David Daffner, Vice President
Sustainability has been a corporate initiative for many companies for some time now. Annually since 2005, financial information company and magazine Corporate Knights has released the Global 100 — a report listing the world’s most sustainable corporations.
In 2019, the Global 100 listed the top-ranked U.S. company as Prologis, Inc., a leader in logistics real estate. Prologis came in at number six with a score of 79.12 percent. According to their website, Prologis understands the environmental impacts their logistics real estate facilities, development and operating activities can have. They develop solutions that allow their business and their customers to grow and thrive while minimizing environmental impacts.
True sustainability is more than what a single company does to make their own business operations more green. It requires conducting the same type of an evaluation with your vendors and suppliers too and then collaborating to integrate environmentally sound choices throughout the entire logistics network.
Are sustainability and profitability conflicting priorities?
This question is at the heart of a recent study conducted by Economist Intelligence Unit and sponsored by Llama Soft called, Sustainability: The Missing Link. A survey of senior executives from 250 global manufacturing and retail organizations revealed the majority felt economic performance was the top-ranking corporate sustainability priority. Interestingly, when asked whether profitability or sustainability was more important, 60 percent felt these objectives were equal, while another 25 percent said sustainability was more important. Clearly, these two objectives are not mutually exclusive.
Business sustainability is defined as the process by which companies manage their financial, social and environmental risks, obligations and opportunities over time.
How to becoming leaner and greener
One way is to see where you are in relation to the three tiers of sustainability, which was created by The Future Laboratory. Depending on where your company’s efforts are, you might want to draft a plan to reach a higher level. Keep in mind that the supply chain span everything from packaging to transportation to waste management.
Tier 1: Getting the basis right
Most companies start with the basics, which means having employees focus on the 3 R’s: reduce, reuse and recycle. Turn off lights and computers when not in use, recycle paper, offer the option of working from home and opt for teleconferencing instead of in-person meetings when possible to reduce the need for travel and, in turn, the company’s carbon footprint.
Tier 2: Learning to think sustainably
Taking things to the next level involves expanding these concepts to your supply chain operations. You may consider product design, manufacturing operations and distribution optimization. You may even decide to change how you approach supplier management. Organizations with hundreds of suppliers and thousands of products could find reducing the number of vendors makes the process more manageable.
Tier 3: The science of sustainability
At this level, companies conduct audits, map out a long-term plan for sustainability and set benchmarks for measurement over time. Companies are recognizing the cost savings of green operations, and the need to address this issue as industry and government regulations push for the same types of changes.