HOW CAN A COMPANY GREEN ITS SUPPLY CHAIN?

Supply chains are the backbone of any economy.

Small and medium enterprises (SMEs), which form most of the supply chain for large companies, comprise over 90% of enterprises and account for 50-60% of employment at a national level.

By working with its supply chain to improve the quality of goods and services, a proactive multinational company can improve its own productivity, and help small suppliers to grow and create new jobs.

But can a company improve the environmental impact of its supply chain at the same time?

Many SMEs face immense pressures just to survive - and many simply lack the time and the expertise improve their environmental management.

But our experience is that there are great benefits for a large firm that is able to improve the eco-efficiency of its supply chain - it helps meet its corporate responsibility objectives, leads to increased efficiency, and can improve its local reputation and productivity.

Unilever, for example, has a Business Partner Code, which outlines its expectations of suppliers on the environment as well as health and safety at work, business integrity, labour standards and consumer safety.

Unilever has sought evidence from its suppliers that they adhere to established social, environmental and labour standards such as ISO 14001 and SA 8000.

Helping SMEs in a hotel supply chain

This challenge of improving the environmental impact of the supply chain is particularly important in the hotel sector, where an average luxury hotel may work with as many as 150-300 small or medium sized suppliers.

Through our International Tourism Partnership programme, we are working with both hotel companies and suppliers to demonstrate how the supply chain can be greened.

We have started training individual suppliers of major hotels in the UK, to show them how to improve their environmental management and make them understand that hotels will support them in their efforts. The training has been funded by the UK government and is being run in partnership with White Young Green, an environmental consultancy.

“We are working with procurement managers at individual hotel companies to encourage hotel suppliers to adopt a formal environmental management system BS8555. Delegates from six companies - from furniture manufacturers and toiletry suppliers to lighting suppliers - within the hotel suppliers sector have attended the first three workshops to date.”
Daniela Meilmann, Environmental Manager, IBLF

Other hotels are already working with these suppliers to improve the sustainability of their supply chain. At the Sheraton Wakiki hotel in Hawaii, for example, the purchasing department identifies and mentors new suppliers, in order to generate opportunities to support local businesses.

How large is a hotel company's supply chain?

“The supplier contracts can be divided into three levels: local contracts, regional contracts and corporate contracts,” says Yasmine Schindler, from the purchasing services department at Rezidor. A hotel will use its local suppliers, but also has relationships with suppliers at a regional, and even global level.

“A major chain such as Rezidor, therefore, could work with an estimated 30,000 suppliers (SMEs) across its entire portfolio of hotels worldwide,” she says.

More on IBLF's work in the tourism sector at www.tourismpartnership.org