1.29.2010

Will Environmental Sustainability Drive Social Sustainability?

Although environmental sustainability has entered many strategic corporate business plans -- due to either the pressures to comply with stringent legislation or to satisfy the demands of the growing numbers of ecologically minded consumers and investors -- one must wonder if social sustainability will be part of the package. It appears that corporations are finally publicly recognizing their failings in this area. This article commenting on Nike’s recently published fiscal 2007 to 2009 Corporate Responsibility report raised some interesting points.

Many of Nike’s environmental goals seem decidedly lean, such as “to achieve zero waste in the supply chain and have products and materials that can be continuously reused – no pre- or post-consumer waste” and produce products “using the fewest possible materials and designed for easy disassembly, while allowing them to be recycled into new product or safely returned to nature at the end of their life.” But, social sustainability might be the larger issue for companies such as these that have had controversial track records during the past 20 years in regard to the exploitation of unsafe working conditions, employee wages, and child labor most notably in factories in Southeast Asia.

One of the original guiding principles of the Toyota Production System was “respect for humanity,” and Nike appears to be openly addressing the employee problems within the more than 600 contract factories the company uses. Can large corporations that outsource manufacturing to so many different factories – in various developing countries with different laws and reporting standards – ever really manage and influence the systemic mindset and culture throughout these plants? Do you think that corporations whose supply chain is composed of factories working on a strictly defined contract basis (that also produce products for many other organizations as well as competitors) can ever fully partner with them in the Toyota tradition?

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