Last week, I spent some time with members of the sustainability team at high-tech giant Dell, which flew me to Austin, Texas, and put me up on their dime to moderate a day-long meeting about their strategy. One thing that struck me during the discussions was the revelation that Dell has managed to get ALL of its components partners and other suppliers to disclose their carbon and greenhouse gas emissions. Of course, those partners don't disclose that information (right now at least) in any kind of standard format, so what exactly Dell will DO with that data remains a challenge.
Along those lines, another high-tech player, wireless telecommunications giant Sprint Nextel, has just published the results of a comprehensive analysis of its supply chain partners. The report, assembled by Trucost, reveals just how complex keeping track of a company's environmental impact can really be. It also exposes how just a couple of relationships can throw a company's emissions out of whack. Consider that just five of Sprint's top suppliers contribute 58 percent of the total carbon footprint of its supply chain.
Sprint's work in this area is illustrative (in my mind) for two reasons. First, because it has been at the forefront of corporate sustainability work among the wireless carriers (it actually has certified three mobile phones along with key suppliers that could be considered "greener" than average). And second, because mobility is an increasingly louder theme among the high-tech industry and, indeed, within the world of business more broadly.
In any event, Trucost's report shows that Sprint's supplier emissions in 2009 were around 2 million metric tons, which was slightly higher than Sprint's own emissions that year. Its top 50 suppliers account for more than 94 percent of that amount. The report notes:
"Carbon emissions are increasingly resulting in financial costs for companies and by undertaking a carbon assessment of its supply chain, Sprint Nextel is in a position to cut costs by minimizing the risk of pass-through from carbon-intensive suppliers."
Trucost calculates the carbon-intensity of Sprint's suppliers at 154 tons of carbon dioxide emissions per million dollars of expenditures. From an industry perspective, that means the intensity of Sprint's supply chain is slightly higher than those of a television broadcaster or a hospital, according to the report.
What does all this mean? Well, even though there aren't many companies that have gotten quite as sophisticated as Sprint in collecting data about their supply chain (there ARE other tech companies doing this, but much of this is voluntary right, this is one of those things that probably won't be as optional in the future. Because even if there is nothing punitive in place requiring big companies to disclose the impact of their supply chains, this is one of those things that they can use to help assess suppliers.
So, those of you who work within smaller companies who have been sticking your head in the sand with respect to carbon emissions data collection, that might not be a viable strategy in the future. The good news is that if you're a good supply chain partner, you'll probably have some leverage and should be able to get some help from your upstream partner. Doesn't now seems like a good time to get proactive about this?