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How Industry Group Collaboration Drives Sustainability Improvement

by | Jun 4, 2021 | Blog, Industry Trends

Traditionally, companies have fought for the highest market share, top ratings, and product innovation dominance without much regard for the social or environmental consequences. In many cases, this remains true today.

However, as environmental scientists, NGOs and the United Nations continue to deliver warnings regarding the degradation of the planet, companies are starting to come together under the banner of sustainability. Differences, they’ve found, matter less than preserving the lives and resources that keep our society running.

To improve their ability to grapple with issues like climate change, deforestation, plastic pollution and human rights abuses, industry-leading companies are now collaborating to form corporate responsibility coalitions, aligning their focus on ESG, GHG reductions, and supply chain scrutiny.

The Collaborative Corporates

When you unite the bright minds of academia, civil society, the private sector, and governments with a common goal, diverse perspectives spark innovation. To address seemingly intractable ESG issues, collaboration is our best chance.

After all, well-orchestrated collaboration can address systemic challenges in remarkable ways. Through collaborative efforts, companies can target and synthesize connections between the myriad of problems the globe currently faces and those they seek to solve. If the world intends to continue to improve quality of life for all, we must shift to systems that maximize positive outcomes for our environment, society, and the economy. As can be seen in rapidly developing nations around the world, even the best intentions may lead to a host of unintended consequences, and we must be prepared to mitigate the side effects as a collective as well.

To achieve this, we need to stay in sync with competitors and allies alike, embrace the challenges of responsible business, and approach them as a unit equally responsible for setting and meeting bold commitments. Shared information and action can help us step into an era where sustainable business is synonymous with business as usual.

Collaboration to Accelerate

When companies join forces with their peers, we see exponential progress. Consider how Unilever, Greenpeace, and UNEP worked together to speed along refrigeration technology. By collaborating to develop innovative, HFC-free refrigeration technologies, these companies helped mitigate HFC’s contribution to global warming and ozone depletion.

In many cases, working together benefits the individual aims of corporate stakeholders—increasing profits, broadening geographic scope, and elevating industry reputation—along with those of millions of global citizens.

In the sphere of corporate sustainability, we’ve seen this mindset in operation for quite some time. NGOs partner with local organizations, government departments lead societal initiatives, and international bodies such as the United Nations invest resources into countries worldwide. COVID-19 is only accelerating this trend, making it not only practical but necessary to share up-to-date shipping, medical, and crisis information between countries.

Some protest that companies are competitors in the market and therefore cannot collaborate for mutual benefit. Yet even competitors can join together in a common cause. Amazon, Facebook, Ford, and hundreds more have joined the Science Based Targets initiative (SBTi) to attempt to reduce their GHG emissions—despite overlapping areas of expertise and competing product portfolios.

To use one of our partners as an example, take The Sustainability Consortium (TSC), a 100+ member global community that lists Amazon, HSBC Bank, Unilever, Pepsico, and the World Wildlife Fund among its many members. By supplying leadership, innovation, and engagement opportunities along with their proprietary product sustainability assessments and support services, they are catalyzing a more sustainable, cooperative consumer goods industry one step at a time.

In 2020, over 1,700 manufacturers (worth close to $1 trillion of consumer products sales) used TSC’s THESIS (The Sustainability Insight System), a platform for retailers and brands to communicate sustainability performance information. Compared to the 2016 baseline, THESIS scores of participating suppliers improved 38%. These quantifiable and actionable improvements were powered by collaboration and transparency.

When businesses collaborate, change accelerates.

How Collaboration Helps in Practice

Collaboration also yields tangible, time-saving results. According to the World Economic Forum, responsible procurement can raise revenue by 5-20%, reduce supply chain costs by 9-16%, and increase brand value by 15-30%. Overall, industry group collaboration makes supply chain sustainability easier through:

  • Shared resources and goals: Industry groups pool together helpful resources, including best practice guides, supplier assessments, audit checklists, and more. They also establish goals that are material for the industry they are involved in. This gives the companies involved assurance that they are engaged in the type of sustainability activity that makes a difference and gives them the tools they need to drive progress.
  • Standardized measurement frameworks: Along with shared resources and goals comes standardization. Companies involved in these industry groups all measure the same information from suppliers and march toward the same outcomes. This increases efficiency, reduces duplication of effort, and improves alignment across the entire industry. Learn more about the benefits of standardization here.
  • Peer learning and information transparency: Industry groups will often share supplier performance data throughout the entire collective. This helps each company understand the state of the supplier base – leaders and laggards, where gaps exist, etc.
  • Joint supplier remediation: As issues and improvement opportunities surface for suppliers, companies can approach them as a group and better support suppliers to implement the necessary changes. In doing this, companies can share any costs incurred from financing supplier initiatives, and of course they all benefit from improving the performance of shared suppliers.

One trailblazer in this regard is the Pharmaceutical Supply Chain Initiative (PSCI), a collection of pharmaceutical industry leaders working to improve supply chain performance and sustainability.

According to Rikke Christensen, Head of Sustainable Procurement at LEO Pharma, the PSCI Audit Sharing Program also reduced the time member companies formerly spent on creating and duplicating their assessments. When PSCI consolidated audit measurements, companies reinvested that time and energy into more critical projects. From supplier summits, mutual recognition of shared audit frameworks, and clear guidance kits, PSCI is a great example of an industry group applying these principles to streamline supply chain improvement for their industry.

Looking Forward

From the first year of this new decade, it’s clear that businesses face many challenges in the path ahead to sustainability. Industry group participation is just one of the tools businesses can leverage to make those challenges more manageable.

As sustainability initiatives and goals sweep the globe, it’s smart to align your business with international expectations and standards. By setting a high standard and sense of social responsibility, your company can build a forward-thinking reputation and attract both consumers and employees who share your desire to revolutionize supply chain responsibility and sustain our planet.

SupplyShift is proud to be working with a variety of industry initiatives, NGOs, and consultants to streamline pre-competitive collaboration and shared improvement.

If you need some collaborative assistance to get your company’s plans in place, we welcome you to contact us for a consultation. We have resources that can help you tackle climate change impact, modern slavery, deforestation and more across your global supply chain: all problems in need of diverse, holistic solutions.

Jamie Barsimantov

Jamie Barsimantov

Chief Strategy Officer, SupplyShift
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