I was struck by a presentation at a Sydney conference recently. It wasn’t so much the content or the tag-team delivery that got my attention. It was because the presenters were on the cusp of something very important.
…on the cusp of something very important
Well before April 2013 when the world was stunned by the Bangladesh garment factory tragedy, at least one Australian company (unconnected with the clothing industry) was analysing the global social impact of its business. Australian printing company Focus Press has used social life cycle assessment (S-LCA) to unpack its supply chain and reveal hotspots where social inequity or harm is indirectly resulting from its business. Data is coarse but the company’s sustainability team was presenting the heatmap they have successfully produced, which they rather hyperbolically call the ‘flow of misery’.
Companies like Focus Press are leading the way in second generation sustainability. They are equipped to reduce business risk by opting out of transactions that indirectly support practices like under-age labour. Supply chain intelligence informs input substitution and the surgical removal of implicated suppliers wherever they operate in the world, even if they are two or three tiers back in the supply chain.
But B2B market signals – cancelled supply contracts or reduced orders – are by nature asymmetrical. They are received as echoes by remote players. Chances are order books will be filled up by other customers and things will remain much the same on the ground.
What’s tantalising about this story is how close we are to the next step – actually making a difference on the ground using the same supply chain intelligence.
Making a difference at the grassroots isn’t new. The coffee industry with its highly visible supply chain has begun to engage remote stakeholders in a ‘more good and less bad’ business model. But attempts by the likes the Rainforest Alliance and more recently Nespresso’s Ecolaboration, have struggled with formidable geographical, cultural and language obstacles.
Supply chains are complex. Enter social media. SM offers global reach, reciprocity, and unprecedented power to mobilise ideas. It’s also largely free of government control and has proved to be a powerful, if amorphous, agent of change. Can SM propel sustainability into a third generation? Here’s how it might start to fix things that clearly aren’t right in your supply chain.
The first application is already under way; communicating corporate sustainability efforts more widely and listening to the echo. Futerra’s Solitaire Townsend observed recently that the sustainability fraternity is having difficulty moving from the 140 page report to the 140 letter tweet. But inevitably social media’s speed and buzz will make the sustainability report, even the latest G4 integrated report, almost irrelevant. Like automated trading now obviates the use of P&L statements by short term investors. SM elevates the narrative of sustainability to a conversation and gives our upstream suppliers a voice they never had before. It seems to me that every time a sustainability report comes out there’s someone wanting something that’s not in it. Social media platforms are very good at delivering on this.
Global reputation is hard-won. But it can be a hungry animal that needs feeding and nurture. Remember Shell’s corporate glasnost in the 1990′s – People Planet and Profit? At its core was the Tell Shell campaign which was truly innovative but it suffered from selective hearing and delayed response. Like my six year old. Imagine that memorable campaign turbocharged with the dialogue we see on Twitter today. It would have been something alive, nourishing, and steadily building up the trust and shared vision Shell so dearly needs now. We human beings invented language for conversation so we’re accustomed to getting a response in less than 12 months.
Another natural fit for SM is a platform for engagement to build shared value. What if UK supermarket chain Tesco had warmed up its supply chain before launching their ambitious carbon labelling scheme in 2007. The scheme was widely praised but fell over due to its perceived complexity. SM was just born for projects like this. Given sufficient resources it can push through from conversation, to shared vision, and a short step to shared value.
How smart was General Electric’s Ecomagination competition in 2010! A campaign that effectively gave GE a global R&D department without the associated cost. My problem is your problem; internet-savvy corporates vertically integrating their challenges and solutions. Another more recent example is carbon insetting where large companies fund their suppliers’ abatement projects rather than buying carbon offsets. Double benefit – reducing carbon risk plus turning a recurrent liability into a permanent solution. It’s not hard to see crowdfunding rather than shareholders’ cash being used to fund initiatives like this in the future. Where suppliers are small or operating in disadvantaged regions of the world, capital will not be too difficult to mobilise on emotive grounds. Either way a well-resourced SM initiative gives stakeholders real or perceived role in finding solutions.
There are probably many more stories and I’d love to hear them. But does social media really have the power to prevent and/or cure dysfunction uncovered in the supply chain? Companies that have done the math, highlighted business risks outside their factory gates, and reported and managed the risks internally, are at a crossroad. Some will choose to ignore their particular flow of misery. Others might want to deal with it but face a fiendishly complex supply chain. Using social media a third option may be at hand. It has certainly matured and arrived at an opportune time. It may even be the tool to propel corporate sustainability to a third generation.
Part 2 of this post will look at where social media is being applied downstream, working with customers.
The Guardian Sustainable Business is hosting a one day Social Media for Sustainability course on 26 September in London.