Corporate Sustainability

Supporting long-term environmentally sound practices goes by many names -- going green, corporate social responsibility, sustainability, just to name a few. I like the word "sustainability" because it emphasizes the fact that the goal is to create ways of doing things that work over a long period of time. Despite the fact that sustainability is a very talked about subject these days, it is still a moving target. Guidelines are plentiful in the form of regulatory obligations and legislation, consumer demands and even pressure from active environmental groups, but most companies don't have a clear sense of what steps to take first and what consumers expect.

 

First, there's the fact that our expectations for socially conscious corporations have become more sophisticated over the past couple of decades. To some extent, the standard was originally set by companies like Ben & Jerry's, which donated portions of its profits to nonprofit organizations and community activities. Today, our standards have changed - we think of Toyota's hybrid Prius as a prime example of bringing green development to an eager market.

 

Second, there are still debates as to what's sustainable. Unless we understand all the costs of an item along its entire lifecycle, we can't make good decisions about whether it is sustainable or not. How many times have you heard the debate about cloth versus disposable diapers? It's a conversation that has continued for years with no definitive winner. The factors span the entire product lifecycle -- production, packaging, delivery in the supply chain, daily use and maintenance (the financial and environmental costs to clean and sterilize cloth), and end-of-life disposal and recycling. A more recent debate over bottled versus tap water carries some of the same issues, as well as an even broader scope related to health -- bottled water is often the alternative to high calorie drinks. More complex goods, especially in consumer electronics, add the complexities of reverse logistics such as warranty replacement procedures, component recovery and reuse, and so on. It seems the variables are endless.

 

Basically, sustainability is about the fact that companies have the ability to change the debate with new products that are more easily recycled, product life extensions, biodegradable packaging, more environmentally-friendly production processes and more. We know that many companies are trying to understand how to define sustainability as a part of a company's competitive dynamic, not just part of a green marketing campaign. To put it bluntly, we expect many companies to apply the concept of sustainability to their entire products and services portfolio as well as internal business practices.

 

 

 

 

Let's not kid ourselves, however, that bottom line profits don't drive corporate behavior, and if green efforts have stalled previously, it's because there was no payoff to the investment. Things are changing and if done correctly, sustainability makes good business sense -- it can lead to revenue generation and help drive cost savings, and sometimes represents the minimum cost of entry to the market based on consumer demand. With the shift toward sustainable practices, IT and IT vendors must change and adapt as well, with innovation in the products and services that companies must use to support a changing business model.

 

The biggest challenge is that there's no simple path. Sustainability requires a big picture look (total system cost/benefit) across many small decisions supported by multiple applications, and where departments (P&Ls) may not all benefit. It's important to remember every decision will only be as good as the data behind it. Manufacturing Insights will continue its exploration of IT and sustainability, and we'd like to hear what you need from IT to support your sustainability efforts; I can be reached at [email protected].