How Sustainability affects Supply Chain Management

Many CPCA member companies have sustainability goals. These goals are put in place for environmental reasons, but they also make good business sense. Efficient use of natural resources helps reduce operating costs in most cases. In recent years with the growing importance of product stewardship, now referred to as the circular economy, companies are also doing what they can to reduce the environmental impact of their products and services throughout the supply chain. The big challenge going forward is to scale those efforts over time.

Some of the ways in which paint and coatings companies address the alignment of sustainability with capital allocation decisions include:

• Setting and updating GHG reduction goals linking it with compensation and sustainable product innovation
• Using lifecycle assessment to set business goals to expand product offering and reduce risks
• Setting long-term goals that are consistent with climate science
• Ensuring R&D is aligned with sustainability criteria
• Having Chief Sustainability Officers (CSO), or those with that function, sign off with the controller on capital budget requests over a certain level (e.g., $5 million) and to ensure sustainability is included and evaluated in the decision-making process
• Having the CSO as one of the decision makers for large internal capital budget requests
• Developing metrics to factor in the social and environmental impact of their suppliers along the supply chain to determine true costs
• Making investments in new environmental research and innovation

Paint and coatings companies, large and small, and taking measures to address their environmental footprint. Consider the environmental initiatives of two strong SME members in Quebec, Laurentide Re-sources and CanLak, and how they are moving the needle on environmental innovation with support for research and investments in new environmental initiatives. Many companies are making concerted efforts to reduce their environmental footprint and to regularly report on the success of those initiatives.