 1pm Eastern for the second webcast, Setting Goals: Have We Reached the Limits of Recycling?, where presenters look at SMM through waste reduction efforts and give guidance on how to set effective waste reduction and recycling goals.

Are you ready to take a more advanced approach to understanding and reducing impact through a product life-cycle assessment? Check out our LCA overview information and contact us for a brief discussion of the benefits and challenges. 

 

Welcoming the New ASTM Standards for Manufacturing Processes

The SSC Team July 5, 2016 Tags: , , , , , , , Strategic Sustainability Consulting No comments

At SSC, we have been calculating environmental impact in manufacturing processes using process flow diagramming for years. When conducting life-cycle assessments, process-flow diagramming provides a visual and a data-based representation of every input and output in a manufacturing process to achieve the most accurate results. 

But mapping manufacturing processes becomes difficult because of the wide variety of technologies, inputs, outflows, variations inside of a single facility or lack of information from upstream or downstream. Additionally, the standards and software tools used to calculate processes can vary in their accuracy and be limited in their flexibility, unable to adapt to a wide variety of industries.

Complexity is par for the course when determining environmental impact of a manufacturing process.

The newly released ASTM International standard for calculating the environmental aspects of manufacturing processes (ASTM E3012-16), developed by the National Institute of Standards and Technology (NIST), promises to be a step forward in guiding sustainability professionals through a systematic and more comprehensive, yet flexible, way to calculate environmental impacts based on a graphical process-flow modeling.

NIST systems engineer Kevin Lyons, who chaired the ASTM committee that developed the manufacturing sustainability standard, describes it as similar as tracking financials. “You have to gather income and expenditure data, run the numbers and then use the results to make smart process changes — savings, cutbacks, streamlining, etc. — that will optimize your monthly budget,” he said. “We designed ASTM E3012-16 to let manufacturers virtually characterize their production processes as computer models, and then, using a standardized method, “plug and play” the environmental data for each process step to visualize impacts and identify areas for improving overall sustainability of the system.”

The updated database will help standardize terminology and structure of mapping and reporting manufacturing process impact, reducing complexity in mapping manufacturing processes, and thereby helping companies fully and accurately understand environmental impacts and work toward reducing them.

Are you ready to begin your product life-cycle assessment? Contact us for a quick briefing on whether your company would benefit most from a highly detailed analysis to broad-strokes, baseline assessment. Understanding your impact may not be as big of an investment as you might think.

 

 

 

Welcoming the New ASTM Standards for Manufacturing Processes

The SSC Team July 5, 2016 Tags: , , , , , , , Strategic Sustainability Consulting No comments

At SSC, we have been calculating environmental impact in manufacturing processes using process flow diagramming for years. When conducting life-cycle assessments, process-flow diagramming provides a visual and a data-based representation of every input and output in a manufacturing process to achieve the most accurate results. 

But mapping manufacturing processes becomes difficult because of the wide variety of technologies, inputs, outflows, variations inside of a single facility or lack of information from upstream or downstream. Additionally, the standards and software tools used to calculate processes can vary in their accuracy and be limited in their flexibility, unable to adapt to a wide variety of industries.

Complexity is par for the course when determining environmental impact of a manufacturing process.

The newly released ASTM International standard for calculating the environmental aspects of manufacturing processes (ASTM E3012-16), developed by the National Institute of Standards and Technology (NIST), promises to be a step forward in guiding sustainability professionals through a systematic and more comprehensive, yet flexible, way to calculate environmental impacts based on a graphical process-flow modeling.

NIST systems engineer Kevin Lyons, who chaired the ASTM committee that developed the manufacturing sustainability standard, describes it as similar as tracking financials. “You have to gather income and expenditure data, run the numbers and then use the results to make smart process changes — savings, cutbacks, streamlining, etc. — that will optimize your monthly budget,” he said. “We designed ASTM E3012-16 to let manufacturers virtually characterize their production processes as computer models, and then, using a standardized method, “plug and play” the environmental data for each process step to visualize impacts and identify areas for improving overall sustainability of the system.”

The updated database will help standardize terminology and structure of mapping and reporting manufacturing process impact, reducing complexity in mapping manufacturing processes, and thereby helping companies fully and accurately understand environmental impacts and work toward reducing them.

Are you ready to begin your product life-cycle assessment? Contact us for a quick briefing on whether your company would benefit most from a highly detailed analysis to broad-strokes, baseline assessment. Understanding your impact may not be as big of an investment as you might think.

 

 

 

White Paper Profile: Shifting the Focus from End-of-Life Recycling to Continuous Product Lifecycles

The SSC Team June 21, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

Just because a product is recyclable, doesn't mean it is going to be recycled by the end user, nor does it mean that the organization can write off any responsibility of the management of products at their end-of-life. 

End-of-life issues present an important challenge to organizations, from facilitation of recycling and measuring effectiveness of recycling programs, to shifting to continuous use models. 

"Recycling should not be looked at in a vacuum but as part of a larger system where costs and the release of greenhouse gases and toxics, among others, inhabit."

Learn more about the challenges of product lifecycle management at product end-of-life in this white paper by Call2Recycle.

Life cycle assessments are an important way to view the full impact of your product's sourcing, production, distribution, and disposal, often leading to the discovery of hidden opportunities to reduce waste or mitigate risk as a result the process. Contact us to get started on your LCA. 

 

White Paper Profile: Shifting the Focus from End-of-Life Recycling to Continuous Product Lifecycles

The SSC Team June 21, 2016 Tags: , , , , Strategic Sustainability Consulting No comments

Just because a product is recyclable, doesn't mean it is going to be recycled by the end user, nor does it mean that the organization can write off any responsibility of the management of products at their end-of-life. 

End-of-life issues present an important challenge to organizations, from facilitation of recycling and measuring effectiveness of recycling programs, to shifting to continuous use models. 

"Recycling should not be looked at in a vacuum but as part of a larger system where costs and the release of greenhouse gases and toxics, among others, inhabit."

Learn more about the challenges of product lifecycle management at product end-of-life in this white paper by Call2Recycle.

Life cycle assessments are an important way to view the full impact of your product's sourcing, production, distribution, and disposal, often leading to the discovery of hidden opportunities to reduce waste or mitigate risk as a result the process. Contact us to get started on your LCA. 

 

3 Sustainability Tools that got our Attention in 2015

The SSC Team January 7, 2016 Tags: , , , , , Strategic Sustainability Consulting No comments

We appreciate good calculation tools. We are constantly looking for the most comprehensive or best combinations of calculation tools to cross check and ensure our clients are getting the best possible data. 

Here were three tools that got our attention in 2015:

GCSP-ITC Quick Scan Tool – Launched in June, this open-source tool allows companies to compare their compliance policies against best practices in order to inform improvements in supply-chain management. Provided by the Global Social Compliance Programme (GCSP), it is open to GCSP members and others free of charge.

  • How it works: Buying companies can identify standards others use in purchasing. Suppliers can create a self-assessment, benchmark the assessment against peers, and identify immediate steps to move toward best practice.
  • Who should use it: Anyone with a medium to lengthy supply chain or who is a supplier.

Water Risk Valuation Tool – Launched in September by Bloomberg ESG Data and Tols, this calculator illustrates how water risk can be valuated in corporate mining valuation models. Based on the gold and copper mining industries, this tool can inform all mining companies on how water risk might effect earnings and operations.

  • How it works: The tool models potential “asset stranding” based on estimated future water scarcity and risk factors related to that scarcity.
  • Who should use it: Mining companies, especially in precious metals

RiskHorizon – Launched in October by Anthesis Group, this web-based toold quantifies and monetizes environmental, social, and governance risk over 25 political, economic, social, and environmental areas, aggregating 100 different datasets.

  • How it works: The tool is designed to help “futurecast” risks and opportunities in assets, supply chain, and business model and then quantify and prioritize the value of that risk. A big job.
  • Who should use it: Investors, risk management professionals, supply chain managers, and strategic leaders should all be interested in a company’s risk profile.

One thing to remember - data out of context or too generalized really won't do anyone any good. Ensure you're working with a sustainability professional that can help validate and contextualize your data in your reporting process and sustainability planning programs.  

Have you used a calculator, but aren’t quite sure how to take action on results? Let us know. We can help assess your findings and customize a plan to help your company align with best practice in sustainability.