Green supply chain creates shareholder value, research finds

Filed in archive Research on October 1, 2008

According to a new report from Diamond Management & Technology Consultants, companies that take a holistic view of their supply chains and incorporate environmentally-friendly principles at key points along the way will create opportunities to increase shareholder value.

"Becoming Green is no longer an end in and of itself, but the byproduct of optimizing a supply chain," said Mark Baum, a partner at Diamond who leads the firm's Consumer Packaged Goods practice. "At the same time, transitioning to a Green Supply Chain while also maximizing efficiency is not a clear-cut process."

The report, entitled "The Case for a 'Green' Supply Chain: Turning Mandate into Opportunity," provides a set of recommendations for a Green Supply Chain framework. A company should continually evaluate and prioritize green investments in the supply chain based on their returns -in both financial and non-financial terms according to the report. "When prioritizing potential opportunities, it is important for companies to keep in mind that not every initiative will have a positive return on investment," said Baum. "Therefore, it is essential to think about all green initiatives together as a balanced portfolio, with some initiatives being done on an investment basis."



A Green Supply Chain requires strong sponsorship from key executives and stakeholders and a robust business case that highlights a prioritized list of targeted opportunities, according to the report. Diamond's report notes that the business case should include specific metrics-not only for measuring success, but also to continuously look for opportunities to improve.

Source: Industry Week