It is now 20 years since the clothing industry, including and most publicly, Nike, was forced by public pressure to address the issue of unsustainable practices in its supply chain. The majority of the environmental impact of many companies is not within the company’s own operations and direct control but spread out along the supply chain. This, according to Zach Goldman of Malk Sustainability Partners, is particularly true of the IT sector. In his introduction to a recent report announced today, Mr Goldman says:
In an era of intensifying scrutiny of supply chains and increasing interest in triple bottom line management (people, planet, profit), understanding and effectively managing sustainability in the supply chain is a critical issue.
A key finding of the report is that almost 70% of IT managers surveyed believe that sustainable supply chain management creates business value.
sfllaw / CC BY-SA 2.0
At Green Business Watch we believe that strategies which positively affect each element of the triple bottom line are the strategies which will be the most compelling and effective. In this case, by targeting efficient procurement and management, IT supply chain managers are finding social, environmental and financial benefits.
The IT supply chain is long and complicated. There are concerns over labor, e-waste and compliance with the complex rules relating to conflict minerals.
- 34% of surveyed companies said that they were addressing supply chain issues in response to the concerns of investors and customers.
- 31% gave regulatory pressure as their main reason.
- 31% considered risk and cost management as a key issue reflecting:
an increasing understanding of the relationship between sustainability factors and cost competitiveness. Managers are leveraging efficient procurement to reduce operating, product, and compliance costs. Doing so has resulted in hundreds of millions of dollars in cost savings for some electronics companies.
The primary concern in the industry was labor, human trafficking and the difficulty of finding a balance between fair hours and optional overtime. Complex e-waste regulations (there are over 25 variations in the US alone) also provide a significant challenge for managers.
“The growing call for transparency of social and environmental impacts in the supply chain creates an opportunity for executives at IT companies. It has the potential to promote supply chain resiliency, enhance business continuity, reduce costs, and earnestly address customer concerns,” said Andrew Malk, Managing Partner of Malk Sustainability Partners.
Tim Mohin, Director of Corporate Sustainability at Advanced Micro Devices, states:
“This is our industry’s ‘Nike moment.’ We are heading for continued upward awareness and scrutiny on supply chain behavior.”
The full report is available at malksp.com