Supply chain is at the core of many groundbreaking sustainability efforts

In my last blog post, I noted that sustainability often advances a company’s competitive advantage, and in many cases it becomes a key element of the brand. 

As I looked at the annual list of the Global 100 Most Sustainable Corporations in the World (worth noting: 18 organizations on the Global 100 are APICS corporate affiliates and customers!), a common denominator emerged: there is a clear supply chain aspect to every great sustainability measure. The Global 100 ranks the top sustainability programs and results based on a set of metrics. Here are a few of the sustainability programs from some very different industries that stood out:

adidas Group

German sportswear giant adidas Group ranks fifth among the Global 100 and is recognized as the sustainability leader in its industry. To demonstrate the company’s commitment to sustainability, adidas publishes a sustainability report on an annual basis. This is the third consecutive year adidas has ranked among the top 10 sustainable organizations in the world.

Adidas has emphasized sustainability for decades, introducing increasingly progressive programs through the years, from banning chlorofluorocarbons (CFCs) and establishing a supplier code of conduct to product sustainability (such as eliminating the need for water in the dying process, and introducing a new way of making products with no textile waste).

Its global, multi-layered supply chain includes many different types of business partners. Adidas maps supply chain risk to ensure that its network of suppliers produce in a socially and environmentally responsible way while using resources wisely. It audits suppliers against a set of standards and rates them per their ability to deliver fair, healthy and environmentally sound work product and workplace conditions.

Last April, adidas introduced a sustainability strategy titled, “Sport Needs a Space” that takes a holistic approach to sustainability and encompasses the entire lifecycle of sport, from the places where sporting products are made (designed, created, manufactured and shipped), to where they are sold (retail, wholesale and e-commerce) and played (including manmade and natural settings). 

“Sport Needs a Space” identifies six priorities to help protect address the spaces where sports are made. It translates the company’s sustainable efforts into tangible and measurable goals and objectives through 2020, with targets set for issues related to water, energy, materials, workers and their health.

You can see how adidas’ sustainability efforts effectively tie in with the brand and resonate with its athlete customers, while steering the company in acting responsibly across the supply chain. Learn more about adidas’ multifaceted efforts and history of sustainability here.

Schneider Electric

Schneider Electric first launched its sustainability approach in 2002 when it created a sustainability department and signed up to the 10 Principles of the U.N Global Compact. Today, Schneider Electric does a superlative job of measuring environmental and sustainable development performance. It keeps a Planet & Society barometer that presents sustainability objectives for three years and the quarterly results of key performance indicators. It also established a materiality matrix that keeps the focus on the most important economic, social and environmental issues as aligned with stakeholders’ expectations.

Schneider Electric’s global brand strategy showcases the business and societal value of sustainability and efficiency. Its “Life Is On” campaign helps customers around the world transform the way they access and use energy, and shows how individuals can have an impact on their organizations, communities and society, and how new technologies that enable distributed and connected energy can change the way we live.

Schneider Electric has a global supply chain of about 90,000 employees, fulfilling customer orders every 1.5 seconds in 220 manufacturing factories and 100+ distribution centers located across 44 countries. In 2016 it broke through to the Gartner Supply Chain Top 25 list for the first time.

It provides energy management and automation services for its customers, so Schneider Electric is especially committed to making sure its own products and solutions help reduce energy use and CO₂ emissions, from design to manufacturing to shipping and deployment to the product’s end of life. Its efficient global supply chain is critical to these efforts.

Review Schneider Electric’s comprehensive sustainability program here.

Diageo

Diageo is a global alcoholic beverage distributor with brands that include Johnnie Walker, Smirnoff, Ketel One, Captain Morgan, Baileys, Tanqueray and Guinness, sold in 180+ countries.

One of Diageo’s sustainability strategies involves working directly with local suppliers to create value and contribute to local economies, especially in emerging markets. Its work with suppliers is guided by three core principles:

1. Due diligence to help suppliers improve their sustainability performance
2. Offering training to the suppliers to build their skills and capabilities
3. Supporting and creating direct value with local businesses 

Its supply chains drive high standards in sustainability and business ethics. From the farming of ingredients to manufacturing and distribution of marketing materials and merchandising, every stage of every supply chain is carried out with consideration as to how it impacts people, local communities, the environment and other stakeholders. Diageo is working to apply social and environmental standards to every link of its supply chains.

Diageo’s strategy for achieving sustainable supply chains is in part measured against its Sustainability and Responsibility targets for 2020, which tracks progress in three key areas: responsible sourcing, reducing the environmental impact, and forming partnerships in the agricultural value chain. Diageo aims to make its agricultural supply chains economically, socially and environmentally sustainable.

U.N. Global Compact Steers Sustainability

While these and many sustainability measures are multifaceted and complex, the United Nations Global Compact serves as a roadmap. Many companies—and supply chain organizations—begin their sustainability journey by referencing the U.N. Global Compact, which brings businesses and NGOs together under the aegis of the United Nations to "unite the power of market with the authority of universal ideals." Created in 1999 and still applicable today, it’s the world’s largest corporate sustainability initiative and provides guidelines to enable companies to align their strategies and operations around universal principles on human rights, labor, environment and anti-corruption to advance our global society. The U.N. publishes a Guide to Corporate Sustainability with content on how to translate global goals to the local level.  

APICS provides perspectives on sustainability through the Thinking Supply Chain blog, APICS magazine, research, and conference programming and will soon announce a new APICS Award of Excellence to recognize supply chain leadership in the areas of corporate social responsibility and sustainability.