By Li Zhu and Rose Niu
Many companies have long been persuaded that implementing a sustainability agenda is the right thing to do. But persuading shareholders and other stakeholders that sustainability is smart business—particularly when sometimes the sustainable option costs more—has been tougher. Globally, political leaders and corporate actors are beginning to rally around an array of sustainability agendas, from combatting climate change to zero-deforestation of supply chains. While the ambitions manifested through these agendas are commendable, actual progress overall has been, at best, slow. Many companies that are treading water still need an extra dose of persuasion, compelling yet actionable.
A recent report from WWF provides additional insight and evidence for such persuasion. The report, named Responsible Sourcing of Forest Products: The Business Case for Retailers, articulates the business case for retailers to commit to and act on responsible sourcing of forest products. It shows that retailers see a clear link between responsible sourcing and business opportunities. The findings from its survey of 54 retailers from 21 sectors and 20 countries reveal what companies stand to gain from sustainable forest product sourcing. For example, more than 80 percent of the companies surveyed reported positive impacts on risk management and brand reputation, over 70 percent saw positive impacts on employee satisfaction, and over 60 per cent reported positive impacts on customer satisfaction and stakeholder engagement. The survey also observes that public commitment to responsible sourcing brings greater benefits than internal commitment alone.
These findings reaffirm many of the key conclusions from an earlier whitepaper developed by the Paulson Institute’s CEO Council for Sustainable Urbanization. The whitepaper—Working Towards Sustainable Forest Product Sourcing: Capturing the Value of Sustainable Supply Chain—was the first step toward building on the shared interests in sustainable forest product sourcing among the CEO Council companies and leveraging their market influence to spread best practices. In addition to outlining the evolving regulatory landscape and market conditions for forest products, the CEO Council whitepaper distilled value propositions from four in-depth case studies, and delineated a roadmap for companies to transition to sustainable forest product sourcing. Case studies of Apple, Vanke, and Walmart converge on a host of common best practices that are transferrable and replicable. They include strengthening senior leadership commitment and internal consensus, setting clear goals and performance indicators, enhancing transparency and traceability, and making efforts to bring along suppliers and engage broader stakeholders.
Given a growing global population, dwindling natural resources, and the need to address climate change, sustainability is the defining challenge facing humanity in the 21st century. For corporate actors who funnel and process natural resources on a global scale, sustainability should no longer be a bolted-on accessory to their business, but rather an underlying principle that informs and shapes every aspect of their business operations. Just as the WWF report observed, responsible sourcing is not a one-off project, but a process of continuous improvement toward environmental and social sustainability of a company’s core business practice. We couldn’t agree more. And there is no better time to start than today.