Is Your Supply Chain ESG Ready? (A SIG Summit 2022 Keynote Review)

esg in supply chain

In this second article from the 2022 SIG Procurement Technology Summit Keynote Series, we will tap into the expertise of an esteemed panel of industry leaders who will share their experiences with mobilizing their respective organizations' ESG initiatives to achieve progressive outcomes. Make particular note of the words progressive outcomes because implementing and maintaining an ESG strategy is not a destination but an ongoing journey that requires commitment and the agility to respond to ever-changing marketplace realities.

Rather than just a generalized or conceptual discussion on ESG, these individuals delivered personal and detailed accounts regarding the successful transformation of their supply chains to align with social imperatives and financial objectives. In other words, during the discussion, they effectively "blazed" a trail of understanding that can serve as a helpful roadmap for the successful implementation of your organization's ESG strategy.

No Longer An Option

In the recent Oliver Wyman article, Powering Your Sustainability Strategy Through Procurement, it is clear that the proactive implementation of a successful ESG strategy is not an option for organizations – not that it ever was.

The authors specifically talk about how "For many years, calls have been getting louder for business leaders to pay more attention to their organization's environmental, societal, and governance (ESG) strategy."

Fueled by "intensifying pressure" from all directions, including customers, employees, investors, and governments, good intentions must now materialize into tangible outcomes sooner rather than later.

Organizations that fail to deliver on their ESG commitments stand to lose a great deal. The loss in market share, investment in the company, and attracting and retaining top talent are just three fallout areas from those who do not take immediate action.

Bottling ESG Success

We have all heard of Coca-Cola. The company has been in the news regarding its ESG journey for the past decade. Of course, we didn't call it ESG back then.

Within the context of this history, in a course I am taking on sustainability in the supply chain, I found a case study on Coca-Cola very interesting.

According to the study, at one point, the bottler used 4 liters of water to make 1 liter of Coke in their manufacturing process. Given that there is only so much water in the world, there was a "push-back" from consumers saying it wasn't cool." In other words, they were calling the company out on it. Coca-Cola responded by completely re-engineering its manufacturing process, reducing the amount of water from 4 liters to 1¼ liters.

According to Robert Hanshaw, the Sr. Director of Procurement for Coca-Cola Consolidated, the ESG journey is "one of the pillars of what we (the Coke system) are trying to accomplish.

The company focuses on achieving water neutrality, sustainable agriculture, and a world without waste initiative through a three-pronged approach. With the latter, Coke is working towards getting 50% of recycled content into all of their product packaging by 2030.

So yes, as Robert put it, "we have had people push on us, but we have also been very thoughtful about how we can impact and what can we do to help meet our sustainability goals."

For example, they are ahead of schedule with water neutrality because Coke Consolidated's 12 manufacturing plants in their territory are all water neutral. Achieving this objective means that the company puts a liter back in for every liter of water used.

The key, Robert emphasizes, is to focus on what you are doing and be very intentional in the way you do it.

Besides thanking Robert, I would also like to thank Michael Koontz, Sr. Director Strategic Sourcing (American Tire Distributors), Mike Morsch, VP Procurement and Supply Chain (CDK Global), and Nagy Gad, Sr. Director Strategic Sourcing (Yahoo Inc) for being on our panel.

<< SIG Members: You can download the complete slide deck from this panel session in the SIG Resource Center >>

Dawn Tiura, President and CEO, SIG

Dawn Tiura, CEO and President of SIG, SIG University and Future of Sourcing Digital Publication, has over 26 years leadership experience, with the past 22 years focused on the sourcing and outsourcing industry. In 2007, Dawn joined SIG as CEO, but has been active in SIG as a speaker and trusted advisor since 1999, bringing the latest developments in sourcing and outsourcing to SIG members. Prior to joining SIG, Dawn held leadership positions as CEO of Denali Group and before that as a partner in a CPA firm. Dawn is actively involved on a number of boards promoting civic, health and children's issues in the Jacksonville, Florida area. Dawn is a licensed CPA and has a BA from the University of Michigan and an MS in taxation from Golden Gate University. Dawn brings to SIG a culture of brainstorming and internal innovation.