No organization or executive likes to come off as bossy, but when it comes to sustainable product sourcing, there are simply too many factors at play for companies to take adopt a laissez-faire attitude. Often, complete and unimpeded oversight of all production, manufacturing and transportation processes across the supply chain is simply outside the realm of possibility, so in order to ensure that procurement and distribution practices are moving toward their eco-friendly goals, businesses have to exert what control they can, both internally and with suppliers.
This effort, however, remains a delicate balancing act. Setting and enforcing strict guidelines on sustainability can become extremely costly in terms of time and resource expenditures. Furthermore, firms that make themselves unpleasant or financially difficult to work with risk losing their key sourcing partnerships. How, then, can companies exercise the control necessary for green procurement and hold suppliers to standards that harmonize with their own while not exposing themselves to undue risks or expenditures?
Getting governance right
In a column for GreenBiz, Barbara Brown and Andrew Watterson of sustainability consulting firm BrownFlynn discussed the basic principles of enterprise governance in relation to green business initiatives. They suggested that enterprises' efforts in sustainability need to supported by a clearly defined executive structure that articulates the mission to all parties, so they can be recognized for their successes and held accountable for their failures.
"This allows the program to set direction, establish goals and create policies to execute the strategy. A sound structure requires multi-level, cross-functional leadership committees at the board, executive leadership and management levels of the organization," Brown and Watterson wrote.
This tactic can help companies ensure that they emphasize and promote understanding of the sustainability strategy internally. This way, firms may find they have more credibility with suppliers from whom they expect green practices. It might even be possible to provide in-house expertise on sustainability to business partners.
Work toward transparency
Nevertheless, companies must put tools in place that allow them to understand how suppliers are performing when it comes to reducing environmental impact. Parker Avery Group Associate Partner Laura McCann Ramsey noted in a recent column for Apparel Magazine that as ethical and sustainable products become more in-demand, it's critical that firms work toward transparency.
"There are more and more examples of how a responsible and ethical approach to the supply chain makes for a profitable business and provides a true competitive advantage," McCann Ramsey wrote.
Ideally, this visibility should go two ways: between suppliers and companies, and between brands and consumers.