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Sustainable sourcing: The importance of nudging


29-Mar-12 11:54

It’s not sneaky to try and influence the way people do things, rather than blast them with demands and threats. Politicians usually use one method or another to win elections, but to bring about sustainable change, or even change in sustainability, one course is much more overlooked and yet much more potent.


There’s an interesting article on ’Nudging’ in The Economist – this idea of using behavioural economics to encourage people to change. There are some sinister overtones to social engineering in this way, if you ask me, but you can’t ignore the potential that this way of thinking has where there have been barriers to the adoption of sustainable sourcing practices.


What the UK Government did, when it wanted to improve the energy efficiency of UK households, was to identify one of the main disincentives for adoption, which turned out to be that people didn’t want to mess around cleaning out their attics in order to put in insulation. So the government set up a scheme to help clean out attics, with the condition that they would then add insulation. The idea was a success in terms of improving the number of homes with insulation in.


Couldn’t the same cases be made for key areas of the supply chain? Sure, and one category that leaps to mind is logistics.


According to Gartner: "By 2016, over 50% of Global 1000 logistics organisations will be required to systematically report verified emissions and environmental data."



In logistics specifically, Gartner says, "Sustainability can have a major impact in two ways — by improving the operational efficiency of logistics, and by transforming logistics to be sustainably driven. Customers — internal and external — will increasingly demand that logistics be sustainable."



The idea that sustainability can be the catalyst that breeds innovation and helps transform logistics services into efficient, environmentally sound operations, is an exciting one.


But unless you have huge buying power, enforcing your sustainability agenda onto suppliers can be a fraught exercise - which is where a concept like ’nudging’ comes into play.


When you look at the end goals of a sustainability project, from a supplier’s perspective; gaining efficiency, green credentials, potentially cutting costs – the proposition is appealing.


But, of course, like the houseowners worried about having to clear out the attic, there’s an inertia that needs to be overcome. Collaboration with logistics suppliers with the ultimate aim of achieving these commercial goals could be a way to gaining wins in sustainable sourcing on the buyer side.


Rather than beating them over the head with how you have to hit emissions reductions targets that your CEO has been trumpeting, there may be value in nudging suppliers with the promise of helping them hit their goals, goals which align with your sustainability aims.


Logistics may be an easy target – but look at energy use in any of your suppliers, look at any number of indirect categories and their are opportunities, be they technological, practical or systematical, to bring about change.


Depends who you are – the idea of ’nudging’ may be far too touchy feely. But innovative ways of getting supplier adoption, whatever they are, are unmistakeably important.


Steve Hall Steve Hall is Editor at Procurement Leaders. Steve oversees the publication of Procurement Leaders Magazine and draws on a decade in business publishing, providing quality coverage to senior business leaders. Follow Steve on Twitter: @thestephenhall

 
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