‘Green’ Supply Chain Management: Where is it Going?

Driven by a wide variety of business sustainability goals and objectives, leading companies around the world are searching for value in greater supply chain transparency. Procurement organizations are now placing an emphasis on environmental and social responsibility actions within in the supply chain.   These companies are creating strategic sourcing and procurement guidelines to align supplier operations with business sustainability strategies.

Leaders, like Wal-Mart, are rolling out rating systems which assesses suppliers based on environmental and social criteria. Wal-Mart’s strategic sourcing process begins with a series of questions for potential suppliers, which address energy and climate, material efficiency, natural resources, and people and community.

Some of the supplier assessment criteria in Wal-Mart’s Sustainability Index include:

Energy and Climate – Reduce energy costs and greenhouse gas emissions
•    Measure corporate greenhouse gas emissions.
•    Report greenhouse gas emissions to the Carbon Disclosure Project (CDP).
•    Make greenhouse gas reduction targets publicly available.

Material Efficiency – Reduce waste and enhance quality
•    Report total amount of solid waste generated and water used at facilities.
•    Set publicly available solid waste and water use reduction targets.

Natural Resources – High quality, responsibly sourced raw materials
•    Establish publicly available sustainability purchasing guidelines for your direct suppliers that address issues such as environmental compliance, employment practices, and product/ingredient safety.
•    Obtain 3rd party certifications for any of the products sold

People and Community – Responsible & ethical production
•    Know the location of 100% of the facilities that produce products.
•    Evaluate quality of 3rd party manufacturing
•    Defined process for managing social compliance at the manufacturing level.
•    Work with the supply base to resolve issues found during social compliance evaluations to define specific corrections and improvements.
•    Invest in community development activities in the markets in which company operates or sources.

The recent emergence of sustainable supply chain management has provided companies with the opportunity to review processes, materials, and operational concepts from a different perspective. It incorporates the role of the environment in supply chain value creation. At Taiga Company, our sustainability consulting provides information and small business resources to clients of all sizes seeking to make incremental steps towards a sustainable supply chain.