Dassault x Amazon: the best and the worst sustainable company
- Sep 26, 2018
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Every year, Corporate Knights publishes a report that ranks the most sustainable companies in the world. This year, Dassault Systèmes topped the list. The company, based in France, produces product lifecycle management (PLM) software, which provides companies with 3D applications capable of transforming the way goods are designed, produced and maintained.
Corporate Knights uses publicly released data - financial records, sustainability reports, and related information - to produce the survey. The main factors of analysis are the use of energy, carbon, waste and production of clean air.
The remuneration of the leaders, the suppliers with whom the companies work, the pension fund situation, safety classifications, employee turnover, innovation expenses, taxes paid, diversity in leadership and the link between sustainability goals and the salary of senior executives. This year, the entity added a new category - a focus on the proportion of a company's revenue that comes from environmentally beneficial services or products. Without this change in score, Dassault would not have won.
In fact, all forms of supply chain software support sustainability, with transportation management systems and supply chain design solutions that are even more environmentally friendly than product lifecycle management. The companies that Corporate Knight believes have a minimum revenue of $ 1 billion. Most companies in the same segment of Dassault do not reach this level.
On the other hand, there is no list of the worst organizations in terms of sustainability. One of the reasons is that finding out how bad a company is often requires it to prepare a report on its sustainable performance - and of course the worst companies do not.
But my vote - completely subjective - for the world's least sustainable company goes to Amazon. Logistics produces large amounts of greenhouse gases. E-commerce is essentially less environmentally friendly than traditional brick-and-mortar supply chains, for example, and contributes to higher transport emissions than traditional retail. This is because, instead of having pallets of goods delivered in large consignments to the stores, small parcels are sent directly to consumers. And often part of this journey is through the air. Deliveries made only by trucks are greener than air - air is the least sustainable of all modes of transportation. And Amazon did more to boost e-commerce than any other company in the world.
It can be argued, however, that Amazon can not be blamed for this. They are consumers who demand instant gratification and drive massive growth in customer satisfaction and delivery.
Also, consider companies in the coal, oil and gas and chemical industries. Do not these sectors have even greater negative impacts on the environment than transport?
At this point, it is important to emphasize intentions. The chemical industry, for example, as well as e-commerce, produces goods that are needed by global companies and consumers. However, it is still possible to supply these goods with a supply chain project aimed at reducing the adverse impacts in the world. BASF, the world's largest chemical company, has a smartly built supply chain where the by-products of one operation are converted into starting materials from another operation. They call it Verbund.
One of the leading analytical firms produces an annual list of companies with the best supply chains. Amazon used to be listed as number 1, but now it's not even ranked. That's because this research institution has added a category of sustainable development - and the business led by Jeff Bezos does not produce a sustainability report.
Amazon has also been criticized negatively over how its deposit employees are treated and the earnings disparity between CEO Jeff Bezos, the world's richest man, and the armies of employees working in their electronic call centers.
In 2014, Amazon finally named an executive responsible for sustainability. With this, advances have been made in the areas of waste reduction of packaging and investments in wind farms. However, it is in transportation that the e-commerce giant creates the greatest negative impacts on the environment. And almost nothing has been accomplished in this aspect. Amazon recently bought 20,000 vans to make deliveries, all driven by internal combustion engines - that is, there is not a single electric vehicle.
Sustainability is defined in several ways. As a supply chain professional, I analyze this through a lens. It is satisfying that a software company like Dassault has been considered the world's best in sustainable development. But it is unpardonable that Amazon - the company with the world's most innovative supply chain - places so little emphasis on work to mitigate greenhouse gas emissions throughout the logistics.