Linking CSR to your supply chain

The World Wildlife Fund (WWF) and the World Resources Institute recently announced that they had brokered an alliance between a dozen large and disparate corporations to push for market changes that will make it easier to buy renewable energy. At first, the connection between giant pandas and giant retailers, tech companies and automakers – not particularly known for their wildlife conservation efforts – eluded me.

As I thought about it, I realized that of course these nonprofits have a vested interest in the environmental advantages of renewable energy, and big companies benefit, CSR-wise, from being seen as doing good deeds with and for nonprofits. So this kind of “sleeping with the enemy” is not a bad idea; in fact, done right, it could be a pretty darned good one.

What matters?

CSR matters. Today most companies understand that. In Shelton Group’s 2014 Eco Pulse study, more than a third of consumers said that a company’s nonprofit partnerships and donations have somewhat to very much impact on their decision to buy its products or services, and a 2013 Nielsen study found that 44% of U.S. consumers said they are willing to spend more for goods and services from companies that give back to society. Both of these numbers are trending upwards.

Climate change matters. By now, everyone should know that. A recent (and distinctly non-partisan) report backed by financial wizards Michael Bloomberg, Henry Paulson and Thomas Steyer drills down into the regional and local effects of the world’s changing weather patterns and the dire effects they could have on our economy. For example, we could be facing precipitous drops in crop yields: “up to a 15% likely average yield loss in the next five to 25 years, and up to a 73% likely average yield loss by the end of the century.”

Your supply chain matters too. Of course it does, and you don’t need surveys and statistics to know the serious financial impact that disruptions to it can have – to say nothing of a link that disappears altogether.

Now put all these considerations into your company’s plan-o-matic, and what comes out? One possibility is to develop partnerships with conservation groups working to mitigate or remediate environmental problems that could have a direct impact on your supply chain.

In the early days, most CSR activities took the form of Big Corporation gives Big Check to Worthy Cause du Jour. Sometimes these donations were strategized to deflect attention from other – perhaps not so savory – activities, and it didn’t take long for people to wise up to that ploy. Of course CSR has evolved significantly since then, but still, even to the not completely cynical, CSR activities can sometimes look like greenwashing.

Establish authenticity and everybody wins

To fully realize the benefits of CSR, your activities must be perceived as authentic. What better way to be authentic than to undertake initiatives that are unashamedly self- as well as cause-serving – initiatives that might work toward the sustainability of your supply chain as well as to the greater good?

A company that relies heavily on water could help make a real difference – and protect an important link in their supply chain – by establishing partnerships and sponsoring efforts to preserve and restore watersheds. For example, WWF has also partnered with The Coca-Cola Company to help conserve the world’s freshwater resources and improve practices across the company’s entire supply chain.

The same potential exists for businesses dependent on agriculture. Haagen-Dazs, for example, works to help preserve honeybees, on which many of its ingredients depend. Since 2008, it has donated more than $1 million to honeybee research, established a microsite to raise awareness of the issue and encouraged its customers to donate directly to the cause.

Just this month, Unilever announced a far-reaching initiative to improve the lives of a million people in its extended supply chains. Partnering with Solidaridad – the international sustainable supply chain nonprofit – they will focus on agricultural and labor practices, land management, and supporting young agricultural entrepreneurs, targeting the sustainable sourcing of key agricultural raw materials in Africa, Latin America and Asia.

Partnerships like these bring wins all around. One goes to your nonprofit partner: it gets much-needed funding for targeted projects. Another goes to the environment: your money goes toward the solution of an important environmental problem. Two more go right to you, the corporate partner: the environmental solution helps protect your supply chain and your company reaps the benefits of the best CSR initiatives.

There could be bonuses as well: your partnership just might turn what had been a confrontational, adversarial relationship ­with an environmental group – a relationship that generates media attention of the wrong kind – into a proactive, cooperative one, and through its oversight of your efforts, the nonprofit lends additional authenticity to your sustainability claims.