Three Big Supply Chain Trends for 2011, Part 2

Tensions between countries are often mirrored in the competing “technical cultures” of product and corporate sustainability.

In 2010 several companies embraced the sustainable product as compelling on many levels, because the concept implies a link directly with the consumer experience: It offers choice, the engine of market-driven change, and therefore potentially competitive advantage if consumers or customers choose the more sustainable product; and it mobilizes a holistic value chain perspective requiring designers and sustainability professionals to look at the entire product lifecycle if they are to take informed action and support valid claims to the market.

On the other hand, several high-profile product manufacturers came out squarely against a product focus, making the case that there is a rather obvious reputational risk if a company introduces a “green product line” while failing to address sustainability in all its operations. Consumers are baffled by sustainability information and, in fact, by any “excessive choice” at the product level in general (hotly debated with research articles for and against this hypothesis). Finally, they argue that measuring individual product sustainability is too time consuming and complex to even consider as a credible exercise on any scale.

These supposedly competing perspectives should, of course, be complementary and hence should find strong resolution in 2011. The most often quoted of the “barriers” to assessing product sustainability is the belief that it must involve multiple lengthy lifecycle assessments. Companies with very large product portfolios understandably baulk at the cost and time required for this but then sometimes falter at how to address this crucial dimension of their sustainability profile in a credible and rigorous way.

Happily, there are now several robust approaches, which have mobilized the lifecycle modeling capabilities and lifecycle inventory data, and then connected these to the product design process. The result is a reusable, flexible, but technically rigorous lifecycle model that puts the controls directly in the hands of the designer. This “democratization of sustainable design” was a major theme of the 2010 Life cycle Assessment and Product Design European Conference in December, and I expect it will go a long way to enabling a new wave of product sustainability activity in 2011.

Once cultural and technical differences have been resolved, we can always count on that enduring theme of corporate life: departmental divisions. Little surprise then, that in 2010 we still had corporate social responsibility departments dealing with social issues and environmental departments dealing with the greening of products and sustainability. These two tribes would then place their requirements before other departments, like procurement, which would have to attempt some kind of integration.

Worryingly, the green and the social agendas often failed to find common cause unless it was at the most basic level of compliance. Some exceptions were found but often in the most complex and challenging cases: In 2010 the OECD published its “Draft Due Diligence Guidance for Responsible Supply Chains or Minerals from Conflict Affected and High Risk Areas,” to give brands some guidance on how to approach the risks of sourcing minerals from conflict zones where artisanal mining results, not just in environmental abuse, but also in extreme social dislocations, often including appalling abuse of civilian populations. This issue also showed how sustainability issues can rapidly escalate into potential scarcity of supply problems if left unresolved, as the threat of banning minerals from these geographies raised its head amongst politicians.

Seeds of integrating social, environmental, and commercial dimensions were sown in some organizations in 2010 with the appointment of senior champions for sustainability, variously called "Chief Sustainability Officers" or "VPs of Sustainability." These roles unite the skills, experience, and authority to join up the elements of this smorgasbord of issues in a way that has been sorely lacking to date. It will be exciting to see in 2011 how the new crop of these leaders deals with bringing together the three legs of the triple-bottom-line stool. At worst, they will simply avoid adverse tradeoffs among the agendas, but hopefully they will be able to identify real synergies among environmental, social, and commercial agendas.

One wonders, for example: Which organizations will take major new investment decisions about the location of new production sites in their supply chains based on careful consideration of both social and environmental impacts? Which suppliers will harness new technologies to increase productivity and grow new, higher-level skills in their employees? Who might tackle the increasingly stinging issue of scarcity of supply of specific elements in a way that mobilizes the social and environmental agendas at the same time?

Maybe you have seen some of these things already in the past, but if you see them again in the early months of 2011, be sure to give them a nudge in the right direction.