Green Procurement

Eco-friendly products have been mainstream for some time now, and many executives have spent years working toward more sustainable business strategies within their respective companies. These leaders know first-hand just how many aspects of enterprise operations need to be addressed in the effort to move toward greener procurement and production models. Distribution and manufacturing chains have become more complex and geographically spread out, as have companies' customer bases.

With no end in sight for this trend, how can businesses make real, measurable efforts to reduce environmental impact and at the same time communicate those successes to consumers?

Where the problems lie

A recent study by the MIT Sloan Management Review and the Boston Consulting Group highlighted some major issues that surround sustainable product sourcing for contemporary businesses. Recognition of the importance of eco-friendly practices is widespread, the researchers affirmed: 86 percent of the companies they surveyed indicated that sustainability already was essential for remaining competitive or that it would be in the near future.

However, companies still seem unable to look at all aspects of green logistics with this same level of clarity. While 62 percent of all respondents said they had developed a sustainability strategy, according to the study, that leaves nearly a quarter who recognize the competitive advantage of environmentally friendly practices but haven't integrated them into their business models. Meanwhile, although nearly a third of businesses said that their efforts in sustainability had boosted their profitability, a quarter admitted that they didn't know what the relationship was between their green practices and business cost-reduction initiatives.

Closing the gap

Clearly, a disconnect exists between the recognized need to move toward green procurement and companies' actual understanding of how they can achieve these goals in ways that are advantageous to the business. However, some firms are taking proactive approaches to closing this gap.

One method for moving toward a more sustainable business model is to respond directly to the specific demands of consumers. Tyson Foods recently wrote to its pork suppliers insisting that pigs should be housed in environments that "allow sows of all sizes to stand, turn around, lie down and stretch their legs." Tyson's note to its producers came following a wave of pressure from groups such as the Humane Society and Green Century Capital Management, which called upon the food company to terminate its use of highly constraining, two-feet-wide gestation crates.

Furthermore, Tyson's letter to its suppliers noted that the company would be making greater use of the third-party auditing services it already leverages to ensure quality and practice standards.


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