Sustainable Sourcing: Five Sustainability risks that get forgotten

1. Turning off talent. More and more graduates are considering the sustainability of organisations. Now, scepticism may reign here – a graduate is lucky to get a job, you may think. Still, that tag of being a good company to work for lingers around and sustainability is one of those intangibles that feeds into an organisation’s culture. It may not matter all that much now, but being known for being ‘green’ can impact your choice of candidates in years to come.
2. The unfortunate label. Think of Nike, Coca-Cola, Levis – consumer-facing companies which have at various points in their history have had to battle labels that they maybe didn’t deserve any more or less than their competitors, but they nevertheless had. Marketing will tell you, once the perception of a brand has gone a certain way it’s hard to shift. Very hard. So the risk isn’t just the immediate headlines, it’s the brand reputation that is heavily influenced by sustainability credentials. The cost, then, is thousands in marketing spend to try and bring people back round to a more wholesome view of your brand.
3. Supplier-side judgement. Now, it may seem rich to suggest that vendors are about to get choosy in whom they sell to. However, if there’s one thing sustainability does, it’s putting that supplier-buyer relationship in the spotlight. Procurement chiefs often talk about wanting to become customer of choice, and part of doing that is making sure that reputations align and that if a supplier wants to put the focus on its ability to cut carbon emissions or pay its workers well, that’s something that the buying organisation is supporting.
4. Preparing for career changes. A company today isn’t the same as a company tomorrow. Your group’s low-cost country sourcing strategy may be saving plenty of money and that may keep the CFO of your back, but if there’s a change at the top, there’s every reason to believe that the ethics of your supply chain could get some unwanted attention. As before, the problem is inertia – you can’t turn fake a sustainable attitude to someone who really wants to know and the guy who wants your job may well be able to do a better turn on coming up with a ‘sustainable agenda’.
5. Your competitors get there first. Occasionally companies go head-to-head to try and develop a green product or initiative that will capture the consumer imagination and you can see the keenness with which their organisations value the tag of ‘green champions’. In years to come, there’s an argument that says that supply chains will be an important point of competition and the ability to have the most impressive and well-covered green initiatives among suppliers will make a huge impact. Ideas like fair-trade and various other certifications are a start into this field, but arguably there’s plenty more to come as big name buyers look to convert their purchasing strategies into sales. Falling behind in your industry isn’t an option.

Steve Hall is deputy editor for Procurement Leaders Magazine. Follow him on Twitter at @thestephenhall.