Using Corporate Procurement as a Lever
There is a small ray of significant promise coming from the little known but bustling world of business between companies that buy and sell from one another. Some buyers are beginning to press their suppliers toward “corporate responsibility” as consumer and environmental groups would define that term. It has been a conventional practice for companies such as General Motors and Ford Motor Co. to present rigorous standards for their tire companies to meet before selling them tires, for example. But now something quite different is “beginning to happen.
Using its buying power leverage over its suppliers, Esprit de Corp, a clothing manufacturer from San Francisco, is preparing a short questionnaire for its suppliers that starts with these words:
“Esprit is committed to promoting social and environmental responsibility. Whenever possible we would like to support companies with similar goals by developing long-term supplier relationships. Please take the time to complete this questionnaire. Attach supplemental documentation if applicable.”
There follows a series of specific questions on their suppliers’ management of wastes and pollution, on energy conservation moves such as carpooling for employees and upgrading equipment for maximum efficiency in lighting, insulation, automatic thermostatic controls, etc. Other questions focus on recycling efforts covering manufacturing processes, participation in waste exchanges and reprocessing wastes for sale as usable products.
Soon, Esprit’s initiative will be. joined by other mid-size companies started by entrepreneurs within the last twenty-five years who have a broader horizon for business sensitivities to public needs and rights. Ben and Jerry’s Ice Cream is another one of several dozen companies forming a new progressive business association to give a more organized voice to these values.
From another corporate procurement angle comes The Travelers Insurance Co. which was the first insurance company to completely equip its fleet of 3600 company cars with driver’s side airbags.
Senior Vice President F. Peter Libassi, the mover behind the fleet conversion to air-bags, which is an economically successful and life-saving project, is announcing a logical extension. Travelers’ employees on company business put on 2.3 million miles a year in rental cars. So, the company has arranged with National Car Rental to automatically provide employees of Travelers with air-bag equipped cars if they are available.
National Car Rental has a notation in its computer system which alerts it to Travelers’ request for airbag equipped cars. John Burnep, a Travelers engineering account manager, found out the value of such a policy when his rental car collided nearly head-on with another automobile at a Hartford intersection. The airbag inflated on impact. An uninjured Burnep remembers seeing the air bag light flash on when he got into his car earlier that day and saying to himself that he wouldn’t be needing that.
Now imagine if billions of dollars of corporate buying power was conditioned on manufacturers and suppliers meeting frontier product safety standards and environmental standards for consumers and communities. It certainly would put new impetus behind a broader type of consumer and environmental movement in our country.
Maybe more people should ask companies to start emulating the kind of foresight displayed in the above-mentioned examples by Esprit and The Travelers.