In June, Supply Excellence began examining environmentally and socially responsible supply chain strategies. Our motivation was due in large part to a passionate speech former President Clinton’s passionate delivered at AMR’s Executive Conference, which was aptly themed Supply Chain Saves the World. The ex-Commander-in-Chief used the event to stump the Clinton Global Initiative, a non-partisan fund designed to prompt businesses, governments, and individuals to commit to developing innovative new approaches and technologies that can improve the world’s environmental and social health.

AMR wisely tied this theme into sustainable supply chain and manufacturing strategies by showcasing innovative approaches in these areas by leading companies, such as Hewlett-Packard, Proctor & Gamble, Siemens, and others. And I was inspired to dedicate an continued series of posts into green and socially-responsible supply practices. (Read more here.)

Last week, Clinton was back to doing good, enticing world and business leaders to commit more than $7 billion to fund improvements in healthcare, social understanding, and sustainable growth around the globe. (For those counting, that’s nearly a 300% increase over last year’s commitments.)

There were more than 200 commitments in all. The single largest came from British business mogul Richard Branson who pledged to invest the next decade of profits from his transportation businesses — including train comapnies and five airlines — in research and business efforts to develop and promote renewable, sustainable energy sources. Branson estimates the total value of this commitment at $3 billion. The commitment includes a plan to transition his airline fleet to run on cellulosic ethanol – a new method of ethanol production that uses micro-bacteria to transform farm and logging waste into ethanol. (Read previous post on cellulosic ethanol and what it might mean to you.) 

“Over the next 20 or 30 years I think it actually will replace the conventional fuel that you get out of the ground,” said Branson. “We use around 700 million gallons of fuel a year between the four airlines. I hope that over the next five to six years we can replace some or all of that” with plant-based ethanol.

The move could also help lower the airline’s supply and operations costs. As noted in previous posts, new approaches to cellulosic ethanol have pushed the cost of producing ethanol from to $1.35 per gallon. And this cost will only go lower with more investments like this one from Branson. DuPont, Archer-Daniels Midland (ADM) Co., Royal Dutch Shell Group, British Petroleum, Chevron, and Iogen are all racing to captialize on the cellulosic ethanol opportunity.

Other commitments of note for supply management executives, include:

• Figueres Consulting committed to at least five Clean Development Mechanism (CDM) projects in Latin America, Asia and Africa in the next year. These programs would make it easier and less costly for industrialized countries to meet the greenhouse gas emission reduction targets that they agreed to under the Kyoto Protocol by investing in emission reductions projects in the developing world. The CDM is also mandated to assist developing countries in achieving sustainable growth. Natsource and Alston & Bird committed to running a similar project in Ethiopia. These initiatives and incentives should be factored into global supply strategies, enabling supply managers to impact their companies’ bottom line as well as their tax bill by swapping greenhouse gas credits.
• Parsons & Whitemore will construct a plant that will produce approximately 40 million gallons a year of U.S. soybean oil as an environmentally friendly fuel to reduce U.S. dependence on foreign oil. The plant aims to produce 20 million gallons of alternative fuel by April 2007. The project will be worth $15 million over 1 year and, if successful, similar plants will be built in other parts of the U.S.
• ABN AMRO will create a global private equity fund to make major investments in renewable energy and energy efficiency companies. The fund will target Organization for Economic Co-Operation and Development (OECD) countries and select emerging markets. ABN AMRO will invest up to $63 million each year for its own account with the remaining funds to be raised from institutional investors, for a minimum fund size of $190 million. The Fund will seek to measure CO2 reduction created by its investments.
• Interface, Inc. committed to becoming a carbon free company by 2020 at a cost of $8.8 million. The company will reduce CO2 emissions by 6.7 percent each year; reaching net zero emissions by 2020. Emissions will be eliminated from all aspects of the company’s operations leading to a cumulative reduction of 1.5 million metric tons of CO 2.

Check here for more information on the Clinton Global Initiative, global commitments, and to view webcasts and podcasts from the recent conference.