Corporate Responsibility and Sustainability
More and more companies are starting to make their sustainability efforts public, many of which have even set goals for cleaning up their supply chains. This is certainly a response to the rising demand from consumers for more ethical and environmentally friendly products and it isn’t that new of a trend. Every now and then we see a company get slammed in the media for some sort of exposure in their supply chain – Apple is a recent example with child labor.
This type of media exposure followed by corporate reaction is nothing new, but corporations publicly announcing plans to make their supply chains more ethical and more sustainable is becoming more frequent. A great example, Sea Delight recently made their plans for sustainable seafood public.
It makes good business sense for a company that sells seafood to buy its products from sustainable sources. Sea Delight, a leading frozen fish distributor, recently made its sustainable seafood policy public — and front and center — on its website.
Sea Delight partnered with FishWise, a sustainable seafood consultancy, to develop the policy. Moving forward, FishWise will collect data on the seafood Sea Delight procures and use the data to assess, monitor and create an evaluation framework.
The growing trend suggests that corporations are starting to see the value in sustainability.
What are some of the risks and rewards for corporations making these bold public sustainability statements?
– Consumers are buying more sustainable products more often – See the evidence here.
– The public announcement of a sustainability plan is great exposure for a brand. Even the intent to make changes may be enough to make some consumers switch brands.
– Consumers value honesty and integrity – building trust among consumers will strengthen brand loyalty.
– Corporations will improve the longevity of their products by ensuring the resources necessary to build them will be around in the future.
– Corporations with transparent supply chains will be much less vulnerable to negative publicity because they aren’t trying to hide the bad practices of their suppliers.
– Environmental and social responsibility will trickle down through suppliers and producers which will drive competition to meet sustainability standards on all levels of the supply chain. The first movers of each industry will set examples for their competitors and will have the opportunity to become leaders within their industry.
– There is a good chance that the price of a company’s products will go up as a result of sourcing their materials sustainably, which is bound to discourage some consumers from purchasing.
– If a corporation doesn’t meet the goals they have set they will be seen as unaccountable and their brand will lose value. However, if they exceed their goals the result will be vice versa.
– Creating sustainability plans and rearranging supply chains to meet lofty goals is difficult and expensive. If it is done successfully companies will be stronger, but for most industries it is not a trivial task.
It’s apparent that many corporations have weighed these risks and rewards and are seeing the benefits of moving toward sustainability and making a public statement about it. It’s likely that the first movers in each industry will have an advantage over their competitors as sustainability becomes more and more important to consumers. Who will come out on top in this new race?