This document discusses the connection between risk and sustainability. It argues that risk and sustainability are interconnected rather than separate concepts. Improved process management and automated data tools are needed to help organizations address increasing demands around risk management and sustainability. The document provides examples showing how high-profile incidents have increased awareness of the need for companies to take responsibility for labor and safety conditions in their supply chains. It suggests that managing risk and sustainability together through a systems approach can create greater value for supply chains.

1.
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
1
Risk
and
Sustainability
Connection
1. Introduction
This
paper
will
explore
and
relate
the
connection
with
risk
and
sustainability.
Secondarily,
there’s
a
need
for
improved
process
management
and
automated
data
tools
or
systems
to
enable
dealing
with
the
demands
of
increased
risk
and
more
sustainability.
Thirdly,
increased
transparency
model
–
visibility
using
improved
process
and
automation
tools
supports
better
traceability
in
the
supply
chain
that
will
reduce
risk
and
create
sustainability.
Risk
and
sustainability
are
not
separate
nor
are
they
mutually
exclusive.
They
are
connected
to
one
another
like
the
head
and
tail
of
a
coin.
Risk
and
sustainability
are
not
typically
seen
together
being
opposite
sides
of
the
coin.
Risk
is
seen
as
the
home
of
CFOs
and
governance
to
mitigate
impacts
financially
and
protect
shareholders’
value.
Sustainability
is
seen
as
the
domain
of
green
movements
in
reducing
the
carbon
footprint
or
emissions.
From
these
two
traditional
perspectives
they
are
seen
as
in
their
own
worlds
and
not
linked
or
even
connected.
They
can
be
looked
at
and
worked
as
a
complement.
If
not,
they
can
work
against
you.
The
first
step
becomes
an
understanding
of
the
connection
they
have
to
each
other.
The
key
is
a
systems
approach
in
recognizing
the
greater
value
to
supply
chain
by
managing
them
together.
The
linkage
between
risk
and
sustainability
is
gaining
traction
due
to
social
and
environmental
impacts
and
requirements
for
tighter
regulations
with
more
detailed
monitoring.
Leaders
in
organizations
are
recognizing
sustainability
is
more
than
environmental.
In
fact,
it
requires
managing
all
risk
for
business.
Global
Supply
Chains
in
the
future
will
need
to
manage
both
a
greater
degree
of
risk
requirements
and
increased
sustainability
value.
To
achieve
this,
stronger
process

2. 2
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
management
and
new
automation
tools
will
support
these
demands
on
companies’
supply
chain
for
risk
performance
and
corporate
social
responsibilities
(CSR).
Naturally,
there
is
the
triple
bottom
line
(3BL)
of
social,
environmental
and
economics.
This
is
balanced
against
a
more
sustainable
supply
chain
with
reduced
risk.
Technology
is
the
vehicle
and
one
of
the
main
drivers
for
heightened
awareness
though
the
use
of
social
media
and
the
Internet,
which
has
challenged
the
traditional
view
or
approach
and
relationship
to
each
other.
There
are
a
number
sources
and
papers
that
align
with
this
thinking
of
connections
with
risk,
sustainability
and
transparency,
which
I
will
reference
as
examples.
Figure 1 Global supply chains are long and complex and must be managed
correctly to ensure environmental, social and economic sustainability are
balanced against reduced risk. Photograph: Royalty-Free/Corbis

3.
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
3
2. The
Body
1. Heighten
Awareness:
In
recent
news
from
Dhaka,
Bangladesh,
channel
masters
(retailers
e.g.
H&M
+
Zara;
Joe’s
of
Loblaw’s-­‐Canada)
are
seen
as
accountable
for
a
factory
building
caving
in
killing
close
to1000
people
and
having
poor
labour
conditions
where
their
products
are
made.
The
initial
thinking
is
“let’s
do
what
we
need
to
so
we
avoid
any
further
negative
press.”
So
what
are
the
positive
actions
and
processes
that
need
to
go
into
place
now!
Send
teams
to
have
our
own
people
in
place
at
the
facility
to
monitor
and
audit
what
outsourced
manufacturing
is
doing
and
work
with
the
local
governments
on
agreements
for
improved
labour
practices
and
standards.
Need
to
ensure
our
supplier’s
supplier
and
outsourced
manufacturers
are
sharing
our
outlook
on
corporate
social
responsibility
(CSR).
Below
is
an
extract
of
an
article
from
the
Canadian
Press.
This
relates
directly
to
the
situation
mentioned.
See
complete
article
and
video
at
http://www.huffingtonpost.ca/2013/05/15/bangladesh-­‐factory-­‐joe-­‐
fresh-­‐loblaws-­‐safety-­‐pact_n_3275213.html
“TORONTO
-­‐
Loblaw
Companies
Ltd.
said
Tuesday
that
it
will
sign
a
pact
to
improve
fire
and
building
safety
in
Bangladesh
following
the
collapse
of
a
factory
in
that
country
that
killed
more
than
1,100
workers.”
“The
safety
agreement
comes
two
years
after
a
fire
and
safety
proposal
drawn
up
by
labour
unions
was
first
rejected
by
many
clothing
companies
as
too
costly**(see
updated-­‐
insert
below)**
and
legally
binding.
The
latest
agreement
is
a
revised
version
of
that
proposed
pact.”
**Costs
-­‐Retailers
update
safety
conditions
in
Bangladesh
–
improving
standards.
It
is
noted
in
the
interviews
clip
below.
“It
takes
as
little
3
cents
to
15
cents
per
T-­‐shirt”.
There
is
pressure
on
sustainability
risk
for
social
and
economic
improvement
in
better
standards.
http://bloom.bg/12peMkA

4. 4
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
2. Traditional
Viewing
/
Approach:
Typically
a
remote
outsourced
manufacturer’s
factory
building
collapsing
in
a
far
off
land
and
inherent
poor
labour
practices
were
not
viewed
as
a
direct
risk.
As
risk
was
more
related
to
a
CFO
perspectives
on
the
company’s
financials
and
shareholder
value.
Social
and
environmental
impacts
are
not
apparent
unless
directly
quantifiable
on
the
balance
sheet.
Purchasing
has
the
supplier
relationship.
This
usually
did
not
extend
beyond
the
first
level
suppliers.
Nor
did
it
take
in
account
the
supplier’s
supplier
or
offshore
outsourced
manufacturers,
which
is
geographically
remote
or
distant
to
their
own
controlled
operations.
Because
of
higher
transparency
globally
on
such
situations,
demands
for
sustainable
products
and
higher
expectations
of
standards
by
shareholders
/
consumers,
retailers
and
manufacturers
are
taking
the
social
and
environment
impacts
seriously
and
trying
to
understand
the
extended
risk.
The
initial
thinking
is
let’s
do
what
is
needed
to
avoid
any
further
negative
press.
So
what
are
the
positive
actions
and
processes
that
need
to
go
in
place
now?
Send
teams
to
have
our
own
people
in
place
at
the
facility
to
monitor
and
audit
what
outsourced
manufacturing
is
doing
and
work
with
the
local
governments
on
agreements
for
improved
labour
practices
and
standards.
Need
to
ensure
our
supplier’s
supplier
and
outsourced
manufacturers
are
sharing
our
outlook
on
corporate
social
responsibility
(CSR).
In
addition,
resources,
retailers
and
manufacturers
are
recognizing
the
potential
of
enhanced
value
to
their
corporate
brands
in
creating
sustainable
products
and
subsequent
revenue
increases.
This
can
result
in
more
profitability
by
taking
a
stronger
recognition
on
affirmative
actions
with
social
and
environmental
initiatives.
Plus,
there
are
potential
economics
benefits
and
opportunities
to
be
gained.
With
increasing
awareness
of
risk
and
sustainability,
connecting
the
dots
is
starting
to
take
place.
The
linkage
between
risk
and
sustainability
is
gaining
traction.
It
is
due
to
social
and
environmental
impacts
and
requirements
for
tighter
regulations
and
consumer
/

5.
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
5
shareholder
expectations
that
are
increasing.
This
naturally
will
create
more
pressure
on
global
supply
chains
and
the
need
for
more
detailed
monitoring
with
better
transparency.
Future
initiatives
around
robust
systems
and
processes,
automation
tools
for
improved
transparency
up
and
down
the
supply
chain
is
required.
They
will
be
essential
to
differentiating
your
supply
chain
and
adding
greater
value
to
it.
In
the
near
and
longer
term,
the
traditional
view
and
approach
will
give
way
to
a
more
integrated
approach
across
the
enterprise.
Robust
systems,
tools
and
processes
will
enable
improved
transparency
with
agility
and
flexibility
for
supply
chain
resilience,
adaptability
and
responsiveness.
3. Risk
to
sustainability
Leaders
in
organizations
are
recognizing
sustainability
is
more
than
environmental.
Risk
drives
sustainability.
In
fact,
it
requires
managing
all
risk
for
business.
Supply
chains
have
risk
embedded
within
them
by
their
very
nature.
Global
Supply
Chains
in
the
future
will
need
to
manage
both
a
greater
degree
of
risk
requirements
and
increased
sustainability
value.
As
noted
and
mentioned
later,
to
achieve
this
a
stronger
process
management
and
new
automation
tools
for
increased
transparency
will
support
these
demands
on
companies’
supply
chains
for
risk
performance
and
corporate
social
responsibilities
(CSR).
Looking
at
risk
mitigation
along
the
links
in
the
supply
chain
with
an
eye
on
sustainability
as
it
relates
to
triple
bottom
line
(3BL)
of
social,
environmental
and
economic
impacts
or
value
from
suppliers
and
products
is
a
key
focus.
It
is
really
about
getting
to
know
your
whole
supply
chain
end
to
end.

6. 6
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
Below
are
a
few
slides
that
relate
to
risk
points:
Figure 2 Figure 3
Figure 4 Figure 5
Supply Chain Risk
Know the Supply Chains Quantify the Risks
META Research Report, February 11, 2002
“30% of all companies that experience a catastrophic
loss will fail within the first 24 months and an
additional 29% will fail beyond 24 months”
Supply Chain Risk–All Impact or an Opportunity?
• Supply Chain Risk Awareness is needed:
• Typically supply chains are silent until something goes wrong
• Volatility and risk to Supply Chains (SC) is the norm not an exception
• Risk and Supply Chain are like a head and tail of a coin not mutually
exclusive but can be complementary base on the approach
• Supply Chain Risk impact or restrictions is handled:
• Create a vision to predict, prevent, mitigate impact to Supply Chains (SC)
• Develop contingencies and buffers with options
• Employ smart technologies
Cont’d Supply Chain Risk–All Impact or an Opportunity?
Supply Chain Risk
Opportunity
• Looking down the SC pipeline
creating more robust
processes into your suppliers
supplier
• Bigger role by learning more
about risk and employing
solutions to handle it
• Develop cross functionally risk
process and create synergies
Supply Chain is
Everywhere…So Many
Opportunities!
It’s a Boarder View – Supply Chain Risk- Has Opportunity!

7.
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
7
Whether
it’s
an
extended
supply
chain
globally
or
multi-­‐tired
or
both,
there’s
an
opportunity.
The
strategic
viewing
is
from
the
design
stage
through
raw
materials
sourcing
and
manufacturing
to
distribution
at
the
customer
level
and
recycling.
Not
only
is
more
sustainability
pushed
from
the
customer
end,
it
requires
a
shared
outlook
with
various
levels
outsourced
manufacturing,
and
the
participation
of
suppliers
to
acknowledge
environmental
and
social
alignment
and
mitigate
economic
exposure
to
risk.
In
the
podcast
“Risk,
Economics
and
the
Environment
–
Defining
Sustainability
and
Best
Practices
for
Businesses”,
http://www.tompkinsinc.com/podcast/2012/podcast-­‐92-­‐risk-­‐
economics-­‐and-­‐the-­‐environment-­‐defining-­‐sustainability-­‐and-­‐best-­‐
practices-­‐for-­‐businesses/
We
hear,
it
is
not
just
about
the
environment,
but
just
as
importantly,
it
is
about
economics
and
risk
reduction
too”.
Bruce
Tompkins,
Executive
Director.
Below
is
an
example
that
relates
more
to
managing
global
sourcing
risk.
It
does
beg,
however,
the
same
question:
that
is,
do
you
know
your
supply
chain
and
do
you
have
contingencies
in
place
for
disruptions?
By
understanding
your
supplier’s
quality
up
the
supply
chain
you
also
view
their
alignment
for
social
and
environmental
responsibilities
• http://www.youtube.com/watch?v=h7cQjQJHbUs
I
found
the
above
link
on
Managing
Global
Sourcing
Risk
to
be
quite
interesting.
Especially
around
the
supply
network
side
with
vendors
or

8. 8
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
contact
manufactures
that
where
not
meeting
quality
as
seen
by
the
brand
owner.
Recently,
that
situation
impacted
Lululemon
which
is
a
sports
or
leisure
apparel
company.
Their
main
black
stretch
workout
and
yoga
pants
were
drastically
sorted
on
delivery
to
their
stores
due
to
quality
issues
(it
was
too
see
through
–
conjecture
is
the
thread
weave
was
to
light)
and
stock
was
down
4%
as
consequence.
Shareholder
experience
was
not
delighted.
Again,
risk
is
embedded
in
supply
chains
and
global
sourcing
which
requires
pro-­‐active
approach
and
extended
plans
to
mitigate
it.
4. Sustainability
to
risk
Retailers
and
manufacturers
are
recognizing
the
potential
of
enhanced
value
to
their
corporate
brands
in
creating
sustainable
products
and
subsequent
revenue
increases.
This
can
result
in
more
profitability
by
taking
a
stronger
recognition
on
affirmative
actions
with
social
and
environmental
initiatives.
Plus,
there
are
potential
economic
benefits
and
opportunities
to
be
gained.
Below
is
a
related
link:
http://news.thomasnet.com/green_clean/2012/12/03/businesse
s-­‐increasingly-­‐rationalize-­‐supply-­‐chain-­‐sustainability/
Sustainable
supply
chain
requires
managing
and
accounting
for
the
impact
of
major
environmental,
social
and
economic
(3BL)
factors
throughout
the
lifecycle
of
products.
That
means
companies
have
to
keep
track
of
all
the
risks
in
their
supply
chains.
Further,
PWC’s
recent
study
sighted
the
main
reasons
for
investing
in
sustainable
supply
chain
management,
according
to
their
respondents,
are
to:
• manage
the
risk
of
unintended
environmental
or
social
damage;
• manage
their
company’s
reputation
and
the
expectations
of
its
shareholders;

9.
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
9
• reduce
costs
and
realize
productivity
improvements,
and;
• create
sustainable
practices,
processes
and
products,
thereby
increasing
revenues
and
enhancing
the
corporate
brand.
They
went
on
to
say
…”risks
run
both
ways”,
according
to
The
Carbon
Disclosure
Project’s
(CDP)
'Reducing
Risk
and
Driving
Business
Value'
.
https://www.cdproject.net/CDPResults/CDP-­‐Supply-­‐Chain-­‐Report-­‐2013.pdf
Climate
change
is
recognized
by
70
percent
of
CDP
members
as
a
potential
business
risk.
The
report
shows
that
both
CDP
members
and
their
suppliers
see
the
supply
chain
as
vulnerable
to
physical
disruption
from
events
such
as
droughts,
flooding,
hurricanes,
and
water
shortages.
They
realize
such
events
can
lead
to
reductions/disruptions
in
production
capacity
(44
percent),
as
well
as
increase
operational
costs
(31
percent)”.
5. Transparency
via
process
management
and
automation
tools
First
of
all
a
cultural
shift
will
have
to
occur
in
most
companies.
Some
companies
are
more
advanced
and
the
sophisticated
ones
are
all
ready
there.
Moving
from
I
shape
position,
which
is
a
silo
way
of
thinking
to
a
T
shape
approach
in
reaching
out
beyond
one’s
functional
area
and
own
enterprise
will
not
be
an
option,
but
a
requirement
in
the
near
future.
Simplifying
the
understanding
through
time-­‐process-­‐based
mapping
and
developing
trust
relationships
across
the
supply
chain
is
key
with
improved
transparency.
Future
supply
chain
management
(SCM)
will
require
a
greater
emphasis
on
automation
and
efficiency.
Leaders
are
turning
to
new
technologies.
Cloud
solutions,
such
as
control
towers,
GPS
and
down
to
RFID
will
facilitate
automation
and
efficiency
in
support
of
better
transparency
models.
In
addition,
SCM
will
require
suppliers
to
share
their
outlook
and
emphasis
on
(3BL)
environmental,
economic
and
social
issues.
According
to
another
recent
study,
it
will
be
data
that
drives
sustainability.
PWC
said
more
than
50
percent
of
respondents
to
the
survey
stated
that
they
are
implementing
or
planning
to
implement
new
tools
for
better

10. 1
0
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
process
automation
and
transparency.
In
addition,
it
was
just
under
two
thirds
who
consider
automation
and
data
management
as
vital
parts
of
their
operations
by
2015.
They
went
on
to
say
this
focus
is
consistent
across
all
industries,
but
the
pharmaceuticals
and
life
sciences;
technology
and
telecom;
and
chemicals
and
process
industries
are
at
the
forefront
of
this
movement.
PWC
results
on
businesses
across
all
sectors
indicate
they
want
integrated
solutions
that
encompass
everything
from
order
to
delivery.
As
Industry
Market
Trends
reported
last
week,
manufacturers
are
turning
to
“big
data”
to
extract
more
value
from
the
supply
chain,
particularly
as
it
pertains
to
logistics
and
distribution
operations.
PWC
said
that
data
management
and
automation
is
critical
to
achieving
a
leadership
position
in
sustainable
supply
chains,
according
to
the
CDP
report.
Implementing
data
collection
tools
across
the
supply
chain
builds
efficiency
and
reduces
redundancy
in
reporting.
Some
companies
are
using
basic
procurement
data
systems
to
collect
basic
sustainability
information
from
suppliers.
Others
are
using
more
advanced
platforms
to
monitor
climate
change-­‐related
data
and
metrics.
But,
while
tools
are
important,
CDP
notes
that
cross-­‐functional
collaboration,
supplier
engagement
and
communication
are
still
the
foundation
of
solid
working
relationships.
With
stronger
process
management
and
new
automation
tools
there
will
be
greater
support
to
meet
the
demands
on
company’s
supply
chains
for
addressing
risk
performance
and
corporate
social
responsibilities
(CSR).
The
increased
traceability
from
these
improved
processes
and
new
automation
tools
will
create
better
visibility
and
transparency
that
will
be
required
in
future
global
supply
chains.
Having
better
transparency
means
insight
into
information
starting
from
the
source
of
supply
to
end-­‐of-­‐life
and
disposal
in
the
overall
value
chain.
This
can
reduce
risks,
while
improving
sustainability
performance
of
the
company.
Although
it
can
be
quite
challenging,
transparency
needs
to
be
achieved
in
order
to
maintain
sustainable
supply
chains.
Traditionally,
a
one-­‐size
fits
all
approach
is
widely
used
in
supply
chain
management.
This
entails
risks.
Supply
chain
segmentation
is
recommended
as
the
best
means
in
dealing
with
it.

11.
Paper
topic
by
Russ
Doak
+1.604.219.6334
or
russ.doak@gmail.com
1
1
3. Conclusion
As
noted
above,
risk
and
sustainability
are
neither
separate
nor
mutually
exclusive
or
even
stand
alone
elements.
The
traditional
approach
was
to
deal
with
risk
and
sustainability
in
this
manner.
Actually,
they
are
best
worked
as
complementary
to
the
same
coin
for
gaining
maximum
value
in
the
supply
chains
of
the
future.
The
linkage
between
risk
and
sustainability
has
gained
traction
recently
through
a
number
of
studies
and
realizations
socially.
This
is
facilitated
through
a
lens
of
better
transparency
brought
on
by
new
technologies
and
improved
processes.
There
is
a
social
contract
that
companies
cannot
afford
to
ignore
and
gains
to
be
made
in
maximizing
value
for
them.
There
is
a
heightened
awareness
that
companies
are
to
be
seen
taking
action
on
social,
environmental
and
economic
issues.
In
addition,
they
are
held
accountable
for
reducing
risk
with
improved
sustainable
products
and
services.
Transparency
via
improved
process
and
new
technologies
are
an
enabler
to
take
the
complexity
out
of
large
global
supply
chains.
This
makes
the
connections
with
an
extended
depth
of
supplier’s
supplier
relationship
management,
while
creating
sustainable
value.
This
alignment
in
outlook
also
leads
to
deeper
relationships
and
engagement
between
the
buyer
and
the
supplier.
It
improves
design,
reduces
risk
and
helps
the
company
operate
more
sustainably.
Sustainability
risk
drives
the
value
chain.