Communicating the Value of Sustainability – Who Should Know and Why?

June 16, 2022 By Michael Ares

There is value in sustainable business. Once upon a time, companies were compelled by law to adhere to baseline environmental regulations, with only a handful of “fringe” activist organizations demanding more transparency and accountability for the environmental impact of their business activities than legally required.

Fast forward to today, where a reputation for sustainability has become one of the most sought-after assets a company can aspire to, achieve and then – ideally – leverage across their marketing and communications initiatives. From investors, banks and other sources of capital funding to employees, partners and customers, sustainability has become a core value proposition in today’s highly competitive and environmentally conscious business landscape.

Diving Deeper, Going Above and Beyond

According to Beth Davis-Sramek, Gayle Parks Forehand Professor in the Department of Supply Chain Management at Harbert, communicating the value of sustainability to an expanding base of stakeholders has been the focus of her collaboration with BBB Industries, the leading manufacturer of sustainable automotive parts and an engaging and supportive sponsor of Auburn’s Center for Supply Chain Innovation. In her sustainable supply chain management class, Dr. Davis-Sramek’s students participate in an intensive, data-driven project that culminates in a final presentation to BBB’s senior executives.

Harbert recently sat down with Dr. Davis-Sramek to discuss the real-world value of the insights delivered to BBB by this year’s teams of SCM students and why this relationship matters.

Harbert:	Let’s start with the relationship you’ve established between BBB and Harbert – the value they bring to our students and, equally important, the value your students deliver to them.
Davis-Sramek:	The executive team from BBB contacted me almost two years ago about getting our supply chain management students involved in their efforts to communicate the value of their circular business model and sustainably manufactured auto parts. By the very nature of what they do – driving value from used auto parts through remanufacturing – the company’s fundamental business model demonstrates how a company can be both profitable and environmentally responsible.
Harbert:	But they weren’t doing much to highlight any of that, right?
Davis-Sramek:	That’s correct. At that time, there was very little public information about the company’s sustainability accomplishments. The journey started when BBB’s parent company put pressure on the executive team to measure and document how remanufacturing auto parts offers environmentally responsible outcomes, especially as it relates to reducing carbon emissions. This was important to the parent company because of access to capital – the biggest players in the global finance industry have made commitments to allocate capital to companies that mitigate the environmental impact of their operations. As a result of the data-derived findings of the first student project launched in the spring of 2021, the executive team learned that BBB is a carbon neutral company. The collaboration also showcased the talent of the Harbert supply chain majors. BBB hired one of them, Theo Lamperis, as the company’s Circular Economy Business Analyst. Theo has since taken on the task of developing the company’s first formal sustainability report, which was recently released to the public.
Harbert:	You mentioned that this year’s challenge for your students was to expand upon the previous year’s student analyses to identify and address how sustainability-focused enterprises like BBB need to go beyond traditional approaches to effectively communicate the value of their sustainability commitments to a wider array of audiences that matter to the company’s long-term success. Why would communicating their sustainability efforts and accomplishments beyond the financial community be so important to BBB?
Davis-Sramek:	Sustainability has become an increasingly important factor in the choices people make today – what they buy, who they buy it from, who they work for or with, who they support in their communities, etc. While sustainability programs and initiatives start in the C-suite and extend primarily to their company’s supply chain, there are other key stakeholders – including partners, employees and customers – who are demanding to know more about how a company turns these corporate-level visions and commitments into meaningful action that impacts them.
Harbert:	Can you talk a bit about why industry leaders are embracing sustainability as both a financial performance driver as well as a social responsibility mandate?
Davis-Sramek:	It is well understood that setting and achieving targeted sustainability goals that focus on efficiency – like energy efficiency and waste reduction efforts - can lower costs and deliver significant savings to the bottom line. But savvy leaders also recognize that a strategic focus on the broader aspects of sustainability helps fulfill their responsibility to be a trusted employer, a sought-after provider of goods and services, and a respected member of the global community. To fully reap the rewards that come from the “intangible” social benefits of sustainability, however, the value of these initiatives need to be communicated to a wide – and ever widening – range of stakeholder audiences. In days past, companies could create a glossy sustainability report -- which was typically more fluff than substance – and leave it at that. But today, all companies are under mounting pressure to validate their sustainability performance and environmental footprint with data-driven metrics disclosed and updated on a regular basis. Providing the full array of company stakeholders with more transparency is fast becoming a strategic imperative.
Harbert:	It is clear that, from your perspective, the focus of the BBB/Harbert relationship is placed squarely on enhancing your SCM students’ real-world experiences of what sustainable supply chain management is all about. Can you explain how this year’s student challenge helped accomplish this?
Davis-Sramek:	Yes, and it is all about the students. This semester, the BBB project was geared towards the company’s sales team. The students were charged with developing an analysis and set of recommendations for expanding the visibility of BBB’s sustainable manufacturing to a broader audience of BBB’s retail distribution partners and end-customers. The students’ grades for the project were based on the extent to which BBB’s executives found the presentations to be applicable and meaningful.
Harbert:	So, who from BBB was there? You mentioned the sales team – why them?
Davis-Sramek:	The teams presented their analyses and recommendations to BBB’s executive sales team because they are responsible for growing BBB’s relationships with retail distributors and original equipment service (OES) providers. These BBB customers represent the largest portion of the company’s customer base. Why the sales force? For BBB to get the most leverage from their sustainability success, it requires other industry players to recognize the value of the company’s business model. As front-line representatives of the BBB brand, the company’s sales force is critical to the success of anything they do. The student teams seized upon the importance of engaging them as lynchpins to the company’s goal of driving the value of sustainability all the way down to the end customer who needs an auto part. As one senior BBB executive put it, “If we can’t convince our own sales force that sustainability can become a key customer purchasing decision, how can we expect our distribution partners to care?”
Harbert:	After reviewing the student presentations and the responses from BBB and their distribution partners, one thing that stood out was the deep dive many of the teams took into discovering the sustainability impact of BBB’s individual product lines.
Davis-Sramek:	That was one of the most satisfying take-aways for me from this year’s student presentations – the level of detail the students incorporated into their assessments of the value of individual BBB products in terms of their carbon footprint balanced against the number of each product sold, the profit margin for each and their growth projections and a product-by-product basis.
Harbert:	That sounds like important information for BBB to have when considering where to focus their investments in product development and marketing going forward.
Davis-Sramek:	Absolutely. While the BBB folks know the auto parts business inside and out, our students provide an “external” perspective that can be easily missed by those responsible for the daily business operations. I love to facilitate this project because it is real world stuff, not simply philosophical musings.
Harbert:	In closing, is there one thing you’d like to highlight about BBB’s relationship with Harbert’s Center for Supply Chain Innovation?
Davis-Sramek:	That’s a tough one, because there are so many. I’d have to say that there’s nothing that can compare to students being challenged to engage directly – in a no-holds-barred discussion – with real companies facing real-life supply chain management issues. In this global landscape, efficient and responsive supply chains become one of the most critically important parts of a thriving economy. Harbert’s supply chain majors acquire the skill set that companies want and need to compete in this increasingly complex environment. It is no surprise to hear from students that the pressure to impress corporate supply chain executives in a face-to-face presentation makes this course one of the toughest they’ve taken at Auburn – and one of the most satisfying. Who can ask for more than that?