Thoughts from the Field

As the field of sustainability becomes more sophisticated, there has been a shift in awareness from looking at a company’s immediate environmental footprint, to investigating the often much wider impacts of its global supply chain.

This is particularly true for the world of electronics. Electronic products are now ubiquitous in modern life and business. However, understanding the wider environmental and other sustainability-relevant impacts that electronics have is not so simple. Individual electronics products can contain hundreds of parts, with many of these parts manufactured in developing countries. The supply chains for these products can stretch across tens, hundreds, or even thousands of vendors, presenting numerous risks to the end manufacturer whose name is featured prominently on the label that is seen by the consumer. If any one of these vendors violates laws or operates in a way that is perceived as deleterious to society or the environment, then the reputation of the whole network of suppliers and customers is at risk.

Exploring the web of the electronics supply chain reveals examples of these practices that deeply challenge the pursuit of sustainability:

• Workers subject to unfair labor practices,
• Uncontrolled environmental exposures that endanger people, communities or ecosystems,
• Sourcing of raw materials from regions of the world embroiled in conflict,

How can companies get a handle on these risks? What proactive steps can they take to assess the security and sustainability of their supply chains? This is where external frameworks such as that of the Global Reporting Initiative (GRI), or the Electronic Industry Citizenship Coalition (EICC) are particularly useful. The EICC is a membership-based organization that promotes a common code of conduct aimed at improving working and environmental standards across the industry. It sets standards in:

• Labor,
• Health & Safety,
• Environment, Management Systems, and
• Ethics,

It also encourages its members to actively enlist each of their supply chains in the EICC framework as well. Member companies are subject to rigorous audits to ensure compliance with its strict guidelines, and members then work their own vendors to help them adopt the same standards. Some of the world’s leading electronics, communications, and other technology-focused corporations have joined the EICC and have used this framework to begin making strides toward improving their sustainable performance.

The framework of the EICC and that of the Global Reporting Initiative are highly complementary. The EICC is focused on raising sustainable production standards in the electronic industry, while GRI increases the level of transparency in sustainability reporting across all industries. By finding the synergies between EICC and GRI, companies in this sector can efficiently address risk while positioning themselves at the forefront of sustainable corporate practice.

Whoever is tired of the endless surveys, requests for data, questionnaires and other inquiries regarding sustainability related information please raise your hand.

Corporations (and their sustainability managers) are increasingly being asked by a wide variety of stakeholders, including customers, trade associations, the media, academic institutions, NGO’s and others about how they are addressing the topic of sustainability, their performance data, and their goals for the future. While the intentions behind such inquiries are noble, each request has its own specific nuances requiring individual attention (and time!) to complete.

A well planned, integrated sustainability report can be an efficient means of answering these questions. Indeed, what is a sustainability report? It is a document that provides information about what is most relevant (or “material”) to the organization and it stakeholders. While stakeholders are typically thought of as the shareholders, customers, employees and communities where the business is located, stakeholders are also those groups that have an interest in what the business is doing. The needs of these stakeholders should be considered in the report planning process.

The framework of the Global Reporting Initiative is a great place to start. Designed using a participatory process and updated regularly, it is geared towards covering what most stakeholders want to know from a corporation on its environmental and social performance and is commonly seen as the gold standard for corporate sustainability reporting. However, despite this, it does not cover all of the topics that some would consider part of the sustainability landscape. But there are ways to handle these gaps.

The first step is to perform a “Materiality Assessment”. This is a formal process whereby key individuals within the reporting company, as well as key external stakeholders are asked to assess the relevance of different topics as viewed from the perspective of various stakeholder groups. Through this activity, a set of topics is identified that are most relevant to the company and its own definition of sustainability and thus should be addressed in its sustainability report.

As part of this “Materiality Assessment”, we have found it to be very effective to also ask our clients about which surveys, questionnaires, and data requests they have received in the previous year. This list could include requests from commonly known sustainability data-gathering organizations (such as the Carbon Disclosure Project, TruCost, UN Global Compact, customers (for example, WalMart’s now famous questionnaire), or academic/NGO researchers. In our work, we have heard it is not uncommon for corporate sustainability managers to get several such requests per month. But each request takes time to complete, distracting the sustainability manager from his or her daily duties.

Upon closer examination, one will notice that many of these requests for information have common threads throughout them. Many ask for greenhouse gas data and goals, or human resources related data, or policies regarding supply chains. By examining the different requests, and importantly, cross referencing between them, a master list of commonly asked questions or referenced data can be generated. If these commonly asked questions are then included in a company’s sustainability report, then many of these requests can be fulfilled simply by sending the requestor a copy of the report.

This process will not anticipate ALL questions that a company may receive. However, the process outlined here will anticipate those questions that are most relevant to the most important internal and external stakeholders. With this “80/20” approach, the sustainability report prepared through the process described here will address almost all of the questions, and will still provide the sustainability community with much of the information it needs to advance the global knowledge pool farther along.