Digging Into IBM’s Multitier CSR Program Requirements

Earlier in the week, I covered the latest supply chain CSR program news from IBM. In short, IBM has opted to pursue an initiative that mirrors the program structure already implemented by organizations in the supplier diversity issue, pushing management and measurement issues down to suppliers to oversee. I highly suspect this program and other early ones like it will become the supply chain reporting CSR standard for many others in the near future. If you're thinking about creating such a program in your own organization, spend a few minutes reading and committing to memory the key program elements outlined on IBM's website in a downloadable PDF. The scope of the program covers areas such as energy conversion, waste management and recycling, greenhouse gas emissions and other CSR metrics IBM itself is concerned with.

The program goes beyond playing green lip service from a supply chain vantage point by mandating that suppliers "not only set voluntary environmental goals to achieve positive results" but also that tier one supply chain partners "publicly disclose results associated with these voluntary environmental goals and other environmental aspects from the management system, including any regulatory fines or penalties that may have occurred." Moreover, suppliers themselves must take a multi-tier approach to their own CSR programs by cascading IBM's CSR requirements "to the supplier's suppliers who perform work that is material to the products, parts and/or services being supplied to IBM." In other words, IBM wants to go down two, three or potentially even more tiers (where applicable) into their supply chain to gain true CSR visibility. And they plan to force their suppliers to be the ones doing the majority of the homework to help IBM meet its objectives.

As I mentioned in the above-linked previous post on the subject, I believe that this move could be the catalyst that causes widespread adoption of supplier management systems from companies like AECSoft, Aravo, Ariba, CVM Solutions, Emptoris, Hiperos, Oracle, SAP and SupplierForce. But whether IBM's move -- or moves by other organizations that are sure to follow -- ends up being nothing more than a short-term green compliance boondoggle or a sustainable transformation within supplier and supply chain management remains to be seen. I suspect if it's the latter, we'll see companies at the OEM and tier one level across industries become more concerned with tracking supply risk and supplier performance metrics as well across all of their suppliers -- rather than just a select few.

- Jason Busch

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