In a recent paper, the consulting behemoth Accenture discusses seven factors that lead to “sustainability success.” (We will get to those seven factors momentarily.)
But the “ah-HA” of the report comes down to one fact: 37 percent of CEOs surveyed by Accenture as part of the recent UN Global Compact-Accenture CEO Study on Sustainability say their biggest headache involved “the failure to establish a link between their sustainability initiatives and business value.”
That percentage has risen from 30% in 2010, and 18% in 2007.
It Should Come as No Surprise
Of course, many companies have performed exceedingly well with their sustainability initiatives by deploying good old-fashioned business practices and/or leveraging strategies that have their roots in pragmatism, growth, differentiation, value and performance, technology, innovation, partnerships, collaboration, engagement and dialogue as well as advocacy and leadership (the seven areas, plus a few more, that the paper examines as contributing factors to “transformational” sustainability leaders).
Not all of any given company’s sustainability initiatives will have an impact on the bottom line. In fact, many of them amount to nothing more than, I dare say, marketing puffery.
So here’s a thought: should procurement act as a firewall between good and bad corporate social responsibility (CSR) policy, rather than just be the “yes man” for green supply chains?
In other words, have we reached a point where procurement should have a seat at the sustainability table to help develop the business case for various CSR initiatives?
For example, should procurement take a quantitative approach to assessing CSR-related supply chain decisions involving greenhouse gas emissions, carbon footprint, hazardous substances (e.g. lead-free), supplier diversity, labor practices, energy policy – coal, nuclear, natural gas, pipelines, conflict minerals and/or CAFE standards – to name a few?
President Obama said so himself with these famous words from his 2013 State of the Union address regarding greenhouse gas emissions: “If Congress won’t act soon to protect future generations, I will.” Undoubtedly many support that position, but reality dictates that regulations – many with “good intent,” including various sustainable/green policies – do create new, real costs.
Who within the company evaluates these cost impacts and voices concern when regulatory bodies open up the rule-making process for public comments? Who defends the bottom-line impact any given regulation may have on a company?
Procurement As Company Watchdog
Can procurement become the advocacy organization within a company that arms the lobbyists and marketing team with the cost and impact data to help shape the public policy debates (in the case of regulatory policy debates, merely influence the rule-making process)?
We would argue this does need to happen. A more politically active procurement function can help balance the strategic dilemma facing the growing number of CEOs who “fail to establish a link between their sustainability initiatives and business value.”
At the end of the day, sustainable development must truly be, well, sustainable.
What do you think? Leave a comment!