Make the Sustainable Shift
Proceedings — Session: B-2
2011 ISM Diversity Summits
February 9-11, 2011
Boca Raton, Florida
Presenter: Icy L. Williams, Chair, National Sustainability Coalition
After retiring from Proctor & Gamble a few years ago, Icy L. Williams thought retirement would mean spending more time with her family — "but, I couldn't give up caring about small and diverse businesses," she told summit attendees.
This concern led Williams to accept the president position with the National Sustainability Coalition, which collaborates with public and private resources to provide education, training and third-party green business certification. Williams strives to arm these close-to-heart businesses with the sustainability advantage.
"Green, value and cost is the triple bottom line of sustainability," she explained. "But, it's how you get to that bottom line that's important."
Why Small and Diverse Business Development?
Of course, Williams' motivation is business-focused, too. As she pointed out, there are 25 million small and diverse businesses operating in the U.S. "They're what will drive the economic recovery," she explained. "So, they're the ones who need to make the [sustainability] shift to level the playing field."
To make it happen, Williams contends that sustainability-focused education, training and certification are critical for small and diverse businesses. She spends a lot of time asking these business owners some critical questions: Is sustainability part of your marketing plan? and Do you reference on your website how you're addressing all three elements of the sustainability triple bottom line — green, value and cost?
A Little Background Check
Next, Williams zeroed in on the United States — what it "takes, makes and wastes." Although Americans represent just 5 percent of the world's population, they use 30 percent of the world's resources and create 30 percent of its waste, which is the single largest contributor to global warming. "So, as you think about making the shift [to sustainability], start with yourself," she advised attendees.
Given what Williams referred to as America's "disposable mind-set," that's pretty good advice. As she pointed out, U.S. products have a six-month life-cycle, on average, from production, to consumption, to disposal. She offered up plastic water bottles as just one example. "A plastic bottle never leaves the landfill, but it's a must in many, many households."
In this era of rising energy costs and environmental impact issues, however, Williams said 75 percent of major U.S. corporations are moving from a pollution-based economy to a green one that embraces the reduce/reuse/recycle model. Another major factor in this shift is increasing corporate monitoring by stakeholders.
"And by stakeholders, I don't just mean internally," she clarified. "They do include employees, but also customers, boards of directors, investors, potential employees — anyone with a vested interest in your company."
As sustainable corporations strive to maximize stakeholder value while reducing climate impact, the supply chain is on the front lines. "Now, the question gets asked in the RFP: 'What's your sustainability plan?'" Williams explained. "Additionally, supply chains are relating their processes to the triple bottom line of society/environment/economy."
As an example of a corporation that's raising the bar of sustainability worldwide, Williams offered up Wal-Mart. Not only has this retail chain reduced supplier packaging by 5 percent, it also requires all tier-one suppliers in its supply chain of more than 21,000 businesses to "be sustainable" — in other words, to submit product content and environmental impact reports. "And if a supplier still doesn't understand what Wal-Mart means by 'being sustainable,' what they do know is that they need to get started," Williams added.
Her former employer, Proctor & Gamble, is another example of corporate social responsibility leadership — heavily focused on the consumer. "From marketing to the product supply chain, P&G has been on this journey for probably 40 years," she explained. "During that time, P&G had been addressing their consumer on 'how to get the product right to meet the consumer's needs.'"
Shortly after Williams retired in 2009, P&G rolled out its global environmental score cards to more than 500 of its key suppliers to assess their environmental footprint. Additionally, P&G's commitment is to save a life every hour through its Children's Safe Drinking Water Program, which will deliver 2 billion liters of clean water every year on the production of "future-friendly" brands. "So, corporations are conforming," she emphasized. "They're doing it at their own pace, but they're moving."
Finally, Williams offered up PepsiCo, the largest green power purchaser in the United States. Not only does it deploy green vending machines that use less energy, PepsiCo is also building a new plant to run almost entirely on renewable fuels and recycled water and minimizing plastic content in bottles. "And on its website, the company says it's looking at going to zero waste," Williams added.
The Business of Sustainable Supply Management
Williams believes that sustainable suppliers are competitive suppliers. Making the shift to sustainable supply chain practices is essential for supplier survival and growth, she asserted.
"Sustainable knowledge has become a requirement," she told attendees. "Integration of these skills into operations is critical at both the management — top-to-bottom — and workforce — bottom-to-top — levels."
This mind set shift and change can be accelerated with the completion of three levels of continuous improvement, according to Williams:
Level 1: Knowledge. Marked by leadership and organization assessment, business alignment and training, companies at level 1 in their sustainability shift are primarily establishing a business case for sustainable development. To do so, she added, many are using National Sustainability Coalition-provided interactive online learning tools that blend sustainability concepts and principles with organizational change theory.
Level 2: Skills. At this level, companies are mapping out sustainability plans and engaging stakeholders. Building a plan of action for sustainable business development has seven steps, according to Williams: 1) mini-audits to identify issues, 2) drafting of planning documents, 3) writing a sustainability action plan with accountability and measurements, 4) educating employees and securing buy-in, 5) creating internal change agents, 6) integrating green into business operations and 7) deploying the plan to employees, customers and key suppliers.
"You need more than the C-suite involved," Williams warned. "And, you can't move to X without understanding where you are right now. These [seven] steps aren't that different from any other organizational design and strategy process you already use."
Level 3: Ability. Once a company reaches improved levels of achievement, from implementing their sustainability plans and working on continuous improvement of their environmentally friendly sourcing efforts, they can request to have a certification audit completed. Certification is achieved through an on-site evaluation by a third-party verification conducted by a Supplier Excellence in Managing Sustainability© — certified auditor.
It All Starts With You
While all these processes are good, Williams reminded attendees that the reduce/reuse/recycle mind-set begins as a personal challenge.
"It's only possible once you understand the three pillars of sustainable development: home, work and community," she said. "Although corporations have been dealing with green, value and cost for a long time, this triple bottom line is also how we all stay in business."
Questions and Answers
An insightful question-and-answer session followed Williams' presentation.
Q: You mentioned that no common definition of "sustainability" exists. Are there metrics prominent in most companies?
Williams: The similarities have mostly been in the financial and people areas — safety, health, environmentally friendly workplaces and so on. From an operational standpoint, companies are gauging water usage, CO2 and greenhouse gas emissions, and energy and chemical use.
But, there's no consistency, best practices or standards other than the Global Reporting Index. Companies that are on the journey of sustainability are developing their own metrics based on their own research, collaborating with other companies and company data. We're still a country that thinks about consumption — and our mind-set for that consumption is "give it to me now versus later."
Q: How are small and diverse businesses getting started on sustainability?
Williams: If customers are requiring them to look at sustainable practices, they are. If not, few are taking it upon themselves to get it going.
Q: What costs are associated with getting sustainable development and sourcing off the ground?
Williams: My recommendation is to look at ROI — not just immediate, but long-term. Also, start small. Start at home. Or, track paper use in your company, for example.
— Reporting by RaeAnn Slaybaugh
About ISM Diversity Summits
Every year since 2009, ISM's Black Executive Supply Management Summit (BESMS), Hispanic Supply Management Summit (HSMS) and Women Executive Supply Management Summit (WESMS) have been co-located. Collectively, these events represent the annual ISM Diversity Summits experience hosted by Tempe, Arizona-based Institute for Supply Management™.
All three summits were developed as forums for diverse executives in supply management to come together and share their unique perspectives. Summit attendees learn from thought-leaders and change agents within their fields and representing leading organizations.