Corporate Social Responsibility and the procurement process

February 10th, 2009

Beyond food and product safety, this author has posted more than ten blogs in the last nine months on Social Responsibility in the supply chain and reinforcing it in the procurement process.

The following is taken directly form a great website ?The CPO Agenda? and specifically from an article ?How the Stars Shine Brighter?. The entire article is a great read as to the positive impact that best in class procurement companies can have on their company?s results even during these tough economic times. The specific information I found interesting was a sub section that relates directly to yesterdays post on supplier score cards and is titled.

Sustainability and corporate responsibility.

These have emerged as significant issues for the procurement function and are now factored into most companies? corporate goals. However, there is still a long way to go until these goals are formally embedded into procurement strategies. Finding the right balance between economic viability, environmental awareness and social well-being is a significant challenge, but a competitive advantage can be gained by companies that locate intersection points for all three.

For Wal-Mart, sustainability has broad economic and social components, including healthcare, economic opportunity and the quality of life of the people who make the products it stocks. The company?s commitment to sustainability centers on three aggressive goals: to be supplied 100 per cent by renewable energy, to create zero waste, and to sell products that sustain natural resources and the environment. The key focus areas for its sustainability efforts include paper, packaging, textiles, jeweler, electronics and chemical-based products ? categories selected based on a combination of consumption and the volume of product sold.

Wal-Mart helps its suppliers to develop goals and set expectations, assist with knowledge around sustainability practices, and evaluate and manage results. Suppliers are expected to ?do right? by workers and the environment, examine the entire product lifecycle in order to develop sustainable merchandise and significantly increase energy efficiency throughout the supply chain, especially in the area of logistics and shipping.

Key scorecard metrics include greenhouse gas emissions produced during manufacturing, the product-to-packaging ratio, packing cube utilization, recycled material usage, renewable energy use at supplier facilities and raw material recovery rates. The involvement and commitment of the world?s largest retailer toward sustainability practices throughout the supply chain will accelerate the rate at which many companies come to adopt sustainability-focused practices.

As always, we appreciate and look forward to your comments.

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