The 'Third Industrial Revolution' and sustainable sourcing

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The People's Daily on Tuesday proclaimed that China and the E.U. were leading the 'Third Industrial Revolution,' a view espoused by Jeremy (or Jereny as horrendously misspelt in the article) Rifkin, an economist and author of 17 books on environmental, energy and economic issues. The E.U. and China, Rifkin posited, have made binding commitments to renewable energy. For its part the Chinese government pledged to have renewable energy rise to 15% of all energy consumption by 2020, which would supposedly make it a leading light in the so-called Third Industrial Revolution.

Facing menacing environmental concerns and eager to present itself as a progressive nation in sync (or harmony if you will) with the environment, China has invested in more environmentally-friendly policy initiatives (such as tax breaks for makers of greener products) and in providing technological support for developing efficient and sustainable energy from renewable sources (see description of report on China energy industry). Yet the impact of global supply chains on economic, social and environmental conditions in sourcing countries remains a battleground in the debate on corporate social responsibility.

In China, a slew of recent unsettling instances ranging from product quality and safety issues to cases of slave labour have, however, intensified pressure for ethical and sustainable sourcing. Ethically-sourced products, moreover, are moving into the mainstream, and market research has indicated that customers are increasingly seeking out greener products. A survey (see also summary here) conducted in 2007 of shoppers in 15 countries found that more than half of global consumers prefer to purchase products and services from a company with a strong environmental reputation. Shoppers in China, by the way, reported the greatest interest in environmentally responsible purchasing, with 67% preferring greener brands.

So if the customers want it, then surely they must be given it? Starbucks (and more recently Wal-Mart) famously put their best foot forward when the company implemented a scheme to pay farmers handsome prices for their crops, forging long-term relationships with them, offering technical support and contributing to social development programmes (see Food Production Daily article). There is undoubtedly a toll to pay for companies treading the path of sustainable righteousness, yet as added costs and the maintaining of ethical standards and codes of conduct are swallowed up in the unassailable trend of sustainable sourcing, we will advance further down the road of the imperative.

In a publication entitled Beyond Monitoring: A New Vision for Sustainable Supply Chains, the organization Business for Social Responsibility recently put forward a new organizing framework for companies to ensure ethical supply chains. Seeking to integrate labour and environmental considerations more fully into companies' procurement efforts and to re-emphasize the role of workers and governments, the framework rests on four pillars:

  • Buyer internal alignment of purchasing practices with social and environmental objectives
  • Supplier ownership of good working and environmental conditions in their workplaces
  • Empowerment of workers who take a stronger role in asserting and protecting their own rights, and
  • Public policy frameworks that ensure wider and more even application of relevant laws
So while we may think of the immeasurable ways the first two industrial revolutions changed our world and our planet, bringing great advances in our standard of life as well as damage to our environment, all I'll say is BRING ON NUMBER THREE!  

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Check out the progress that the Third Industrial Revolution is making now.

http://www.prweb.com/releases/2008/12/prweb1712504.htm

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