What do companies such as Coca-Cola, Dow Chemical, Disney, and MillerCoors have in common? Bloomberg reports they are all using natural capital accounting, “a way for companies to accurately assess and manage risk, maintain their social license to operate, manage or lower operating costs, and secure a competitive advantage.”
Coca-Cola, for example, is working with The Nature Conservancy (TNC) and the World Wildlife Fund to assign monetary values to natural resources such as clean water. Then, company leaders consider those figures when making business decisions. The company’s efforts were set in motion in 2007, when it unveiled its goal to replenish all the water it uses in finished beverages by 2020.
Coca-Cola invests in projects to restore watersheds, reduce consumption, conserve local water resources, plant trees, and more. Then, it earns watershed credits verified by outside consultants that are counted against the volume of water consumed in the company’s bottling plants, Bloomberg reports. The company reports that by the end of 2013, it will replenish 42 percent of the water it consumes, or 17.7 billion gallons each year.
Replenishing the water, compared to transporting it and treating it, could mean lower production costs for the company. “Using funds to plant trees upstream, for example, filters the water naturally and reduces the need for water treatment centers,” Bloomberg reports. “The practice also enables the company to maintain its reputation in the community, enabling it to do business in the future.”
MillerCoors leaders also are concerned with protecting water resources. They work with TNC and a supplier in Idaho to improve farming techniques and conserve water without negatively impacting productivity. According to TNC, the project can be a model for other beer producers. Additionally, Bloomberg reports MillerCoors’s parent company is working with TNC to start water funds in Columbia, Ecuador, Peru, and Panama.
The article quotes Richard Mattison, chief executive officer of Trucost, a research and consulting organization. He says the number of middle-class customers is projected to increase by 3 billion by 2030. As demand escalates, so too will the price for natural resources, while availability will drop.
The future of supply chain planning
Consider the similarities between natural capital accounting and the definition of triple bottom line (TBL), which, according to the APICS Operations Management Body of Knowledge (OMBOK) Framework, “refers to people, planet, and profit. In TBL reporting, environmental, social, and economical aspects all are equally considered.”
Whether you are considering natural capital accounting, the TBL, risk, or all of them combined, APICS can help you prepare your supply chain and your career for the future. Early registration is now open for APICS 2013, September 29–October 1, 2013, in Orlando, Florida. The conference features eight learning paths, including risk and resiliency and sustainability. Speakers will share practical solutions to the challenges they face themselves at companies such as Art.com, Philips, Pratt & Whitney, and more. Visit apics.org to find out more and take advantage of early-registration discounts.