We recently published the results of this survey in a report titled "The State of Green Supply Chain Management," co-written by me and Dr. Walfried Lassar, the Director of the Ryder Center for Supply Chain Management at FIU. You can register to download the report for free by clicking here.
The survey results confirmed many of our hypotheses, but there were a few surprises. For example, we asked the respondents which external parties they are currently collaborating with on "green" initiatives, or plan to work with in the future. The chart below summarizes the results.
Dr. Lassar and I hope to explore these questions further in phase two of our research, which we're kicking off this month (if you'd like to participate, please send me an email at email@example.com). But here are my theories, based on a few conversations, as to why companies may not want to work with competitors on "green" initiatives:
- "Green" can be used as a competitive weapon, especially from a brand perspective. For example, if a company reformulates one of its leading products to be more environmentally-friendly, and it costs less and performs better than the existing version and competing products, the company could potentially take market share away from its competitors.
- "Green" can reduce a company's operating costs, thus strengthening its financial performance and shareholder value. If a retailer, for example, finds a way to reduce the amount of energy used by its stores by 30 percent, the financial benefits could be great.
- Working with competitors is always problematic from a regulatory perspective (e.g., risk of being charged with collusion).
It's important to note, however, that the sample size of our survey is relatively small (70 total respondents). And the respondents were primarily logistics executives. If we had surveyed 1,000 CEOs instead, I'm sure the results would have been different. But in favor of more or less collaboration?
Some early adopters of the "green" movement are certainly collaborating, at least via third-party initiatives. Dell and HP, for example, are working with the Carbon Disclosure Project, and so are P&G and Unilever. At this stage of the game, industry-level collaboration is critical for developing standard metrics and measurement methodologies, a key pre-requisite for accelerating the adoption of "green" practices. Most of the collaboration taking place today is along these lines.
But will these same companies share best practices and intellectual property that would benefit the environment greatly if widely adopted, but could also provide them with a significant market advantage if they kept the knowledge to themselves? The answer, I suppose, will depend on how broadly companies define social responsibility.
What do you think? Should companies view their "green" initiatives as a competitive weapon, or should they share their best practices and IP with other companies, including their competitors? Where do you draw the line when it comes to collaborating on "green" initiatives?