From GSCC: “Ma Jun is one of China’s most prominent environmentalists. His book, China’s Water Crisis, has been compared to Rachel Carson’s Classic work, Silent Spring, which was instrumental in driving environmental change in the United States. “It’s not easy being green,” said Kermit the Frog of his amphibian existence. Talk to sourcing managers, auditing firms, and NGOs and you’ll hear it’s not so easy being truly green in supply chain management either.”
“To the average consumer with a do-gooder instinct, but with no insider experience, it’s hard to understand what “green” really means in the corporate sector. Rebecca Kanthor did an investigation for CHaINA into the topic and discovered that greenwashing, outright lies, and fake documents are a few of the dirty secrets of green supply chain management.
Lesson 1: In the financial downturn, more than ever it’s all about the bottom line.
Green is the new gold, the current adage says. Paul McCann, Director and China General Manager of Smurfit-Stone, a US company providing packaging solutions for companies manufacturing in China, says interest in sustainability has been a growing trend among his company’s clients for the last year or two.
Why the sudden interest? Most companies commitment to greening their supply chain is no more than a commitment to efficiency and cost-cutting, with green being an added bonus. It’s not that companies suddenly have the urge to go hug a tree; it’s because financially these changes made sense. 2008’s booming commodities market had a huge impact on companies interest in reorganizing their supply chains. Rising oil costs impacted the price of other commodities and made recycling materials and reevaluating sourcing locations smart financial moves.
Industry insiders say that in this uncertain economic climate, greening efforts by most companies have to impact on the company’s bottom line; otherwise it is not a financially viable direction.“Practically speaking, in this financial situation it’s going to be tough for companies to pay more money to be more environmentally friendly,”McCann says, “so I think companies will start with opportunities where becoming more environmentally friendly also saves them money. It makes sense right?”
If green is code for cost-cutting, is much of anything in the way of environmental sustainability actually being achieved? Not much, says one director of an industrial goods manufacturer who asked to remain unnamed. “If you’re just the normal company sourcing in China, you have zero control over where it is green, and that’s not your concern. Your concern is best price.”
From the supplier standpoint:“You’re damned if you do and damned if you don’t. If they [suppliers] became super compliant, the price would just rise and they wouldn’t get any new buys. All the factories would close.” He concludes, “Everything about green is PR now.” He acknowledges that for companies with large amounts of capital to inject into Chinese supplier infrastructure, perhaps the claims of greening efforts have some legitimacy. But in his experience that’s the extreme minority.”
Green or Green Washed? 7 Lessons in Green Supply Chain Management