In a recent article, Bill Roth – sustainability advocate, green business coach and author of “The Secret Green Sauce,” cites five megatrends that promise to contribute to a trillion dollar global sustainable economy in 2012. One of the key mega-trends that he references is the greening of supply chains – and the impact that this will have on the global economy.
As noted in the article, Roth explains:
- Corporations, not governments, are now driving the push toward sustainability as they harvest increasingly significant profit growth through design and process innovations that cut production, delivery, packaging and disposal costs while also reducing a company’s/product’s environmental footprint. This is a global trend led by international companies like Walmart, GE and Coca Cola.
- Its commercial impact is now evident in the increasing scale of Request For Proposal bid questions on sustainability metrics and performance results documentation. This global mega-trend is creating new revenue growth opportunities for smaller businesses that can offer price competitive lower environmental footprint products and solutions.
- It is also decentralizing decision-making as large corporations gain success using Green Teams to find and implement ideas that reduce costs and a company’s environmental footprint.
- Where CFOs once questioned the ROI of producing a corporate CSR report, the importance of these documents is now clear. CSR reports have an increasingly important role as a source document used by third parties that communicate to consumers and equity investors on the sustainability of a company and its products, which has an implicit impact on the bottom line. The combined impacts of the greening of the supply chain have now made this process the economic engine of the global sustainable economy.
In my estimation, what is most noteworthy here – is that green supply chains are, by definition, driving support for sustainability not just at the corporate level but at the product level, as well. And this has significant implications for providers of sustainable product design tools and technologies. Such tools promise to grow in popularity as both downstream and upstream supply chain requirements increasingly demand that more sustainable products be produced and more sustainable materials be used in the production process.
Such sustainability strategies enable companies to reduce their environmental footprint AND achieve significant profit growth through design and process innovations that cut production, delivery, packaging and disposals costs, according to Roth -- an observation which I whole-heartedly agree with.
Sustainability metrics are also increasingly becoming a required “line item” on RFPs, according to Roth, and the formation of Green Teams to find and implement ideas that reduce costs and improve environmental footprint ratings, are on the rise. This trend, too, is one that I have witnessed, and that I expect we will continue to see more of.
Moreover, investors are paying more attention to the sustainability of a company and its products, according to Roth. And that, ultimately, promises to be one of the greatest contributors to the adoption of sustainability practices among many companies – but especially among those that may not prove to be motivated by the need to “do good” unless such good is rewarded financially.
Increasingly, it seems, doing the right thing is being paired with financial gain, as well. This is a topic that we will continue to explore further in the coming months.
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