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US cousins please note: Sustainability is also social

Not just a green issue

This is a well-trodden adage, or even complaint. But as I sit here in a conference room in New York listening to some of the largest companies in the US talk about supply chain sustainability, I can’t help but be reminded of the title of this post once again.

Company after company on our speaking roster has presented important and increasingly sophisticated practices on how they are engaging, or more commonly, strongly suggesting to, suppliers, that they raise their game on the environment.

Minimising water use and carbon emissions is one thing. It’s usually associated with a clear business case. That’s great. But neglecting social concerns will not eventually lead to sustainability.

It’s not every company. Many here at the conference, such as Intel, take social issues very seriously.

But when two days of conversation amongst the leading companies is dominated by easily measurable (by comparison) green(er) issues, it’s clearly a worrying sign.

To be fair: As a company manager, you start where you have the easiest wins with the best made business case. Get the house in order first, then move onto the more complex issues. I understand that.

But many of the complex issues concerning environmentalists hinge on social issues: Deforestation is a consequence of corruption, poor institutions, legal enforcement and in some cases, poverty. These are all social issues. Simply cutting Asia Pulp & Paper out of your supply chain (as most attendees at the conference said yesterday they have already) will not be enough in the future.

Beyond tier one supplier water use, carbon emissions and toxic chemicals, companies are going to need to start understanding their role in the difficult social issues that affect their supply chain.

Partnering with NGOs and emerging market institutions will be one way to explore this.

For now, I’m impressed by what Intel, Bombardier, Kimberly-Clark, Kraft, PepsiCo are doing with tier one suppliers in terms of process management and standards integration

What will be much more interesting is when we realise that incremental greenery won’t cut it beyond a certain point.

That’s when we’ll start having those difficult social-related conversations that go beyond tick box social auditing.

I’ll be fascinated to see whether the European version of the conference described above is more about social issues than this one. I’ll report back on the blog during the conference itself.

3 Comments

  1. Did anyone there mention John Ruggie's work for the UN on human rights, which applies to companies and their supply chains? Just wondering how much traction it's getting out there.

  2. I think one person mentioned Ruggie in passing, but I got the very strong impression the conference attendees were not familiar with the human rights arena, with the odd notable exception.

  3. Not much then! GRI4 consultation could be a good opportunity for people interested in this to push them to embed it further – they've already made good progress on it.

    Feels like a slow start so far though.

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