Earlier in the month, I had the chance to sit down with Aravo's Tim Albinson to talk sustainability. Tim recently took his company in an entirely new direction, announcing a series of new capabilities that tackle a range of sustainable procurement issues. When I caught up with Tim, I was curious to learn who is leading the charge for these efforts inside companies when it comes to looking at the supply-side of sustainability. He suggested that it's often a combination of folks, including the VP of procurement/CPO, a VP/Director of sustainability, and the head of corporate citizenship or CSR, as it's often called. This mixture of decision makers does not appear to be slowing down the process to invest in sustainable Spend Management practices -- at least inside more innovative organizations. But where are companies investing first?
Tim sees four individual buckets or investment decisions which are often separate (and each might have different functional owners inside the organization). These include green procurement/sourcing initiatives, supplier code of conducts / factory auditing, toxic / hazard substance compliance and monitoring as well as measuring carbon footprints (which includes energy usage). In Tim's experience, CPOs tend to care first about green sourcing and green procurement and supplier codes of conduct / factory auditing.
When it comes to technology, even the slickest supplier on-boarding, enablement, monitoring and management application tweaked for green issues will only get a procurement organization so far. That's why Aravo is currently pursuing partnerships for the validation and audit of green supplier practices. This in turn will help drive the accuracy of sustainability information that procurement organization keep track of, creating actionable data to allow companies, as Tim puts it, to take a "Darwin approach" to supplier management.
A Darwin approach weans out the leaders from the laggards going beyond just a "check the box" type of sustainable supplier management program, offering frequent reporting to help companies decide which suppliers are worth developing and working with versus those which need to be phased out. In Tim's view, those companies who take a spreadsheet or any other type of "snapshot" approach to supplier sustainability monitoring and management as opposed to an ongoing lifecycle model that provides period over period audits and information will come up short in their overall sustainability efforts.