2Sustain

Last month, the athletic apparel company PUMA announced its first “environmental profit and loss statement.” PUMA’s CEO Jochen Zeitz explained the decision by insisting that, in order to remain profitable, companies must integrate into their business models the true costs of relying on nature.

PUMA’s move is an example of “corporate ecosystem valuation,” the process of businesses making strategic decisions by assigning a financial price to both ecosystem degradation and the services that ecosystems provide. For example, clean water and forests provide services like erosion control, CO2 absorption, and food.

But, why would companies consider adding a value to resources like water or timber? After all, these are not line items an analyst typically finds on a balance sheet. Data from the World Business Council for Sustainable Development (WBCSD) tells part of the story: (more…)

Companies are emerging from the recession tentatively, at best, and yet intriguing new research found that most businesses remain quite committed to their sustainability goals.

In fact, the new study, conducted by MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG), found that 69 percent of the more than 3,100 corporate leaders surveyed actually plan to increase their investment in and management of sustainability this year.

Just over one-quarter (26 percent) plan no change, and only 2 percent intend to cut back on their commitment.

What’s more, the second annual Sustainability & Innovation Global Executive Study also discovered that what the authors are calling a “two-speed landscape” is emerging. These days, there’s a growing gap between sustainability “embracers”—those who place sustainability high on their agenda—and nonembracers or “cautious adopters,” who have yet to focus on more than energy cost savings, material efficiency, and risk mitigation.

When comparing embracers to nonembracers, the report concludes that: (more…)

Water security has made its way onto the corporate agenda.

Virtually all (96 percent) of companies in a recent survey were able to identify whether or not they are exposed to water risk, and more than half of those that reported risks classify them as current or near-term (1-5 years).

The survey, prepared by Environmental Resource Management (ERM) and sponsored by CDP Water Disclosure, polled more than 100 of the world’s largest companies asking for information on their water use and other water-related business issues. The results show that water is already impacting business operations. For instance: (more…)

Two things jumped out at me while I was reviewing the results of A.T. Kearney’s recently released 2008 Assessment of Excellence in Procurement (AEP) study.

First, the study found that procurement leaders are placing a high priority on risk management. Whether they’re using internal risk mitigation strategies or mega-trend analysis, AEP leaders seem to agree that supply risk and performance management are becoming increasingly critical in today’s complex global supply chains.

Second, this latest A. T. Kearney analysis also shows that sustainability has emerged as a hallmark of procurement excellence. A whopping 89% of AEP leaders have procurement sustainability plans in place; many have comprehensive sustainability programs that are integrated into their overall corporate strategy.

(more…)

I just had the pleasure of participating on a conference call with Tim Cummins of the IACCM (International Association for Contract & Commercial Management ).  Tim is one of the most knowledgeable, thoughtful and articulate guys out there when it comes to the myriad of issues facing 21st century supply management and contracting professionals. Tim and I spoke at length about the complex new world of supply chain management in the face of globalization, increased regulation, distributed supply chains, and the resulting new risk factors that must be managed by 21st century executives. In particular we focused in on the reputational risks companies face if they get it wrong – as well as the benefits if they get it right.

(more…)