Corporate Social Responsibility in supply chains: an example of aluminum refining

Commodity production in many parts of the world causes huge problems for local communities. Extractive industries located in areas with poor environmental protection and enforcement can be particularly damaging.

For example this contentious aluminum refinery in Niyamgiri, India: The battle for Niyamgiri

Should purchasers have a role in influencing supply chains by avoiding companies with dubious social and environmental ethics? Would this be interfering with domestic governance and development, or does CSR (corporate social responsibility) pave the way for this type of decision? Are purchasers in a position to obtain and evaluate the information needed to make those decisions?

The Carbon Benefits of Recycled Materials

The benefits of avoiding extraction and primary processing are usually significant, even when collection, transport and reprocessing of recycled material is taken into account.

An increasing range of recycled products are coming onto the market, such as glass, steel, aluminium, plastics and paper. Usually calculating the carbon benefit is reasonably straightforward. As the final products must perform to similar standards (whether from virgin or recycled materials) in order to compete in the market place, the carbon footprint during their ‘use phase’ will also be very similar.

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Sustainability Trends

We have picked up a few tips recently from participating in a Conference Board of Canada webinar where sustainability thought leader and governance specialist, Coro Strandberg discussed the drivers and trends of CSR governance and shared emerging best practices in the Canadian context.

We have also been reviewing the Carbon Disclosure Project and other reports to highlight some of the key points that are useful to the supply chain profession.

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Cutting Carbon in the Supply Chain

For many manufactured products, the majority of their carbon footprint comes from energy used in extracting, refining, processing, manufacturing and transportation.

There are several options for reducing the carbon footprint:
· redesign manufacturing process; use alternative raw materials and new technologies to find energy efficiency savings
· shorten supply chains; reduce CO2 from transport
· Use / purchase renewable energy; renewable energy produces (almost) zero carbon
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New Tool to Measure (and Manage) the carbon footprint of your supply Chain

Reducing the amount of carbon imbedded in the raw materials we source can be a very good thing – especially if it helps us meet our Corporate Social Responsibility goals as supply-chain professionals (not to mention helping the planet).

Virescent and ProPurchaser have just developed a tool to measure and manage the carbon footprint of a supply chain. And, we are pleased to announce that our blog readers are invited to take out a free, 3-month trial.

The Multiplier Effect

If you want to really use your buying power to make a environmental difference, make sure that any “green” criteria for vendor selection are widely publicized so that your suppliers’ competitors hear about them too.
In this way, encouraging a change in one supplier can have a “multiplier effect” on many others.

via Negotiating Nugget | Propurchaser.

Few Canadian companies disclose environmental practices

Major pension funds are demanding more environmental data about the businesses they’ve invested in, but most companies are still not giving them key information about things such as energy and water consumption, according to a new review of corporate social responsibility in Canada.

via Few Canadian companies disclose environmental practices – The Globe and Mail.

Green Procurement: knowledge is power

To actually make your supply-chain more green, the first step is to understand what the main environmental impacts are and where they occur in the supply chain or product lifecycle.

I intend to write about what purchasing professionals can actually do to ‘green’ supply-chains and lower their organization’s carbon footprint. My goal is to stimulate ideas and debate; so please feel free to comment or add your ideas.

Increased public awareness, scrutiny from environmental groups, regulatory pressure and concerns about climate change has led companies in a race to establish their eco-credentials; through removing harmful but regulated substances like phthalates (often found in PVC) from products, changing palm oil suppliers to save rainforests, and setting huge targets to remove carbon emissions from supply chains. For many companies, their products’ biggest impacts, and therefore risks and opportunities, are from the supply chain in the production, extraction, cultivation, and transport of raw materials.

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Are Green Supply-Chains More Expensive?

This is the second article discussing the results of our ongoing survey examining what Supply-Chain professionals in North America are thinking and (more importantly) doing about greening their supply-chains.

The first article, How important is a Green Supply-Chain in North America?, focused on the perceived importance of a green supply-chain, homing in on senior management’s expectations, as well as our own attitudes towards suppliers with green credentials.

The survey asked how strongly participants agreed or disagreed with the following statements:

I believe greening the supply chain could have the following effects on our business:

• Reduce Costs
• Improve brand image
• Generate new business opportunities
• Help recruitment and retention of staff
• Help manage risks
• Drive product innovation
• None that I can think of

In this article we are focusing on the respondants attitude to reducing costs.

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How important is a Green Supply-Chain in North America?

We certainly hear a lot about the importance of reducing the amount of carbon our species is releasing into the atmosphere. But we don’t hear much about what this really means to our profession: in other words, how important is a ‘green’ Supply-Chain in North America?

To answer this question we recently sent out a 14-question survey to hundreds of Supply-Chain professionals. The results are in and you may find them interesting.

Three Key Findings.

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