Creating competitive advantage through resource productivity, eco-efficiency, and sustainability in the supply chain

Abstract

Although there is increasing interest in the business potential of sustainable development, there is no consensus, agreed upon context, or "environmental metric" on how to measure progress. This paper proposes such a metric and demonstrates its link to supply chain effectiveness and competitive advantage. EcoPro, The Universal Environmental Metric, allows changes in the various types of environmental aspects to be evaluated together in relation to progress toward sustainability. It allows the concepts of resource productivity and eco-efficiency to be quantified in a convenient and meaningful way through the resource productivity indicator RP and the eco-efficiency index EE. These can be used as both leading (predictive) and lagging (evaluative) indicators of environmental performance. EcoPro balances environmental impact with economic output, provides a practical, quantitative criteria for sustainability (EE/spl ges/1), and demonstrates that the terms eco-efficiency and sustainability are synonymous. EcoPro utilizes and extends the methodology and terminology of the Environmental Management System approach now being widely implemented, e.g., ISO 14001, and addresses the guidance found in ISO 14031 on selecting environmental performance evaluation indicators and in ISO 14041 for life cycle analysis. Preliminary calculations on different Lucent product lines have provided insights into where environmental investments should be focused to achieve the highest return on investment and risk reduction.