So those to me are some of the obstacles that are confronting global companies, and greening the supply chain is one response to that set of obstacles.

TH: Well, how do you overcome those challenges?

TY: I think where I would start is that every company that has global operations needs to construct its own value proposition. Within the corporate business objectives, within the corporate culture, there needs to be a plan. There needs to be a set of goals for how these companies are going to integrate sustainability into their business processes and objectives. That's where I would start because only when you integrate this with business objectives in a seamless way will you ever be able to continue a commitment to sustainable business practices. So that's where I would start.

I think also there's another way to recognize these challenges is (to) face a series of facts. One is green supply chain initiatives are a way to actually manage and mitigate your business risks because they give you more control of your own destiny if you are engineering risks out of your processes and products.

There're opportunities to reduce cost. There are opportunities to motivate your suppliers to perform better, and by doing so, you actually preserve your business continuity because if you're selecting suppliers that are performing well on sustainability indicators, chances are you're going to want to do business with those suppliers consistent with your economic needs. And so that actually helps you manage the complexity of your supply chain operations.

I'm seeing more evidence that companies are wanting to gain more control over their supply chain and that they're looking to use sustainability as a barometer for how to do this. I mean, I think that's what Wal-mart's trying to do in China right now. The CEO of Wal-mart was in Beijing with approximately 1,000 of its major Chinese suppliers announcing a series of commitments directly aimed at the supply chain.

And so I think this is an example of where a global company is trying to, first of all, state what the value proposition is of this green supply chain activity, link it to Wal-mart's overall corporate strategy, and then execute that strategy down across the supply chain. So I think that's a good example of how companies are trying to overcome some of the obstacles.

One other comment I'd make is a lot of attention is starting to focus on who the suppliers are -- the small- and medium-size enterprises in the majority of cases. These are companies that range from global organizations in their own right with many thousands of employees, all the way down to mom-and-pop operations where five people in the family are providing inputs into a business process and into a product.

So the variability and the complexity across these SME suppliers varies tremendously. I think one of the ways of overcoming challenges across the supply chain is increasingly to ask the question from the corporation's standpoint of how do we manage their supply chain in a way that delivers more value for the suppliers? Because ultimately what you want your suppliers to do is have incentives to perform better.

You can do some of that by issuing edicts from corporate headquarters, but a lot of this really depends on what's happening on the ground thousands of miles away from any corporate headquarters and having the management system and the incentives in place so that you're able to track what these suppliers are doing over time.

TH: Terry, what advice would you give to management overseeing these efforts?

TY: I think there're several lessons that we have learned at The World Environment Center from the work we have done in countries as varied as Romania, China, El Salvador, Brazil, Australian other places. One is that if you're going to have an effective greening the supply chain program, there has to be an on the ground capability in the countries where you're suppliers are located.

You cannot manage greening the supply chain initiatives in corporate headquarters. Can't be done, and I think maybe some companies are still under the delusion that they can issue some policy statement from on high and it will get carried out, but our experience is that a direct on-the-ground level of capability is really the place where you need to start because many of the suppliers do need training. They do need technical support in order to upgrade their systems and their knowledge of how to perform better. And I believe the catalyst in making this happen is, in fact, the global customer, the global company.

There are times when the global companies can find some very effective partners. We've been able to partner global companies together with the U.S. Agency for International Development or other multi-lateral organizations who share an interest in having emerging markets also be attractive areas for investment while implementing sustainability,

So, in addition to having this on the ground capability, I think partnerships are a very effective approach. A global company will not have all of the knowledge, all of the people in those emerging markets. And so it will by necessity have to look for other organizations to partner with, to provide services, to deliver information and the support so the supply chains achieve the objectives that the company wants.

I also think that another critical factor of success, and I couldn't be strong enough in urging senior management to recognize this, is that you have to work within the context of the local culture with local people. This is not something where Western-oriented companies can just impose their value system and their way of thinking on the SME suppliers. In many ways, I'm seeing evidence where the local suppliers are imparting knowledge that will inform the global company.

And so this is increasingly over time going to become a two-way street. But global companies need to work within the context of the local culture, local people, in order for this to be recognized as an increasingly legitimate activity that's going to benefit the SMEs in the emerging markets.

TH: What do you think, Terry, are the big take-aways here, if you could narrow it down to the three things that companies need to know about greening their supply chains?

TY: I think the three things that companies need to know about greening their supply chains are the following. One: We're not talking about philosophy. We're not talking about public relations. We're not talking about politics. Greening the supply chain is about dollars, it's about cents, it's about creating business value in a way that's aligned with sustainable development. We're talking about specific business processes that have to be managed as such.

The second take-away is that greening the supply chains should not be thought of as a series of one-off activities. Rather, what companies learn in one emerging market should be scaleable, should be transferable to other markets in other cultural settings. A global company has to have a processing place, a management processing strategy for knowing how to scale its supply chain activities to a much larger degree.

And a third take-away is that greening the supply chain really has to be a specific expression of a company sustainability strategy. That sustainability strategy, if managed in the right way, can differentiate a global company. It can produce an enhanced brand and reputation, but fundamentally, it also has to be aligned with the business objectives of the company -- to support the business strategy and to ultimately be able to communicate the results of greening the supply chain to your customers and to your stakeholders.

Tilde Herrera is associate editor at GreenBiz.com.