Companies face a delicate balancing act these days. On the one hand, they’re under increasing pressure from customers, investors and industry watchers to become more transparent. On the other, they have to remain competitive while striving for sustainability. Balancing those different objectives isn't always easy. But many companies are developing innovative ways to get it done.
Understanding a company’s value chain is a crucial part of the process, said James Fava, senior director at sustainability consultant PE International, during a GreenBiz webcast on value-chain collaboration this week.
He described the chain as not only including upstream elements, such as manufacturing and processing, but also downstream pieces, such as retail use and disposal.“It is really critical to know that these exist,” he said.
A whopping 80 percent of management uses just 20 percent of the available opportunities to become more sustainable and create more value, he claims.
To take advantage of the untapped 80 percent -- and create a more transparent supply chain -- strategy is key, he said.
“It’s really important to know where you are and where you want to go,” Fava said. “This is really about how to understand your risk and manage your risk and [create] opportunities for the future.”
Everything else, such as management systems and decision support tools, all are centered on a company’s strategy, he said.
“A strategic implementation framework becomes paramount in how you’re going forward,” he said.
To illustrate where transparency and traceability is headed, Fava pointed to Patagonia’s Footprint Chronicles initiative. The outdoor clothing and gear company has made its supply chain public to help it reduce its overall environmental and social impacts.
With this initiative, the company is basically saying: ‘These are the good things we’re doing, and these are the bad things we’re doing, and asking for input how to do things differently,” Fava said.
How ThyssenKrupp became more transparent
For ThyssenKrupp, a multibillion-dollar German elevator company, sustainability means using all resources efficiently, including materials, people and procedures, said Brad Nemeth, the company’s vice president of sustainability.
In its effort to become more transparent, the first thing the company -- which has three manufacturing bases in the U.S., Canada and Brazil -- realized was that it needed to have some kind of a sustainability program in place, Nemeth said.
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