Social and

Environmental
Sustainability
WE ALL NEED TO PLAY A ROLE
I am I plus my surroundings and if I do not preserve
the latter, I do not preserve myself.
(Jose Gasset 1914)
Introduction
Good corporate citizens are incorporating sustainability
into supplier certification and audit programs ensuring
suppliers are able and willing to use sustainable practices (Vachon; 2007).
1. Certification and auditing of suppliers helps to reduce the risk associated with
having extended global supply chains as cooperation within supply chains
transition from long distance acquaintance style relationships to more formal
partnerships and joint ventures between organizations (Man, Burns; 2006).
2. Unsound activities within an organizations supply chain can adversely affect its
reputation. Certification and audit programs help monitor the performance of
suppliers and hold them accountable for their actions.
3. Traditionally, sustainability considerations were limited to compliance with
regulations (Dou, Sarkis). This is changing as organizations become more
cognizant of the 3Ps and is gaining more attention through performance and
practices. (Dou, Sarkis; 2010)
Research is showing organizations are placing a higher degree of weighting
on sustainability when selecting and qualifying suppliers.
Introduction
People ensuring safe working environments
and health and safety standards are in place
and being followed.
Planet minimizing the impact on the planet
through reducing energy and materials used
in the production of products and diverting
products from waste upon the end of its life.
Profit balancing People and Planet with incremental
costs or leveraging to reduce operating costs through greater efficiencies.
The 3Ps are People, Planet, Profit under which organizations are developing a balanced
approach in their sourcing and supply chain decision making criteria.
Two Pillars of Sustainability
Planet
Reducing environmental footprint
through:
Reduced energy and material
consumption,
Reduced waste
going to
landfill sites,
Waste is being
properly
disposed of,
Mitigation plans are in place to deal
with accidents and spills.
Suppliers are being audited against
People
Ensuring healthy and safe working
environments for all people within an
organizations supply chain.
Health and Safety standards are in
place and being followed.
Workers have
the right to voice
concerns and will
be taken seriously.
Suppliers are being audited and
incentivized to implement and follow
Health and Safety standards or
penalized for violations.
The pillars of sustainability are Planet and People which are balance with Profit
Coca Cola was forced out of India when the Government
legislated that ground water was first the right of the people
and a bottling facility was shut down. Coke was consuming
all the ground water in its production and releasing a bi-
product material into the enviornment which made people
ill. Coke is now back in India but has very small market share
compared to Pepsi.
Companies and countries are talking sustainability but the actions have
yet to catch up.
Two Pillars of Sustainability
Planet
Canada has fallen behind in a global ranking on
international development initiatives and ranks last when it
comes to environmental protection (Globe and Mail, 2013).
Women in India are not safe traveling alone at night.
Many of our off-shore resources work night shifts to
align to North America office hours. How do we
ensure our suppliers look after their safety while on
route to and from work?
We routinely hear of violations against people and planet in foreign countries.
Many of those violations happen from companies serving the needs and
competing for business from western companies.
Two Pillars of Sustainability
People
Bangladesh garment factory. This could easily be an IT call
centre or any building for any purpose. It is about ensuring
building codes are followed.
Environmental infractions are not restricted to operations in emerging markets.
Companies here in North America also make environmental infractions even
with our strict laws and the environmental protection act.
Two Pillars of Sustainability
Planet
Snoc Inc., a company specializing in light fixture
manufacturing in Saint-Hyacinthe, Quebec, used or
consented to the use of trichloroethylene (TCE) in
quantities exceeding the permitted quantity. TCE is a toxic
substance listed in Schedule 1 of the Solvent Degreasing
Regulations and its use is regulated under CEPA, 1999
(Electrical Line Magazine, September 2013).
Albertas Provincial Court penalized Suncor Energy and
its camp operator, Compass Group Canada Ltd., a
combined $400,000 for failing to properly supervise its
camp operator Compass Group. Compass Group was
fined for failing to report violations by R&D McCabe, a
sub-contractor hired by Compass Group to manage the
facility (Government of Alberta, April 2009).
Almost three-quarters of employers of temporary foreign
workers inspected by the province of Alberta in the past year
violated employment standards. Government officials found
74 per cent of employers that were inspected had violated
the province's labour code. Half of all violations were for
failing to pay workers properly for overtime, vacations and
statutory holidays (CBC 2010).
Human rights infractions are not restricted to operations in emerging markets.
Companies here in North America also make human rights infractions even
with our Charter of Human Rights and Employment Standards Act
Two Pillars of Sustainability
People
The Ontario Court of Justice has sentenced a director of six
Ontario companies, to 90 days in jail for violations of the
Employment Standards Act after failing to pay employees.
Between March 2007 and October 2009, 61 employees from six
companies filed claims with the Ministry of Labour for unpaid
wages. An investigation by the ministry found that wages were
owed to all 61 employees (Ontario Ministry of Labour, 2012).
Conclusion
Companies have a duty to consider the employees of their suppliers with the
same regard and consideration as their own employees.
Although views on environmental impact caused by humans varies, it is obvious
the increased human population and industrialization will have some degree of
impact. Therefore companies are realizing the need to factor environmental
considerations into their operations.
The operations of manufacturing companies has a direct correlation to energy
consumption, waste and employment standards in suppliers. It is difficult to
measure for financial companies but every company operations effects the
operations of secondary, tertiary, quaternary and so on along a companys
supply chain.
Therefore it is imperative companies insist and ensure
on the correct behaviours within their supply chains.
Globalization has brought greater economic prosperity with global transformation.
We need to ensure this prosperity is not at the detriment of people and planet.
APPENDIX
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