Supply chain and logistics managers begin thinking green

Survey shows companies are developing corporate sustainability plans, but they expect a return on their environmentally friendly investments

Sean A. Murphy -- Logistics Management, 6/4/2008

More corporate leaders are doing something about environmental concerns, but they aren’t taking their eyes off the bottom line, according to the results of an online study on “The Green Supply Chain,” conducted by Supply Chain Management Review and Logistics Management magazines.

The study also found concerns about waste and recycling are more important than greenhouse gas emissions and resource consumption.

The Supply Chain Management Review and Logistics Management research divisions conducted the survey, sponsored by Manhattan Associates, IBM, and CSC Consulting, “to better understand supply chain strategic green initiatives among logistics and supply chain professionals,” according to a report announcing the study’s findings.

The study discussed topics such as the most important environmental issues, specific supply chain green actions currently in place and planned for the future in manufacturing, warehousing, and/or distribution, ROI on green initiative investment, and level of collaboration.

In all, 250 readers of both magazines from a variety of industries chose to participate in the study. Most of the respondents, according to the study’s report, work in supply chain management and/or in logistics and transportation. Nearly half of the respondents are based in a corporate headquarters.

According to the survey, more than 50 percent of the respondents said they have a documented corporate sustainability plan, and about the same number said their company has a senior executive, often a vice president, dedicated to sustainability.

John Davies, vice president of green technology research at AMR Research, called those findings “encouraging,” since green technology is still new enough that a lot of companies are just starting to get involved in it.

As to what companies are looking to do about the environment, nearly two-thirds of the respondents said waste disposal and recycling were the most important environmental issues to address, beating out conserving natural resources, greenhouse gas emissions, and “green” consumer buying preferences.

Davies said companies are recognizing the value in having less to clean up.

“The more you reduce waste, the more you reduce cost,” he said.

Respondents indicated their companies are seeking better public relations and customer satisfaction through greener initiatives, but cost savings are still most important. Nearly two-thirds of respondents cited cost justification as the top barrier to sustainability initiatives in their companies.

In addition, 60 percent of respondents whose companies are implementing sustainability initiatives said the companies also have a method of measuring return on investment for each of those initiatives.

Davies was not surprised by these numbers. “Very few initiatives get funded because they are green,” he said. “They get funded because there is a return on investment.”