By Meryl Bushell

Talk of sustainability has grown considerably over the last 10 years, but how much of the talk is translated into action, especially in these challenging economic times?

When I first started having discussions about CSR in supply chains I was met with a lot of resistance. It was not easy to convince others that there were business benefits in adopting ethical and sustainable practices in procurement. I can remember many debates where the topic was dismissed as unimportant or “hobbyist”.

Over the years, climate change science has alerted the developed world to the folly of ignoring the impact of CO2 emissions and a huge number of organisations have started to take action to limit their environmental footprint.  But how many organisations have done this in a rigorous and thorough way? Most organisations start by looking at their own usage and introduce programmes to reduce their in-house energy consumption. At the simplest level these are about turning the lights out and reducing the heating a notch or too. We have all seen hotels pleading with us to reuse our towels, and many companies have introduced double sided photocopying or conference calls in place of travel. While worthy, these initiatives are hardly ground breaking and cynics will remark that they smack of self interest as they double as cost saving initiatives.

Some organisations pick a high profile sustainability item and channel all their efforts into their flagship area – many bespoke recycling activities fall into this category.

Few organisations meet best-practice levels of a comprehensive sustainability programme which encompasses all of their activity. I believe that there are three areas that need to be systematically addressed:

Own Use
Ensuring that all in-house production and operating activities are executed with minimum impact on the environment (and this does not mean coming down heavy for items affecting employees, but allowing senior executives to drive around in gas-guzzling company cars).

Bought in Goods and Services
Laying down minimum standards for suppliers and actively selecting only those goods and services which meet environmental specifications. Simply designing a questionnaire and getting suppliers to tick boxes serves only to keep bureaucrats  employed. Sustainability standards should be part of every adjudication process, and given the same level of weighting as other product specification items. Quality checks and audits should take place for sustainability criteria in the same way as they do for other criteria.

Product and Service Design
Developing goods and services which actively help an organisation’s customers and stakeholders improve their environmental impact.

Of course, sustainability should not be constrained to items impacting the environment but should also embrace human factors, diversity and ethics. The credit crunch and the subsequent economic downturn have led many firms to abandon their high ideals and instead drive for short-term cost savings. If they had studied the available research they might have thought twice before embarking on this course of action.

While consumers are indicating that the financial climate may force them to purchase fewer organic products, demand for Fairtrade and other sustainably-sourced produce is holding up, and if anything the indications are that demand will increase. In studies undertaken by Feel Research, 92% of consumers claim to be willing to pay extra for ethically-sourced products, and a recent PricewaterhouseCoopers report found that 58% of consumers said they are currently buying fewer sustainable products than they would like to.

So, driving comprehensive CSR policies and practices islikely to help organisations to maintain and win market share and revenues even in an overall declining market. The business case for CSR in supply chains is even stronger in times of economic woe, and procurement professionals should be championing sustainability at the board level to help their companies survive and thrive.

Meryl Bushell is an independent consultant and executive coach. She is the former chief procurement officer of BT.

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BT is currently working towards a carbon intensity reduction target of 20 per cent by 2010 (a saving of some 200,000 tonnes of CO2), and it’s taking no prisoners – as some of its suppliers have already found to their not inconsiderable cost.

“We recently surveyed 1800 of our suppliers and graded them all on a scale of 0 (those who have no sustainability strategy in place) to 3 (those who are almost there),” Donna Young, head of environment and climate change BT Group, told Procurement Leaders in an exclusive interview. If you’re a zero then you won’t get on the tender list,” she said. “That’s not to say we then abandon them, part of what we’re trying to achieve here is that we work with them to get them started on the road to where we, and they, need to be.

“In terms of our supply base it has been a very positive piece of work, and hopefully we’re now starting to see an appreciation of what they can do within their orgainsation – not just in the products they sell and manufacturer but across their entire supply chain.

“We’re well aware that these suppliers aren’t only working with us, so anything we can do to set them on the road to a more sustainable future benefits everyone. We’ve got companies in all areas of the world that are doing well, we’ve seen some really good practices in China, for example, but generally it depends on the attitude of the individual company and it depends on the industry. Behaviours are the biggest issue right through the value chain.”

When you consider that BT has been involved in £2.2 billion worth of bids in the first ten months of 2008, the cost of neglecting sustainability has never been as high.

BT, which started measuring its carbon footprint in the early 1990’s, long before the majority of its major competitors followed suit, now builds environmental requirements into its procurement contracts as standard practice. And it’s this engagement with suppliers, along with BT’s 110,000 strong workforce that Young identifies as being crucial in the company’s quest to lead the field in an area which, she admitted is still seen elsewhere as a “nice little add on”.

“Sustainability is now on every person’s lips,” Young said. “And it’s certainly very much at the top of the agenda at BT – it’s on the whole board’s mind.

You have to make sure that it’s embedded into the organisation and I believe this is something we’ve been very successful at.”

Another factor occupying the minds of board members at the present time is cost, and in an industry as energy-intensive as BT’s, it’s little wonder that every penny counts.

Young said: “No-one in procurement needs telling that the cost of energy has risen considerably over the past 12 months, which is why it’s so important for us to do all we can to minimise our usage. If we can cut consumption then it obviously does far more than simply reduce our carbon footprint – it makes a lasting contribution to our bottom line.”

BT, like the technology it relies on, has come a long way, and Young appears determined to leave her mark – although you might struggle to see her footprint.