By Stephen Hall, Senior Staff Writer

So Copenhagen was, shall we say, underwhelming. But here’s a new decade and many will keep the faith that business can make the difference and lead the progress toward sustainability. Plenty of companies have expressed good intentions, but maybe it’s time to look at something more concrete.

Look at Nike. Here is a brand that has had, and for some still does have, image problems. It announced its corporate responsibility report for 2007-09 in January.

“Sustainability is key to Nike’s growth and innovation,” proclaimed Nike president and CEO Mark Parker. Accordingly, the report is teeming with aims such as achieving zero waste in the supply chain, being ahead of the curve on governance and energy price increases, and using a web-based marketplace to share sustainable innovations.

Nike claims it cut 4% emissions from its supply chain between 2008 and 2009. However, unlike many other companies whose reductions corresponded with the shrinking business, Nike maintained, admittedly weak, growth throughout the period.  

While this is undoubtedly a minor triumph, its strategy is unusual in several ways. The company has no reduction targets. It also recently made the decision to stop purchasing carbon offsets.

A negative way of looking at this would be to say that these cuts are sufficient to help the brand turn a corner towards a more positive image. By setting themselves fewer targets, the company is able to dismiss any failures or indiscretions as it will be accountable only to itself.

But is that enough?

On one hand, sustainability undoubtedly slipped down the agenda for some during tough times in the economy and companies like Nike that have kept up the pressure should be recognised.

On the other, as recovery very gradually spreads over the Eurozone and the US, how companies respond to the challenge of increasing production whilst maintaining or even reducing those recession-period emission levels will be crucial.

If a few years down the line the majority of companies are able to back up their boasts about sustainability with consistent cuts, there’ll be clear evidence as to which schemes work, whether carbon offsetting and targets are necessary to drive transformation or whether the demand for ‘green goods’ alone is enough.

This then, I’d argue, is a tipping point.

For a company that has long broadcast its green credentials it should come as no surprise to find that Sky is setting itself some ambitious sustainability targets throughout its supply chain as the next decade approaches.

It was back in 2006 that Sky officially declared itself carbon neutral – although a string of complaints to the Advertising Standards Agency in 2008, which were subsequently rebuffed, cast some doubt on its claim – becoming just the second FTSE 500 firm behind HSBC to do so.

Now, after tackling the parts of its supply chain that were within easy reach, Sky is reaching out to its suppliers like never before in order to hit an ambitious new set of targets.

And as Fiona Ball, the company’s head of environment told Sustainable Sourcing in an exclusive interview, the sky’s the limit.

“We wanted to show that being carbon neutral was only the start, not the end of the journey,” says Ball. “The ongoing commitment to reduce our emissions is really the key for us.

“Once you’ve looked at the low hanging fruit, with respect to areas like electricity usage on site then to continue making reductions you have to make a significant investment.”

Recent history has shown that Sky isn’t afraid to put its money where its mouth is – and its commitment to reduce emissions across ten separate targets, including its supply chain and procurement operations, remains as strong as ever.

“We’ve got an over-arching target of reducing emissions by 25% per £1m of turnover by 2020,” says Ball. “For our supply chain we have a target with respect to engaging with our 50 most carbon intensive suppliers over the next three years and really engaging them in understanding their carbon footprint and also ways that we can reduce our emissions in the products and services they provide to us.”

With most of BSkyB’s major suppliers already signed up to reducing emissions themselves, the major challenge facing the broadcasting giant lies with its smaller, niche suppliers.

“We have quite a strict procurement process when it comes to environmental criteria but we don’t want to just go out and set a target on environmental policy,” says Ball.

“We want to help them understand what they can do to reduce their footprint and although a lot of the big companies already have internal teams tackling this area, we wanted to really focus on small and medium-sized businesses that don’t really have the expertise in-house.

In collaboration with its environmental charity partner, Global Action Plan, Sky is offering consultancy to SMEs throughout its supply chain. And it this kind of innovative approach to cross-working that Sky hopes will make a major difference over the next decade.

“That level of engagement is quite different,” says Ball.

Indeed it is – and it’s the kind of approach that is lifting Sky’s environmental programme to a higher ground.

Wal-Mart is making “great steps” to achieving its sustainability objectives, according to the company’s CEO, Mike Duke.

Back in July, Wal-Mart announced plans to develop a sustainability product index for its global supplier base – and despite some resistance from suppliers – the company believes it has now taken a giant stride forward in its sustainability drive.

Key to the company’s sustainability drive was a questionnaire, which aimed to give the company a greater insight into the green and ethical credentials of its suppliers.

“The survey is a key first step toward establishing real transparency in our supply chain,” said John Fleming, chief merchandising officer, Wal-Mart US.

The deadline for US suppliers to complete the survey expired last month, and now the process is being repeated with its suppliers in Europe and Asia.

With that now underway the company is looking to the future with confidence, particularly after achieving massive improvements in its logistics operation.

According to Elizabeth Fretheim, Wal-Mart’s director of strategy and sustainability for logistics, Wal-Mart drove 90 million fewer miles last year – a saving achieved through increasing packing loads on its trucks, using alternative routes and upgrading the technology on its truck fleets.

Matt Kistler, the company’s sustainability senior vice-president, meanwhile, claimed the company is making progress on achieving its three major sustainability goals – to be supplied by 100% renewable energy, to create zero-waste, and to increase the sale of sustainably produced products.

After its initial success Duke said Wal-Mart was now looking to speed up its push.

“We want to broaden our focus and accelerate,” he said. “There have been great steps taken this year on top of the progress made in previous years.”

Asda has slammed suggestions that it is failing to deliver on sustainability – rubbishing a report which claimed that its sourcing practices were flawed.

A study by Consumer Focus, the Government-backed watchdog, criticised Asda for failing to source sufficient local fresh seasonal produce.

When the research was carried out in July of this year, just 59% of Asda’s fresh produce was sourced from the UK, compared against an average of 75% at most supermarkets.

Asda’s score was labelled as ‘dismal’ in the report – a description that prompted a furious response from the supermarket-giant, which claimed that the study was “not worth the recycled paper it’s written on”.

And while Consumer Focus claimed that “Asda should be doing far better”, the company’s sustainability chief, Julian Walker-Palin, defended the company’s sourcing policy and said that the group had failed to carry out a thorough audit of its stores.

“Sourcing certain products from the UK would mean creating artificial growing environments with a higher carbon footprint than sourcing overseas and that is without considering the massive importance of our trade with developing countries so they can trade their way out of hunger,” said Walker-Palin.

Lidl and Aldi also came in for criticism in the report, leading Friends of the Earth to call on supermarkets to do more when it comes to sustainable sourcing.

“Despite shouting loudly about their green initiatives, some of the biggest supermarkets are still failing to put planet-friendly food on their shelves,” said Helen Rimmer, Friends of the Earth’s supermarket campaigner.

Shipping costs could rise considerably if new EU plans are rubber-stamped at global climate talks later this week.

The new plans – which could force the shipping industry to cut its carbon dioxide emissions by 20% below 2005 levels over the next ten years – could cost the industry up to €6bn a year.

EU diplomats have claimed that any cuts could be linked to a tax on fuel, with any new scheme potentially generating billions of dollars to help poor countries deal with the potential impact of climate change – currently a key stumbling block as the world moves towards the Copenhagen summit at the end of 2009.

At present emissions from both the shipping and aviation industry – which could itself come under pressure to cut emissions by 10% in comparison to 2005 levels – are not covered by the Kyoto treaty.

The move is unlikely to be welcomed by some of Europe’s major nations. An industry association report published last week by Britain, Belgium, Norway and Sweden argued that shipping would be better suited to a cap and trade system, as opposed to a tax-based.  

However, there is little disputing the impact of shipping on sustainability targets.

Research published in 2007 using figures from BP by researchers at the Institute for Physics and Atmosphere in Wessling, Germany, found that annual emissions from shipping made up almost 5% of the global total. 

A further study by the International Maritime Organisation estimated that emissions from global shipping fleets could increase dramatically as demand for larger ships continued to grow. It warned that without action emissions from ships could increase by a staggering 72% by 2020.

German sportswear giant Puma is to delve deeper into its supply chain to ensure that its global supply base keeps pace with the firms sustainability aims.

According to the company’s 2007/2008 sustainability report, Puma will increase the monitoring of its sub-contractors over the next two years after it emerged that labour standards in some of its factories were falling short of expectations.

Puma began its current auditing programme in 2000, and has visited its tier one suppliers at least once a year in the intervening period.

Despite an extension of its human resources training programme over the past 12 months – a programme which is to be extended further this year – the company found that some suppliers were still failing to provide adequate provision in areas such as sick pay and maternity leave.

Reiner Seiz, the company’s chief supply chain officer, insisted that conditions in Puma’s Asian factories were improving but acknowledged that challenges remained.

Seiz also ruled out scaling back the company’s global sourcing operation.

“Basically, we feel a responsibility towards our employees at all Puma sites around the world,” said Seiz. “Bringing our production facilities back to Germany is out of the question.

“We closed our last production plant (in Germany) in Herzogenaurach in 1993. Costs vary so much around the world that relocation is no longer an option for us. Even if we wanted to, this is just not feasible.”

Despite their current problems Puma is far from the only sportswear giant to experience issues with supply chain visibility in Asia.

Earlier this year Nike came into conflict with Beijing over Chinese labour laws after an investigation revealed that workers as young as 16 – the legal working age in China, but a contravention of Nike’s own code of conduct, which specifies that workers must be 18 – were working for one of its suppliers in the country.

Consumer goods giant Proctor & Gamble (P&G) has announced an ambitious expansion of its sustainability targets, in addition to signing a new print services contract that, it hopes, will massively reduce its paper consumption.

The company’s latest move follows on from the publication of its five sustainable strategies in 2007, relating to areas such as sustainable innovation products (SIP), carbon emissions and water consumption.

P&G’s revised goals for 2012 include a $50bn target for the sale of SIPs – a massive $30bn increase on the figure set in 2007; a 20% reduction (per unit of production) in carbon dioxide emissions, energy consumption, water usage and disposed waste from plants, a doubling of the 2007 target; and the delivery of three billion litres of clean water through the company’s Children’s Safe Drinking Water program.

The revised targets do, according to the company’s vice president of global sustainability, Len Sauers, illustrate P&G’s continuing commitment to sustainability.

“P&G’s long term, disciplined approach to sustainability enables the company to continuously assess progress and establish targets that further improve results,” said Sauers. “Our “no tradeoffs” approach to innovation means consumers do not have to choose between the performance and price they expect with being sustainable.”

P&G’s latest deal with Xerox appears to mirror that approach. The new five-year contract will see Xerox manage P&G print shops and both office and home based work environments, in addition to creating a new web portal for the procurement of equipment and consumables.

The company claims that the tie-in could see print-related power usage fall by as much as 30%, as well as significantly reducing P&G’s reliance on paper by 20-30%.

“Simplifying our global printing structure helps increase reliability and efficiency, transforming the way we work,” said Filippo Passerini, chief information officer and president at P&G global business services division. “This innovative initiative is one step on the journey to ‘go digital’ and make our workplace more sustainable.”

Richard Edwards

One of the world’s largest consultancies has insisted that the current economic climate will not divert it from achieving its sustainability objectives.

PricewaterhouseCoopers is working on a number joint procurement initiatives with its suppliers, and Roger Reeves, partner with responsibility for infrastructure and procurement, claims that although cost is a fundamental consideration, sustainability remains paramount.

The claim comes just weeks after PwC announced that it had acquired Sustainable Finance Limited – an international advisory firm with expertise in environmental and social risk management in the financial sector. “As the UK’s largest professional services firm we know PwC has significant buying power and that also brings responsibility too,” Reeves says. “We work hard to incorporate not only economic but social and environmental considerations into the purchasing decisions we make.

“In the current economic climate cost is important, but we will not compromise our sustainability objectives in our selection of goods or services.”

Among the plans that PwC’s sustainability and climate change client advisory practice is working towards include reducing waste production (with an aim of sending no waste to landfill by 2013); reducing office energy consumption by 10% over the next 12 months; and increasing the use of teleconferencing to cut down on air travel across the world – a policy that PwC estimates has already saved it over one million miles in air travel in the past year.

The company’s purchase of Sustainable Finance Limited is a further indication of the company’s determination to increase its sustainability services offerings, an area of its business that has grown four-fold recently.

“We believe it’s vital for us to accelerate our investment in sustainability services, particularly in the financial services sector as it seeks to rebuild trust and confidence,” said Ian Powell, senior partner and UK chairman at PwC. “This deal positions PwC as a leading provider of sustainability services, with both the strategic expertise and delivery capability to help clients explore and assess the extensive business opportunities arising from the urgent transition to a low carbon economy, adaptation to climate change and other sustainability trends affecting water, resources, and labour.”