Years ago I ordered a dish of Norweigan wild salmon from the menu of a swish Restaurant in London. The plate arrived and my friend, a keen angler, examined the fish and called for the waiter. “Has this salmon ever seen an open river?” He asked. “If it had, it would have twisted and turned and the bones would not be so close together. Give us the price for the bottom-of-the-pool cousin!”
My angling friend was absolutely right. The Restaurant was using notions of a wild habitat to increase perceptions of value and, to up the price when, in fact, the fish had been farmed in no more than the calm waters of a mass production tank near Swindon. CSR or Corporate Social Responsibility may well be suffering from the same fate as it has become the latest Corporate fad to convey notions of being in tune with the social and environmental issues as a way to protect – and sometimes grow – bottom line margin.
How can we ensure that CSR means more than the blurb in a glitzy Annual Report?
Ever since John Elkington coined the term Triple Bottom Line in 1994 and, more recently with Andrew Savitz’s Triple Bottom Line Book (2006) the idea of there being more to a business than a financial perspective has gathered momentum and then, the Global Recession exploded on the scene to fuel the debate.
The Triple Bottom Line champions the need for companies to balance their interests in three key areas: People, Planet and Profit. For example,
To many, these are the key drivers of CSR, Corporate Social Responsibility and, there are a number of initiatives designed to ensure that these key drivers are monitored, improved upon and do not become a subjective excercise in generating statistics that are rooted in meaningless comparisons. In particular, companies acting in isolation on CSR have a limited impact. Worse. As Zohare Ali Shariff of TBL (Triple Bottom Line) puts it: ” CSR has today become a narcotic with a lot of companies calling all sorts of activities CSR”.
At a TBL Conference in Karachi in April 2009, 16 multinationals debated the best way to move the CSR agenda forward. C3 or, Cross Company CSR, is that future direction.If we are to be serious about CSR, there needs to be some concrete evidence that profits can be moved back upstream from where products are marketed and sold to the producer and their source of raw materials or, that Corporates do more than move footloose about the globe sourcing ever cheaper suppliers in a ruthless race to the bottom price.
As with logistics, C3 explores cross cutting issues and initiatives that are common to more than one company. As Professor Martin Christopher has said, supply chains, not companies compete and this insight highlights the need for CSR to embrace C3 as a means to reach back along their supply chain or sourcing partnerships to focus not just the ways to move things to the consumer better, cheaper and faster but to ensure that when they do it is done in ways that comply with acceptable – and consistent – CSR standards.
C3 is all about how companies collaborate, working in partnership from source to shelf respecting people, planet and profitability. Transformational Logistics sees this as an ideal opportunity to review end-to-end processes in a systematic way beyond the scope of a single actor in the chain. There is a need to understand the supply chain from raw materials right through to waste. For example,
- Do we understand the process flow from end-to-end?
- Are we aware of the work place standards and environmental impacts of each of our suppliers? We need to pay particular attention when our supply chains stretch back through more than one tier.
And then, instead of a knee jerk reaction to any discovered abuse – can we play a role in educating our partners and enabling them to reach the required standards. Recently, the British Public were outraged to find child labour being one of the reasons companies like Primart could sell fashion items at such low prices. Closing down a factory full of children may satisfy our conscience but do we understand the context and what can we do to change it – without a community losing its source of income. This is a complex issue demanding a more sophisticated response that no single company can provide but many companies can do more about.
Supply Chain ethics is a major issue that needs to embrace a wider context – purchasing, transportation, manufacturing, assembly, storage and product disposal. We need to understand the impacts where pollution is generated, raw materials such as old trees are depleted to extinction and energy resources are mis-used or wasted and, how workers health and safety are impacted. And then, in places like Nigeria, where funds from energy are generated in huge quantities – what is being done to retain profits to address poverty, education and gender issues.
The ethical supply chain opens up the debate to all sorts of perspectives from contemporary slavery to green supply chain. However, before readers draw the conclusion that this is only about regulation a word of caution. Over the past 10 years there has been a steady increase in consumer awareness of ethical issues and, with the recent hysteria over bonus culture and greed, this is likely to grow. As M&S made plain in its campaign – Look Behind the Label. Procurement and sourcing is no longer solely about the cheapest price. It is about supply chain risk and security, carbon usage, ethical trading issues and impact on the environment.
The way products are sourced, made, distributed and disposed of is now a central part of the brand and, an ethical supply chain can be the defining characteristic of your Corporate identity. It can even create access to new markets, enhance customer satisfaction generating inclusive and sustainable growth. C3 and logistics can transform the bottom line. The triple bottom line.