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Practitioners Share Ideas for Upping Their Sustainability Quotient


April 2008

STANFORD GRADUATE SCHOOL OF BUSINESS —How do companies determine if they’re paying appropriate wages for products made by small artisans in developing nations?

Some businesses rely on the Fair Wage Guide, an online calculator developed by World of Good Development Organization, an Emeryville-based nonprofit promoting ethical trade practices.

Users who go to World of Good site can plug in the country where the article they’re buying has been made, how long it took to make the item, and other information. They’ll be shown artisan’s daily wage in U.S. dollars—as well as how that wage stands compared to the country’s poverty line.

The website is one way that businesses are sharing strategies on how to work together to make changes benefitting societies across the globe.

“More companies around the world are moving their supply chain and sourcing into that informal sector. There are no wage standards; they don’t exist yet. They have to evolve, and all of us can be a part of that,” said Priya Haji, chief executive and cofounder of World of Good. The sister operation buys fair-trade crafts from micro-producers in 34 countries worldwide and sells them at retailers including Whole Foods, Borders books, and through online auction giant eBay.

“We want to build a great business, but we also want to see the entire industry begin to shift,” Haji said.

Along with other social entrepreneurs, Haji spoke during a one-day conference on Socially and Environmentally Responsible Supply Chains: A Source for Innovation. The event, sponsored by the Global Supply Chain Forum, was held at Stanford Graduate School of Business on April 22.

Haji appeared on a panel with officials from two other groups that detailed how they were incorporating social and environmental responsibility efforts into their everyday businesses operations.

Through their purchasing power, government organizations are also supporting manufacturers who make products containing environmentally friendly ingredients, said Shawn Rosenmoss, senior environmental specialist with the City and County of San Francisco’s Department of the Environment. They’re often saving money in the process.

One example: Just by switching the default setting on her department’s photocopier to print double-sided, Rosenmoss said her 65-employee department alone saves between $3,000 and $5,000 a year. The organization also switched to recycled paper, a major way to spare virgin wood since city and county workers use a quarter-million sheets of paper a year.

Other initiatives expected to save money down the line include an effort to make every newly constructed or renovated city building of more than 5,000 square feet meet LEED (Leadership in Energy and Environmental Design) Silver standards. Developed by the U.S. Green Building Council nonprofit group, LEED is a strict yet voluntary environmental standard for buildings that consume less energy and water, use recycled materials and natural light, and incorporate fewer toxic paints.

“That will cost a little bit of money up front, but ultimately we will get that back in energy savings and our employees’ delight at being in fabulous buildings,” said Rosenmoss.

Next, they’re looking to produce more biodiesel fuel to power the city’s fleet of diesel vehicles and construction equipment. The City of San Francisco was recently recognized by the Environmental Protection Agency after opening its first biodiesel fueling station. Partially funded with federal money and located in the city’s Bayview Hunters Point neighborhood, the facility processes discarded restaurant fats, oils, and grease into biofuel. “A lot of people want to use biodiesel, but don’t want any made from corn grown in the Midwest,” she said. “They want to use locally manufactured biodiesel.” The facility is also open to residents and commercial representatives to use.

Portland-based retailer Nau is focused on treating both employees and suppliers ethically, said Adrienne Moser, chief operation officer of the three-year-old maker of hip outdoor clothing assembled from organic cotton, recyclable polyesters, and low-toxic dyes. Buyers can recycle Nau’s polyester jackets at the end of wear.

All the retailer’s employees are paid at least one-and-a-half times the minimum wage, Moser said, while the highest-paid worker can’t make more than 12 times the salary of the lowest-paid employee.

Five percent of revenue is donated to nonprofit groups; last year, they gave away $250,000.

They believe they can spark industry-wide change.

“We want to change the partnership between the business and nonprofit industry,” said Moser. “We want them to work collaboratively and collectively.”

—Michele Chandler