Shining a Spotlight on the Supply Chain: Leading retailers set a new standard for transparency

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This is the eighth in a weekly series highlighting 15 green business innovations from Environmental Defense Fund's Innovations Review 2009

Last week we talked about how Bon Appetit Management Company's Low Carbon Diet is steering diners in its corporate and university cafeterias towards greener eating. The necessity for such guidance reveals a reality of our society: consumption has become detached from production.

We've accepted this phenomenon for decades, subversively encapsulated in the phrase "Don't ask how the hotdogs are made." Chuckle, chuckle.

Well, despite deceptively stretched supply chains, it seems the public does want to know how the proverbial hotdogs are made not to mention: clothes, cars, computers, etc.

As new media inevitably expand our understanding of the world, hordes of informed customers will reject and thereby destroy unethical and/or inefficient supply chains.

Transparency: Pull the wool from their eyes, then tell them how it was made

Traceability, in supply chains can make a real difference: It hatched the organic food movement (pun intended), as well as certification efforts in coffee, forest products and seafood, among other things.

While most supply chains remain opaque, a handful of smart companies are striving for transparency, boldly letting their customers, activists and competitors see their strengths and weaknesses.

For example, on Patagonia's website, the Ventura, California-based company invites customers to track "The Footprint Chronicles" of their products to explore environmental impact from design to delivery. A typical t-shirt, their most popular item, has traveled from design in Ventura, to Turkey for cotton, LA for manufacture, and Reno for storage.

The site also shows that said T-shirt requires about 4.7 kilowatt-hours of energy to produce, generates 3.5 pounds of CO₂ (about eight times its weight), and travels 7,840 miles, perhaps surpassing the lifetime mileage of its eventual owner.

For all its honesty, the company earns the right to report on "the good" it uses only organic cotton and customers may recycle their used T-shirts.

How'd they bring my bling? Wal-Mart's traceable jewelry

Compared to Patagonia (or any company really), Wal-Mart has a massive impact on its suppliers and the global environment.

By offering new jewelry branded as "Love, Earth", launched by the giant retailer in 2008 Wal-Mart has attempted to source and market more responsible gold and silver jewelry.

Following these globally-traded commodities from the store back to the mine, the retailer leverages its huge influence over one of the most socially and ecologically dirty businesses on earth - mining. At the same time, Wal-Mart distinguishes the gold in its jewelry mined with certain standards through a relationship with a particular mine from the gold that comes from unknown and likely more environmentally and socially damaging sources.

Definition: Efficient is Economic

According to the dictionary (and thesaurus of course), "efficient" literally means "economic." Applying that law to this case, we see that as more supply chains become transparent, consumers can decide to support companies that act more responsibly. Thus, embracing this trend will lend proactive companies advertising ammunition against their competitors while motivating employees and associates to rectify previously invisible or irrelevant imperfections in their production process.

In addition to all its positive externalities, transparency is just good business.