Technology at Work

Guest-blogging today are Eric Riddleberger, global leader for IBM’s business strategy consulting practice and Jeff Hittner, corporate social responsibility leader for IBM Global Business Services. They work with a range of industries and clients to address the emerging role of corporate social responsibility and sustainability in core business strategies. The survey referenced in this post can be found here:

From a sustainability standpoint, it was like declaring a moonshot.

When Walmart recently announced that it will create an index detailing the full social and environmental impact of every product it sells, it highlighted one of the most vexing issues companies face today -- managing the many tradeoffs of creating "green" or sustainable products and services.

The challenge is to optimize each product or service for its total environmental and societal impact -- taking into account an intricate set of possible considerations and alternatives. Put simply, it's not good enough if water usage is reduced but waste disposal increases. And to be truly sustainable, a company must optimize offerings in a way that also maximizes business performance.

The implications of this are staggering. Imagine tracing the energy and water use, waste, labor standards, and carbon dioxide and other greenhouse gas emissions associated with every phase of every product a company makes or sells. That covers sourcing and delivering raw materials, development and manufacturing, packaging and delivery, consumer use, and reclamation and recycling at the end of life.

Fully understanding all the implications associated with sustainability requires a 360-degree perspective. And it entails massive collection of information not only inside a single company, but across hundreds or thousands of suppliers around the world. And it requires understanding the consequences of any decision to optimize a given process or component.

Three major factors are driving this level of introspection:
-- Key stakeholders such as customers, investors, business partners, and current and prospective employees are monitoring sustainability performance and factoring it into who they'll do business with, work for and buy from;

-- The costs associated with energy, water and waste are volatile and rising, so cutting consumption and improving efficiency are essential to the bottom line;

-- Government regulations on sustainability issues are becoming increasing stringent. Companies that fail to comply face growing financial penalties, restrictions on their business operations, and negative publicity.

While this trend has been emerging for quite awhile, a recent survey our company conducted with business leaders from around the world showed a couple things. First, most of them are unprepared to measure and improve their own sustainability. Second, they are unprepared to monitor suppliers for it as well.