Volume 17, Number 10
October 2011

Watch a 4-minute interview with Rob Klassen discussing how companies can improve the social and environmental performance within their supply chains.

 

On the heels of recent scandals such as the Mattel lead paint crisis, the public is increasingly holding companies accountable for the social and environmental outcomes throughout their global supply chains.
 
And in addition to minimizing the risk of disasters, companies that improve the environmental and social performance within their supply chains may also improve their financial outcomes.
 
Rob Klassen, Professor of Operations Management and Ivey's Magna International Inc. Chair in Business Administration, has been researching what measures companies can take to improve their supply chain management and how these measures impact their performance.
 
"Whether there is an environmental issue, such as a concern about oil spills or other sorts of disaster, or whether it's more subtle, like managing customer reaction to products or product safety issues, all of these things play out in the marketplace, potentially harming a company's economic long-term viability," said Klassen. "The other side is that there can be market opportunities in responding better to such concerns."
 
Klassen said managers sometimes trust their suppliers are doing the right thing without taking measures, such as auditing, to ensure their suppliers are following environmentally and socially responsible protocols.
 
According to Klassen, regardless of how large or diverse a supply chain, increased monitoring will pay off in the long run.
 
"Non-governmental organizations, customers and government regulators are increasingly paying attention to these (environmental and social) issues so companies have to try and manage that side of their business," he said. "The way you ultimately work with your stakeholders can affect your economic performance as well."

For a summary of Klassen's research, please visit Network for Business Sustainability.

Klassen will lend his expertise in this area to an upcoming Ivey Idea Forum on October 27 with Ezra Levant at Ivey's ING Direct Leadership Centre in Toronto. Levant, best-selling author of Ethical Oil: The case for Canada's oilsands, will discuss the financial, environmental and ethical issues around the oil we use in our daily lives, and why Canada's oil sands are a better choice than other oil sources.

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