Accounting for the social and environmental impacts of your suppliers influences how they do business

by Lara Ryan

Organizations taking the lead in CSR are increasingly requiring vendors to demonstrate their sustainable business practices. Such sustainable procurement leadership will do more to change the way we do business than anything we've yet seen in the field.

Many organizations will adapt their practices related to community investment, environmental sustainability, and employee engagement because it's the right thing to do, while others will do it to protect their bottom line.

But make no mistake—we're at a game-changing point. Large "sustainable" purchasers such as TD Bank, VANOC, Walmart, and the Nova Scotia government in our region will influence how the companies down their respective supply chains do business.

When VANOC implemented what was at the time a progressive procurement policy, it had to host a number of vendor training sessions to help businesses understand what was defined as sustainable and what wasn't. The Nova Scotia government has plans for similar vendor training.

As the corporate social responsibility and sustainability fields emerge, the challenge remains to define "sustainable." For example, VANOC put these parameters in place: "The VANOC procurement processes are complemented by sustainability objectives that include ethical sourcing and environmental protection. They also ensure that products and services delivered through the supply chain are manufactured and distributed ethically and with regard for international standards on human and labour rights."

There are different ways to evaluate sustainability, but a review of certifications seems to be a fairly consistent requirement. Some are industry specific, such as the Marine Stewardship Council and the Forest Stewardship Council, but there are other more general ones. Obviously, the most credible offer third-party certification.

The Global Reporting Initiative (GRI) is the industry leader for measuring social and environmental performance. Other indexes and reporting tools include ISO 14000 (environment), ISO 26000 (corporate social responsibility), The London Benchmark Group's measurement of corporate community investment, and the AccountAbility Standard (AA1000).

Each framework provides guidance for organizations to disclose their sustainability performance to stakeholders. These tools facilitate transparency, accountability, and consistency in reporting by organizations of all sizes and sectors around the world. Green tools such as EcoLogo and the Green Business Bureau are also worth exploring. There are organizations and consultants, including Dalhousie University's Eco-Efficiency Centre, that can help develop a sustainability plan.

The consistent element is that they offer measurement and reporting tools. If your organization is implementing an integrated CSR plan, you may be participating in a number of different certifications that verify specific initiatives around community investment or green practices. These are vital if you are planning to issue a report, either stand-alone or as part of an annual report.

So what do you get in return? Sustainable procurement policies can have tremendous economic benefits for local business and lead to change. Smart companies should be proactive and lead the way.

Lara Ryan is a business consultant specializing in CSR. She can be reached at lara@lararyanconsulting.ca.