When Walmart announced last year that it planned to investigate its 100,000-plus suppliers with a Sustainability Index, the idea was hailed as revolutionary, if not a bit overly idealistic. But now IBM is following Walmart's lead by asking its 28,000 suppliers in 60 countries to establish environmental goals and measure energy conservation, greenhouse gas emissions, and waste management/recycling practices. If suppliers want to stay on IBM's radar, they have to report their results and ask subcontractors to do the same thing.
A key aspect of this program is that we want suppliers to create a management system that works for their particular business operations. Since our suppliers are diverse, there cannot be a one-size-fits-all solution. Some are huge publically [sic]-traded companies while others may be small businesses with much fewer employees. We want them all to build long-term sustainability in a way that is integral to their routine operations, not as an add-on fix. As we set these new requirements, let me point out that we are not going to publicly 'grade' suppliers. This is a carrot, not a stick approach. Our goal is to help them improve their businesses, whether they work with IBM or someone else. We want them to succeed.
So environmental management systems will look different for IBM suppliers in different industries. An electronics supplier might begin to phase out toxic chemicals from production, while a call center could install energy-efficient lighting and turn off computers at night.
IBM isn't giving suppliers a deadline for compliance, but the company hopes that changes will be complete by 2011. And if suppliers don't get on board, IBM will eventually take its business elsewhere. They won't be able to hide from sustainability audits for long--now that both Walmart and IBM are on board, it's only a matter of time before other big companies start demanding the same things.