Photo via Patrick H~ via Flickr CC
We're seeing it more and more with big companies - they're telling their suppliers to start tracking their footprints. It's part of a must-have business strategy for companies facing an economy that more and more revolves around carbon footprints. If a company can't see the footprints of its suppliers, it can't accurately measure its own footprint. That's why well over a year ago, HP started releasing its supply chain emissions information. And it's why IBM is now telling its suppliers to implement tracking software and policies, to set goals for reduction, and to make their progress public knowledge. According to the New York Times, IBM will require its 28,000 suppliers worldwide to install management systems for tracking energy use, GHGs, waste and recycling. Not just that, but the suppliers have to request their subcontractors to do the same. Along with tracking, the suppliers have been told they have to set environmental goals and make their progress in meeting those goals public knowledge.
It's no surprise, considering how adamant IBM is about transitioning to a "Smarter Planet." And thank goodness. While we hear a lot about single companies working towards a smaller footprint, we don't often enough hear about companies requiring those in their supply chain to do the same.
"We will be amongst the first, if not the first, with these broad-based markers on our supply base and we're going to have to spend an appropriate amount of time and money to help our suppliers do what we're asking them to do," John Paterson, vice president for I.B.M.'s global supply and chief procurement officer, said in a telephone interview from Hong Kong.
That's a fairly broad statement from IBM. And in terms of being the first - well, maybe the first to do so in their particular format, but not the first, period.
Possibly the most famous example of tracking supply chains is Wal-Mart, which has set up a scorecard for suppliers - those who aren't up to snuff don't make it onto store shelves. It's just this kind of traceability that is so important to businesses hoping to green their supply chains, and that's why businesses looking to provide the software and services for tracking are in a great position right now. While IBM can create its own software, other companies like PlanetMetrics can start making connections with businesses who need a way to watch their supply chain.
They're starting with baby steps - first requiring the tracking of data, and later will come numerical goals for reduction. And there is also no date set yet, though the company is expecting most suppliers to be in compliance within a year. But no dates, and no numbers, means this could simply be a lot of lip service and not much action.
However, the company is aware that the longer it waits to get cracking, the more expensive it will be in the long run:
"It's clear that there's real financial benefits to be had for procurers across the world to get innovative with their suppliers," Mr. Paterson added. "In the long term, as the Earth's resources get consumed, prices are going to go up. We've already seen large price increases and problems with water."
Follow Jaymi on Twitter
More on Supply Chain Emissions
UK Companies Step Up to Support Transparency on Carbon Emissions
AMEE and EQ2 Partner for Better Emissions Reporting Transparency
Supply Chain Emissions Software a Silver Bullet or Slippery Slope?