Fortune, August 13, 2010
One year after Wal-Mart launched an ambitious plan to help its suppliers track their energy and materials use and carbon emissions, the effort has officially become a trend among corporate multinationals.
But these changes aren’t being brought in only for love of the environment, its being driven also by a slow- or no-growth economy, since lower energy and resource costs translate into higher profits.
The most recent entry among a handful of large companies starting programs to green its supply chain is Pacific Gas & Electric (PCG, Fortune 500), the California-based utility. PG&E recently bestowed its first "Green Supplier of the Year" award to Southwire Company, a wire manufacturer headquartered in Carollton, Georgia.
The award was won for converting almost one-third of its fleet to hybrid vehicles, reducing its landfill waste by 27% and eliminating almost all lead additives from its products.
PG&E is following Procter & Gamble, IBM and Wal-Mart by taking a more comprehensive approach that leaps beyond carbon foot printing into life-cycle analysis. The General Services Administration, the federal government's giant purchasing manager, has also recently asked its 600,000 suppliers to start providing greenhouse gas emission tallies.
Life-cycle analysis features a "cradle-to-grave" examination of how products and services impact the environment. And when it applies to supply-chain management, the savings from life-cycle analysis can be dramatic.
With sustainability and cost savings as tandem goals, many companies have aggressive targets in place.
Apart from multinationals every major company doing carbon and life-cycle analysis will need to examine all facets of its business in the post-BP, carbon-savvy climate.
Even though the Senate hasn’t passed an energy or climate change bill, companies will continue to seed green supply programs on their own as they are pressured by a need to cut costs in a slack economy and conform with tougher European standards.
Corporate environmentalism is still catching on -- even if Washington can't seem to provide fertilizer for this growing movement.
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