New Report Highlights Role of Supply Chain in Driving Corporate Strategy and Sustainability Initiatives
As a strategic advisor in the field of ethical and sustainable business practices for over 20 years, I have been fortunate to have been a part of a legacy of “firsts” that have helped shape sustainability and supply chain management awareness in Canada. I find that the companies which achieve the greatest success in sustainability terms, such as Nature’s Path, Mountain Equipment Co-op or RBC are those that can integrate sustainability deep into their corporate culture and into their supply chains.
That’s what makes the recent release of OfficeMax Grand&Toy’s Insights Report on supply chain and procurement so timely. It presents a strong case that Canadian and global organizations are becoming more responsive to the fact that supply chain is one of the most significant organizational lever points for driving corporate sustainability. I couldn’t agree more, and I fully expect the report’s findings will continue to drive the conversation at the C-suite level regarding new opportunities and efficiencies to be gained via sustainable supply chains.
Overall, the findings are very positive about the depth of sustainability practices in Canadian business.
Canadian results are benchmarked with global findings and Canada compares quite favourably. For example, 46% of Canadian enterprise-level organizations have a chief sustainability officer, compared to 26% globally, and 47% of respondents reported having one person in each department responsible for sustainability, compared to 22% globally. It further reveals that the number one driver of sustainability in Canadian business is cost-reduction. Globally, the top three drivers of sustainability are fairly evenly distributed between cost, reputation, and alignment with values.
Are we over-emphasizing cost as the key driver of sustainability?
Operational efficiency and cost-effectiveness are generally an easy sell to business executives. In Canada, sustainability initiatives have leveraged this easy buy-in and continue to do so. But this singular focus on the bottom-line comes with risks. In our experience, high performing sustainable supply chain programs deliver more than just financial savings; they help reduce risk, build corporate brand, drive innovation and build stronger engagement with employees and suppliers.
However, as the report points out, this strategy leaves businesses at risk of stalling their sustainability programs as cost-reductions become “maxed” out. Our work has shown that the most successful sustainability programs integrate sustainability into the corporate culture. Growth must come from the bottom, but without C-Suite buy-in, the company culture will not change and current strategies will continue to rule. This explains the rapid adoption of sustainability initiatives by Canadian business – they fit into reigning corporate models – and it also explains why they run the risk of stalling when the cost savings run out – precisely because the models have not changed.
Collaboration within and between all stakeholders is the key to driving the next wave of innovation.
OfficeMax Grand&Toy’s Insight Report found that collaboration between sustainability departments and supply chain & procurement is still quite limited. We expect this to change and foresee an increasing role for collaboration in promoting sustainability, both within an organization as well as up and down the supply chain. As companies are forced to dig deeper for sustainability and supply chain cost-savings their internal and external communications and collaboration in their supply chain surrounding sustainability will increase. These types of collaboration will result in better programs and improved impacts and, in fact, I see this playing out right now within the Municipal sector, where 20 large municipalities across the country are participating in regular networking webinars and teleconferences to share sustainable procurement best practices and product specifications. When Finance and Sustainability are allies at the executive table they can be a powerful force for change and innovation within an organization.
With the release of this Insights Report, OfficeMax Grand&Toy is making a significant contribution to the sustainability and supply chain movement. Check out the full report at www.officemaxcanada.com/insights and stay tuned for future postings on more of the findings, as well as reaction from our contacts and stakeholders in the sustainable supply chain sector.