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Home > By DEPARTMENTS > Green Operations > Standard Operating Procedures for Green and Sustainable Business Operations

CSR Provides Standard Operating Procedure for Real Efficiencies

Corporate social responsibility is also smart business that provides energy and cost efficiencies. This IBM report outlines some of the significant savings that can result from supply chain optimization and better information management.

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Research Review by Carolyn Allen
Information is the heart of green. Ignorance, no matter how blissful -- for the moment -- has a way of reaching out and biting our behinds! Science and technology depend on having good information and using it with precision. And so does going green.

A research report by IBM, "Leading a sustainable enterprise: Leveraging insight and information to act" points to some of the best practices in corporate sustainability responsibility programs.

"Outperforming organizations have proven to be far better at casting a wide net for information across their ecosystems.2 They are also collecting information that is more relevant to understanding and meeting the performance challenges of operating in a sustainable manner," reports Eric Riddleberger and Jeffrey Hittner of the IBM Institute for Business Value.

More than two-thirds of organizations the research team surveyed focus on CSR as part of an integrated business strategy to grow new revenue streams and control costs. As a result, they face an entirely new set of decisions. Can they cut down on waste without increasing the price of products? Do they need to rethink distribution options to reduce carbon and the impact of volatile energy prices? Should they segment products and services to meet a growing number of consumer sustainability concerns? The answers to these and other questions like them involve managing an intricate new set of tradeoffs.

87 percent of business leaders surveyed say they have focused their CSR efforts to create new efficiencies.

Some of the greener tradeoffs that are looked to for creating those efficiencies include:

  • Tradeoffs between carbon prices and consumption
  • Logistics costs
  • Carrier types and load capacity
  • Information on product demand
  • Customer service strategies

Simple changes in sequencing can create significant savings, such as Friesland Coberco Dairy Foods found when they investigated how their flavor ingredients are added. They were able to shift adding them at a later stage in the supply chain, a change that can cut inventory and transportation by an estimated 127,000 miles per year, with corresponding carbon reductions.

Implementing sustainability strategies requires a sound understanding of tradeoffs related to areas like quality and customer service, as well as costs and environmental impact.

Early efforts suggest that collaboration is the best approach. Instead of going it alone, leading organizations are exchanging information with customers, industry groups and nongovernmental organizations (NGOs) to increase their access to a wider pool of knowledge and their ability to benchmark. They are joining with partners, suppliers and even competitors to exchange leading practices and ultimately build out common standards for sustainability. Standards are a requirement for effectively implementing a CSR strategy over the long term.

By collaborating and utilizing up-to-date information and standards, today’s organizations can improve sustainability, while also increasing operational efficiency and performance.

Optimization for Sustainable Efficiencies

The survey asked leaders about three information areas related to sustainability: operations, supply chain and customers.

Results indicate that

  • Operational information needs to be more timely
  • Supply chain information is still too insular
  • More customer information is needed

Over half of the business leaders surveyed consider the open sharing of information a high priority.

Until recently, however, organizations have tended to share information reactively – in response to stakeholder demands. Leaders who expect to gain business advantage from corporate social responsibility are developing new ways to inform and educate their stakeholders: customers, employees and partners.

Benchmarks and leading practices are important guides to use in setting objectives.

Organizations are reconfiguring transport and logistics operations and weighing the tradeoffs.

Point-of-sale information on delivery options could provide opportunities to reduce costs and carbon footprint.

Making packaging more flexible and options, like Tesco is testing, makes education a mutual endeavor. The Tesco pilot program enables customers to actually recycle when they buy. Before taking purchases home, customers can take off product packaging they don’t need and leave it in the store!

Packaging is a huge part of our urban consumer society, and creative strategies that both protect the product until it gets into the consumers hands...and reduces content that goes to a landfill is a win-win strategy.

IBM suggests the following strategies:

  • Identify information gaps and analysis needs.
  • Align objectives with those of stakeholders; then prioritize.
  • Assess leading practices and benchmarks.
The answers to these questions can help you set and prioritize a course of action.

Edited by Carolyn Allen, owner/editor of California Green Solutions
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