Procurement leaders need to play their part in overcoming the many hurdles to environmentally friendly business
Too expensive and too time-consuming - just two of the many misconceived excuses to avoid introducing sustainable business practices, each and every one ignoring the positive effect that sustainability can have on business efficiency, as well as the long-term effects on the environment.
The first major hurdle is the widely held misconception about what an environmentally responsible business actually involves. Sustainability is about driving enterprises towards maximum resource efficiency, maximum responsibility for any actions and maximum return on investment. It's about doing well both commercially and in an environmental and social sense.
The issues that affect procurement and supply chain management are also major hurdles in making businesses more sustainable. There is a shortfall in recycled raw materials, as the emerging markets are consuming most of them. In addition, post-consumer waste is increasingly becoming a commodity as it no longer has the same cost benefit to the consumer. There is also little, if any, consistent measurement globally in terms of what is sustainable and what is recycled; instead, there is a reliance on a variety of regional measures across Europe, the US and Asia.
How can procurement and other business leaders combat these problems? Developing consistent definitions of industry-specific drivers would increase focus and remove some of the generalisations. Local markets can often provide solutions, rather than always looking at global industry benchmarks. Procurement needs to ensure that these are in place with suppliers. It should also establish a return feed of used and end-of-life products to allow suppliers to close the loop and view lifecycle costs, not the one-off purchase costs, as the key driver.
Over the past 10 years, the company I lead, Interface Europe, has undergone a cultural transformation programme aimed at becoming a fully sustainable company by 2020. As part of the US-based Interface Inc, a worldwide leader in the production of environmentally responsible modular floor coverings and other textiles, we are committed to giving customers a wide range of choices for specifying products that are environmentally friendly.
Our main aim is to eliminate waste and toxic emissions; reduce energy consumption and replace what we use with green sources; redesign processes and products into cyclical material flows; and focus on new and innovative products and services instead of pure material throughput.
Through a waste reduction programme, Interface has generated over $299 million in costs avoided; developed energy efficiency programmes; and reduced CO2 emissions against the 1996 baseline by 56 per cent. Ultimately, we aim to move from the traditional linear system of "take, make, waste" towards a more natural, cyclical system of material and resource flows.
We are now working with many suppliers that historically controlled the downstream raw material market largely based on their financial strength. These companies quickly realised the lead gained by flexible and proactive firms that met the changing needs of our market.
Some examples of waste projects and supplier initiatives we've initiated include: primary backings developed with post-industrial waste content; de-engineering packaging (boxes) by supplier Smurfit Kappa to provide the same function but using less corrugated material; and recycled limestone from aggregate industry, which has historically been landfilled. This in turn reduces Interface's use of virgin limestone.
Multinational suppliers are working in partnership with us on further developing our sustainable supply chain through jointly measuring, challenging and sharing our achievements, and identifying ways in which we can work together to further reduce the upstream impact of our products. This gives those firms the ability to use our joint experience in their own businesses and thereby benefit their entire customer base.
Even if companies looked only at what could be achieved with the resources readily available to them, the impact would be significant. Consistently demanding the most sustainable products and services available would also help the market's development, and I believe gravitation in that direction is inevitable.
A strategic approach to sustainability lies at the heart of the corporate social responsibility challenge for business and will ensure that it becomes an integral part of the decision-making process in the future.
) is CEO and president of Interface Europe, a manufacturer of carpet tiles