“We don’t have five planets, and every day resources are diminishing.” —John Paterson, chief procurement officer, IBM Global Supply
Global Supply Social and Environmental Management System
Management system helps IBM make positive impact
on the environment through its 28,000 suppliers
Concerned about dwindling resources and rising raw-materials costs, John Paterson, vice president and chief procurement officer for IBM’s Global Supply organization, classifies sustainability as a business imperative.
Citing a recent study that predicts the world will need the resources of five planets if emerging markets continue to grow at their current rate, Paterson says, “For me, it’s clear that there are financial benefits to be had for procurement organizations across the world to get innovative with suppliers. Over the long term, the only thing that’s going to happen to the oil price is that it’s going to go up. We’ve seen huge increases in raw-materials prices, and we have issues with water and food. We don’t have five planets, and every day resources are diminishing.”
To build a supply chain that embraces environmental best practices, IBM in early 2010 created what it calls a Global Supply Social and Environmental Management System, a unified approach that the company and its suppliers use to track, report, and communicate their supply chain-related environmental programs. The management system lays out how IBM’s 28,000 first-tier suppliers in 90 countries are required to:
- Define, deploy, and sustain a management system that addresses corporate responsibility, including supplier conduct and environmental protection
- Measure performance and establish voluntary, quantifiable environmental goals
- Publicly disclose results associated with these voluntary environmental goals and other environmental aspects of their management systems
The system also requires IBM’s first-tier suppliers to establish similar social and environmental management systems and processes with their suppliers.
As a result of the program, IBM expects suppliers to achieve resource optimization and cost reduction, and become accountable and socially responsible for their operations.
The management system requirement also has elevated the understanding of environmental stewardship across the supply chain and brought new business to IBM. “Our clients trust us to help them develop more sustainable business practices, because we have worked to minimize our own environmental impact,” Paterson says.
“In setting this standard for suppliers,” Paterson concludes, “IBM is demonstrating visible supply chain leadership and use of its size and influence to have a positive impact on environmental initiatives.”