Updated: Mar 24
We’ve been taking the planet and its resources for granted for too long. Since the start of the Industrial Revolution, the amount of carbon dioxide in the atmosphere has increased from 280 parts per million to 412, heavily influencing the average global temperature increase of 1°C. This has led to rising sea levels as billions of tonnes of polar ice continue to melt. And, without radical action over the next few decades, things are only going to get worse.
Yet much of the focus today lies on what we as individuals can do to keep climate change at bay. While it’s undoubtedly everyone’s duty to reduce their carbon footprints, this should not deflect attention from what’s really to blame – corporations and governments. They’re the ones with the power and influence to change the world for better and, more than ever, they’re in the spotlight. They need to set a good example and, in doing so, drive sustainable growth.
There is a movement, and it’s real
“The real danger is when politicians and CEOs are making it look like real action is happening, when in fact almost nothing is being done, apart from clever accounting and creative PR.” - Greta Thunberg
In August 2018, Swedish teenager Greta Thunberg started skipping school to camp outside parliament holding a sign saying ‘School Strike for Climate.’ Over the next year and a half, she became a global phenomenon leading a four-million strong movement. She’s also addressed various heads of state, met the Pope, and sparred with US president Donald Trump. In December 2019, the Time magazine named her Person of the Year.
Yet regardless of how you might feel about the movement, it has become too large to ignore. A new generation is entering the job market. Along with the changing priorities of consumers, this has had a substantial impact on business culture. New motivations and personal values are making their way into the corporate environment, and companies are coming under greater scrutiny for their sustainability practices.
It’s time to start investing not only in your business, but also in the planet and its people.
CSR and the triple bottom line: profit, people, and planet
Traditionally, the bottom line has only been concerned with profitability, with little accounting for long-term sustainability. With the rise of ethical investing and a focus on environmental and social issues, people and planet are now playing a greater role in business relationships. Businesses are under greater pressure to choose their partnerships wisely and avoid working with suppliers whose corporate social responsibility (CSR) isn’t up to scratch. Employees are more mindful about what sort of companies they work for. They want to be part of the solution, rather than the problem. Customers are more mindful about who they do business with too – over two thirds of global consumers are willing to pay more for sustainable goods and services.
CSR policies which put people and planet first are no longer just nice things to have. They’re now drivers of business value. And, with the environmentalism movement in full swing, they’ll only become more important. Fortunately, technology has made investing in sustainability far easier, particularly for enterprises with large supply chains, which are otherwise ungovernable when relying on traditional vendor management processes.
Solutions can be found in procurement
Choosing and maintaining the right third-party relationships is crucial in today’s competitive and globalised market. Yet the vast majority of the carbon footprint involved with building and delivering a product or service comes from the supply chain itself. Even if internal sustainability practices might be up to scratch, a supplier can end up being the weakest link. And, just as people judge each other based on the company they keep, so do customers judge businesses by those they work with.
Supply chains are growing all the time to the extent many larger businesses have lost visibility into them. But when something goes wrong along the supply chain, it’s usually the company selling the product or service which is first to get the blame. An infamous example from recent years was the Europe-wide horse meat scandal, in which many supermarkets were unwittingly selling beef products which contained undeclared horse meat. In the fashion sector, there have been countless cases over the last couple of decades where high-end brands have been found selling garments manufactured by child labour in developing countries. In the electronics sector, batteries are often built using rare-earth materials sourced in countries which have a poor track record in environmental sustainability and working conditions. The list goes on.
With so much at stake, finding suppliers and running background checks can be enormously time-consuming. When you have suppliers counting in the hundreds, things quickly become ungovernable. Yet there’s still an overarching need to make informed decisions and, in doing so, prioritise green initiatives. After all, CSR is practically worthless if it doesn’t extend to your procurement practices. As such, companies that want to remain sustainable and create long-term value need to think about solutions for streamlining vendor management and mitigating the inherent risks that come with it.
Why is this important for business leaders?
Naturally, business leaders are usually more concerned with profit. Fortunately, what’s better for the environment tends to be better for profitability too, and this fact will only become clearer as time goes on. Instead of thinking about the traditional bottom line, organisations need to live up to their responsibility and invest more in people and planet. Companies can leverage both of these factors to boost profit: a sustainable business attracts customers and retains employees.
Corporations also need to remember that they have an ethical and legal responsibility to do their bit to protect the environment. As new regulations start paving the way towards getting global temperature and carbon dioxide levels under control, there’s greater pressure for larger businesses to lead by example. A pressure that businesses should use to innovate their business and build sustainable supplier relations. This in turn incentivises other companies to be greener as well and become attractive suppliers.
In the end, focusing on such a serious matter as environmental sustainability demonstrates innovation, adaptability, sustainability, and responsibility. These are all important matters for employees, customers, stakeholders, and suppliers. Deliver these things, and make them an integral part of the procurement process, and you can add long-term value to your business in an age when the future of our planet is in question.