Those of you doubting my prediction that 2007 would go down as The Year of Sustainable Supply Strategies, can’t deny it now. The past weeks have witnessed big and highly publicized commitments from the White House and top corporations to adopt more environmentally and socially sound business practices.

Last night in his State of the Union address, President Bush proposed cutting US gasoline usage by 20% over the next decade, use more sustainable energy sources, and ease US reliance on foreign oil (more on that later).

The President’s comments followed recent commitments from big-name corporations — such as DuPont Co. and General Electric — pushing for mandatory CO2 emissions caps and the development and adoption more sustainable engergy sources and more environmentally friendly products.

Of course, I warned you that more stringent regulations were coming. But, as I noted before, the leaders in corporate responsibility and sustainable supply strategies are not viewing these approaches as an added cost of business. Instead, they are see sustainability as a way to operational and supply costs, increase brand equity and revenues, and penetrate new markets. (It didn’t go unnoticed that the fastest growing business units for both DuPont and GE are those focused on sutainable energy and resources, such as cellulosic ethanol or desalinization technology.)

I have chronicled on Supply Excellecne how companies like Hewlett-Packard, Toyota, Adobe Software, Microsoft, Google, Wal-Mart, and others have used sustainable supply strategies for a competitive advantage. I have even shown how supply management organizations, like HP and Airbus, are beginning to use environmental and social responsibility as part of their supplier selection and performance measures.

The cover story of the latest BusinessWeek issue says it all: Imagine a world in which eco-friendly and socially responsible practices actually help a company’s bottom line. It’s closer than you think.

Indeed, BusinessWeek features more detailed accounts of how sustainable supply strategies employed by some of the above companies, including Wal-Mart and Toyota, have helped reduce costs, increase sales, and secure a competitive advantage in the marketplace. (Look no further than the recent rumors that Ford may partner with Toyota to get access to the hybrid motor supply that the Japanese automaker had the foresight to develop ahed of the marketplace.) As the article states: “Now there’s a more sophisticated understanding that environmental and social practices can yield strategic advantages in an interconnected world of shifting customer loyalties and regulatory regimes.”

The article also provides evidence of how sustainable supply strategies can also help avoid supply risks. “Embracing sustainability can help avert costly setbacks from environmental disasters; political protests; and human rights or workplace abuses.” The article points to supply disruptions experienced by Royal Dutch Shell in Nigeria and Unocal in Burma. It also fingers the impact poor supply oversight had on Sony when it was revealed  

But additional examples of how sustainable approaches can mitigate supply risk are plentiful. Consider the impact that not effectively assessing and monitoring labor practices has had on companies like K-Mart or Nike. Or how HP’s recycling effort helped it weather price and supply challenges for precious metals. And look how other companies, like Starbucks, have turned the proactive development and protection of labor and wages in emerging markets into a positive marketing strategy.

The overall message to supply management executives: If you’re not on board with sustainable supply strategies — get off the boat. 

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