Inside Supply Management Magazine

Driving Value Through an Expanding View of Sustainability

November 18, 2019
By Sue Doerfler

For today’s companies and their supply management organizations, sustainability encompasses not only environmental concerns and practices — it covers ethics and business conduct, health and safety, and diversity. And as they seek to increasingly meet customer and stakeholder needs and wants, this expanded view of sustainability will become even more of a driving force to value.

Nearly three-quarters (74 percent) of companies have sustainability goals in place and 48 percent have integrated them into daily operations, according to A Supply Management View of Sustainability, a recent white paper by Institute for Supply Management® and Boise Paper. Larger corporations — those with 10,000 or more employees — are more likely than smaller companies to have sustainability goals in place, the report found. Additionally, manufacturing companies are more likely to have such goals than non-manufacturing ones.

In developing the white paper, nearly 800 survey respondents were asked about such topics as their companies’ sustainability goals, how they evaluate environmental impact, why they work with U.S-based suppliers, and health and safety in their supply chains. The white paper examines their answers with respect to the three sustainability pillars of social responsibility, environmental impact and economic awareness, as well as several of the 11 attributes of the ISM Principles of Sustainability and Social Responsibility.

Ethics and business conduct, followed by health and safety, are considered by respondents to be the most important of the 11 sustainability attributes — and are given the highest priority by their companies. A large majority (83 percent) of respondents say that an internal code of conduct policy has been established, communicated and tracked at their companies. Additionally, respondents cited ethics and business-conduct training completion rates as an important measure.

The same percentage — 83 percent — say their companies have health-and-wellness initiatives and programs. Other frequently cited health-and-safety measures are (1) safety policies and practices that are communicated and enforced, (2) monitoring, reporting and root-cause analysis of accidents and injury rates and (3) safety training completion rates.

The environment was ranked as the third highest priority, with hazardous-contaminant screening cited as the most important method of evaluating environmental impact. Other methods mentioned: sustainable sourcing operations, third-party certifications, solid waste volume production levels and energy expenditure.

Regarding the economic pillar, findings include:

Sustainably made products are important to companies: Between 48 and 67 percent of respondents say they would pay more for the most common spend categories — like capital equipment, office supplies and manufacturing components — if they were offered sustainably.

U.S.-made products also resonate with today’s supply managers. Generally, half or more of respondents say they are willing to pay more for such U.S.-made products as manufacturing components/materials, packaging, capital equipment, electronics and electrical components, chemicals, and paper.

Four in 10 respondents say their company prioritizes working with U.S.-based suppliers “very often” or “always.”

Today’s companies and supply management organizations are broadening their view of sustainability to not only include environmental impact, but business conduct and ethics, health and safety and other areas. And as they do, they are meeting stakeholder and customer needs as well as improving their bottom line.

“Sustainability only continues to grow in importance for consumers, the companies that serve them and the supply management function that orchestrates the company’s sustainable policies, processes and performance,” ISM CEO Thomas W. Derry says in the white paper. “And a great track record in sustainability is linked to higher revenues, profit and company valuations. It’s here to stay.”

About the Author

Sue Doerfler

About the Author

As Senior Writer for Inside Supply Management® magazine, I cover topics, trends and issues relating to supply chain management.