Executive Briefings

Green Isn't Cheap, But Is It a Bargain in the Long Run?

The reason why more manufacturers haven't extended environmental initiatives throughout their supply chains is likely cost. For instance, consumer-electronics manufacturers pay an estimated $3bn annually to meet European Union regulations that restrict the use of certain substances in their products, according to a June 2008 study published by the Consumer Electronics Association. When Wal-Mart announced its green supply chain mandate in July, the company said it was premature to estimate the cost to suppliers, The Wall Street Journal reported. But the paper noted that clothing manufacturer Patagonia Inc. said its well-established supply chain sustainability efforts had been costly.

That may account for why the number of manufacturers adopting green supply chain programs appears to be few and far between. Only 10 percent of companies have implemented successful green supply chain initiatives, according to a survey of 245 supply chain executives published in February by consulting firm Accenture.

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The reason why more manufacturers haven't extended environmental initiatives throughout their supply chains is likely cost. For instance, consumer-electronics manufacturers pay an estimated $3bn annually to meet European Union regulations that restrict the use of certain substances in their products, according to a June 2008 study published by the Consumer Electronics Association. When Wal-Mart announced its green supply chain mandate in July, the company said it was premature to estimate the cost to suppliers, The Wall Street Journal reported. But the paper noted that clothing manufacturer Patagonia Inc. said its well-established supply chain sustainability efforts had been costly.

That may account for why the number of manufacturers adopting green supply chain programs appears to be few and far between. Only 10 percent of companies have implemented successful green supply chain initiatives, according to a survey of 245 supply chain executives published in February by consulting firm Accenture.

Read Full Article