How green is your supply chain?

If business is so concerned about green issues, why is it not trying harder to reduce the impact of supply chains?

by
Last Updated: 06 Nov 2012

These days, you’d have a hard time finding a CEO who would admit to being unconcerned by green issues. It would be bad for the corporate image – as borne out by a new report by consultancy BearingPoint, which showed that 83% of big companies claim to be putting green issues at the heart of their strategy.

The problem is, not many of them seem to be paying much attention to their supply chain, the process of getting its products and services to customers, which is usually one of the most polluting aspects of any business. BearingPoint found that only a third had any kind of ‘green supply chain’ policy. And the problem seems to be worst in the West – just a quarter of US companies and 45% of UK firms are thinking about greener supply chains, while in Japan the figure was 100%.

According to green campaigner Jonathan Porritt, this proves that most companies are ‘not really serious about addressing today’s corporate responsibility challenges’ – in other words, ‘going green’ tends to be more a PR stunt than an attempt to address the underlying issues.

So what’s their excuse? The most common answer to this question was not cost but ignorance – a lack of information about regulation and best practice. Blaming the government is always an easy way out, but clearly there is some room for improvement in how this kind of information is communicated.

The good news is that this is not just a CSR issue – it’s increasingly a financial one too. Companies have to be perceived as green now or it will damage the brand, which will hit them where it really hurts – in the pocket. And new supply chain initiatives can trim operating costs as well as win hearts and minds. This is likely to be a powerful catalyst for change, even if ethical concerns are not.

In fact, this idea of ‘greenwashing’ is becoming a dangerous game as we all get more savvy about what a company’s really doing to offset its environmental impact – so those companies that take green issues seriously are likely to reap the rewards in the medium term...

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today