The Truth Will Out: Supply Chain Management

The following post is part of a CSRHub series focusing on 10 trends that are driving corporate transparency and disclosure in the coming year. To follow the discussion of each trend, watch for posts on the CSRHub blog every Wednesday.

By Bahar Gidwani

A company’s supply chain generally controls 60 percent to 70 percent of its costs. Companies that manage their supply chains will perform better because they have lower costs, more flexible product cycles, and/or higher quality products. When a company includes sustainability into its corporate strategy, it may need to also build sustainability into its supply chain strategy.

One of the first groups of companies to realize this fact was retailers. Tesco, WalMart and 91 other major companies and non-governmental organizations (NGOs) formed The Sustainability Consortium(TSC) to help prod their 100,000-plus suppliers to improve their performance on dimensions such as carbon use, water use, recycling, child labor and diversity. (Click here to see a list of the companies in TSC that CSRHub rates.) Sedex, in the UK, has done similar work with a set of 482 companies and more than 25,000 of their suppliers. Industry associations such as the Sustainable Apparel Coalition and theElectronic Industry Citizenship Coalition are also publishing and promoting standards of conduct within their area. NGOs such as Trucost and the Carbon Disclosure Project led pioneering studies that proved that sustainable supply chain management could lead to massive reductions in waste and improved product quality.

To read more on supply chain and sustainability, visit the CSRHub blog>>