Just as the doubters ramp up their rhetoric against the possibility that doing good for the world can also be good for business, Fortune magazine this week published a 21-page expose on how environmentally and socially responsible practices are now big business.

The feature – Green is Good – highlights 10 global companies that are using sustainable supply strategies, alternative energy, eco-materials, and other approaches into top-line profits and competitive advantage. (Fortune editors admittedly left some of the giants of sustainability, such as GE, Starbucks, and Wal-Mart, off the list because their successes in this area have been so widely covered. Although, Fortune ranked these firms among its Most Admired Companies, noting that they (and others like Toyota) “are building their growth at least partly on strategies and products aimed at helping the planet.”)

The point of the article is the mantra with which Supply Excellence now familiar: leading companies recognize that corporate responsibility and sustainable supply strategies are less about doing good and more about mitigating risks, reducing operating and supply costs, and increasing profits.

“We’re at the threshold of a different era, one in which smart companies are trying to figure out how to profit by solving the world’s big environmental problems,” according to the article. And many of companies featured by Fortune are driving profits through sustainable supply strategies:

• Continental Airlines has spent more than $16 billion over the past 10 years to replace its fleet with more efficient aircraft. The airline is also working with suppliers to design more fuel-efficient engines, build energy efficient terminals, and track carbon emissions and recycling.
• Tesco’s shift to energy efficient stores running on wind power and biodiesel delivery trucks will help cut its energy use in half by 2008. The U.K. grocery giant is tracking the “carbon costs” of the products grown and produced by its suppliers. Tesco has also linked senior-management bonuses to energy- and waste-reduction targets.
• S.C. Johnson continues to work with suppliers to uncover eco-friendly and recyclable materials to replace pollutants in its core products, such as Windex and Saran Wrap. The company has also created a classification system that evaluates the impact of thousands of raw materials on human and environmental health. S.C. Johnson now licenses this “Greenlist” process royalty free to other companies.
• Patagonia, a pioneer of the sustainability movement, continues to tap its raw materials sourcing group to identify new materials and processes to make its products as sustainable as possible. For example, Patagonia worked with a a Japanese fabric supplier Tejin to invent a process by which polyester can be almost endlessly recycled. And Patagonia now encourages customers to send back their worn-out clothes to be recycled. The process helps the environment, strengthens Patagonia’s brand, and cuts material and energy costs for the company.
• California’s new law to cut the state’s greenhouse-gas emissions 25% by 2020 and to cut the carbon content of transportation fuels is pushing suppliers from automakers to cement makers to embrace more sustainable designs, materials, and manufacturing processes.

If these examples aren’t enough to demonstrate the positive and long-term impact sustainable supply strategies can have on corporate costs, security, and profits General Electric CEO Jeffrey Immelt clears things up: “The opportunity to provide environmental solutions is going to be one of the big four or five themes of our generation of business leadership.”

Supply managers should not embrace sustainable approaches just because it’s good for the environment or even just because it’s good for the business. But because its good for the supply management function and your personal career.

Sustainability is quickly shaping up to be one of those watershed moments that vaults supply management into the corporate spotlight. (Like the Energy Crisis of the 1970s or the threat of lower priced, better quality products from Japan in the 1980s.) Savvy supply management organizations will use sustainable supply as a method to demonstrate how they can support the corporate agenda and contribute value to the company – in the form of secure, long-term supply, enhanced corporate brand, and bigger profits.

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