The business case for extending sustainability in the supply chain: The Burt's Bees Story

Jenny Sebley, former supplier sustainability manager at Burt’s Bees, spoke in my sustainable supply chain class today.  Sustainable supply chains was a key issue at Burt’s Bees, and continues to play an important role.

There were several business drivers behind this.  The first focus was on reducing waste and leaning the supply chain.  The brand was also key – Burt’s Bees needed to ensure it was sourcing raw materials using sustainability materials and labor rights.

Risk management became a big issue as supply is a key input into customer-facing production.  Jenny notes that “if we had a bad crop, than we might not have enough material to go forward.  As we expanded into larger markets, we needed sources that were sustainable.  And the last piece was around cost management and managing re-use opportunities.”  This became the business case.

Jenny’s role at BB was created through discussions with the CEO – who emphasized how BB needed to drive sustainability down to suppliers.  A lot of tier 1 suppliers were distributors.    Management recognized that to drive sustainability up the supply chain was essentially managing risks.  For example, one issue was the palm oil issue for soap, and this was coming up to the forefront in public reports.   BB recognized they needed to be proactive in identifying what was happening.

The goal was to develop a responsible sourcing strategy.  Marketing and PR were big on this – and this was relegated to a Corporate Social Responsibility manager.  This was a commitment to continued quality and cost, but to also consider the sustainability side as well, with suppliers who upheld their good business model.  For example – whyisn’t bees wax sourced in NC?  As growth expanded, there is a huge demand for bees wax – and it was feasible to do so early on, but challenges emerge over time.  Supplier diversity and partnering with the right supplier was also an issue.

Out of the strategy, came the tools.  This included a supplier code of conduct policy, as well a a scorecard that quantified supplier performance on environment and social impacts.  Jenny worked with Clorox (who acquired BB around that time) to assure the code was aligned, as Clorox has diverse set of brands including charcoal, consumer products, etc.  A questionnaire was also used to drive discussions with suppliers, and a handbook was provided for suppliers to be able to improve their environmental and social impacts.

One of the key outcomes was a “Greater Good” Questionnaire.  Suppliers who received it didn’t always respond to it.  But it became a key in the second round to ensure the buyers at BB had the response tied to their goals – and this improved the leverage through discussions.  Burt’s Bees was tied to Walmart, and this provided additional leverage for the effort.

The Scorecard is a multi-pronged assessment tool that drives sustainable performance.  It is critical to have suppliers thinking about opportunities to drive sustainable solutions, and also sends a clear message that sustainability is an important issue for the buying company.

A big pushback was audit fatigue.  Suppliers were receiving requests for audits from many other companies, including Revlon, L’Oreal, and others.  This hadn’t come out in personal care, but at the retail level.  This is a big opportunity that has been adopted in other industries like apparel, through the Sustainable Apparel Coalition, that are driving common sustainability indices.

The key?  Jenny notes that the biggest issue is to influence buyers, and not just relying on a CSR person to drive sustainability.  It’s hard to put “teeth” into a sustainability program if you don’t have this level of engagement.  This involves leadership, and tying buyer performance to sustainability improvements, and supplier responses to audits.  The second point is influencing supplier’s behavior.  This is best achieved by going through buyers.