Tag Archives: supply chain sustainability

Lip Service and Promises don’t lead to Sustainability

dog on floor

Many corporations post in their news releases and annual reports that they embrace sustainability and corporate social responsibility. As responsible consumers, we invest in those corporations and buy their products. As we know, from companies like Chipotle, who truly think they are conscientious and are providing healthy food, if the investment in a sound chain of custody process and policy are not embedded, disaster may strike. A Bloomberg article on Chipotle highlights that the cost of building the right process will be very expensive and take a long time.

Monday, shares of Lumber Liquidators tumbled more than 19 percent after the CDC said people exposed to certain types of the company’s laminate flooring were more likely to get cancer than it previously predicted. The road to recovery will be very rocky for them for sure.

I have long said that companies need to implement a robust chain of custody process for their supply chains. To put it simply, the chain of custody is the unbroken path from the first stage of the supply chain to the end customer. The chain of custody is a key area were food and other supply chains lack process, focus, procedure, systems and audit capability. Without it, they can be inviting regulation, which is not a desired outcome from the company’s perspective. Because there is no traceability from point-of-origin to point-of-consumption, it takes regulators a long time to reverse track the chain of custody when there’s an incident involving personal injury, illness or harmful chemicals found in the product. The chart below identifies a simple six-step process that companies should consider to identify, maintain and track the chain of custody.

Chain of Custody Process

chain of custody1

To learn more about the steps, there’s a description in this article I wrote for Food Safety magazine.

The end result is that chain of custody requires systems, processes, audits, training and additional people to manage and document the chain of custody. The pharmaceutical and aerospace industries have perfected this to assure regulatory compliance. If the food and other industries fail to self regulate, the government will step in. Sadly, most companies are not willing to make the investment before a catastrophic event causes negative publicity, tanked stock prices and lawsuits; then it may be too late for the business to recover.

The days of lip service to sustainability and social responsibility will catch up to companies that cannot track their products through the supply chain.

Isn’t it time to make that investment?

Earth Day: Does your company make the grade?

 

New-Life

On this Earth Day, it is appropriate to dedicate this blog to sustainability. There is no doubt now that sustainability will be a performance indicator for future investors in companies and it’s interesting to read corporate reports dedicated to green , sustainable priorities. While many corporations give lip service to sustainability, unfortunately, when it comes to funding such efforts many companies fall short. Fortunately, more companies are making the investment, like these that warrant mention:

  • Alcoa’s executive compensation is tied to safety and environmental leadership, which includes greenhouse gas emissions.
  • GE uses it in resources department to integrate sustainability into the company’s culture.
  • Coca-Cola has committed to reduce water use by 25% and hired an external audit firm to monitor these results.
  • At its shareholder meeting, Starbucks CEO Howard Schultz discussed the company’s efforts to work with suppliers and local communities investing in sustainable farming and ethical sourcing.
  • Dell integrates recycle materials in its product and packaging and considers end-of-life recycling.

All are examples of leadership in sustainability that starts in the board room and becomes part of a company’s DNA.

Since sustainability is becoming important to investors, many firms are measuring corporate sustainability and ranking them according to their criteria. One notable firm is the Toronto-based Corporate Knights, who publish a list of the top 100 most sustainable companies.

For sustainability to be effective, there must be a deliberate strategy, commissioned by the Board of Directors, mandated by the CEO and driven to be part of the culture.

Is sustainability part of your company’s DNA?

Sustainable Fashion – Japan a Driving Force?

You may or may not know that Japan in the middle of a major apparel upswing. In fact according to Apparel Magazine Japan expected to have a steady growth throughout the next decade. How is this possible? Because the target market consists of fashion conscious young adults in their 20s, with holes burning in their pockets (because most live at home with their families). Most importantly though, this population of young people cares about sustainability.

Japan is likely to help push sustainability reforms in the apparel industry because of the commitment young people are instilling in the market. The United States and Europe are the two leading forces in garment industry sustainability, will Japan be the third driving force?