Over the last two years, a growing trend has multiplied, resulting in increased awareness for consumers, suppliers, investors, and those who facilitate the transfer of goods: Social responsibility. Or, more broadly, environmental, social, and governance (ESG). And now, more than ever, the supply chain is factoring in—not only when it comes to satisfying consumer demand, but also regarding product returns.
Recently, the Reverse Logistics Association (RLA) explored this very topic in a webinar titled, “Why Using Nonprofits for Returns Management is Socially Responsible.” The webinar featured moderator, Tony Sciarrota, Executive Director and Publisher of RL Magazine, and three expert panelists: Claudia Freed, President and CEO of EALGreen; Travis Laws, President of WIN Warehouse; and Bob Anderson, Business Development Executive for PRIDE Industries.
The discussion was one of depth and breadth; however, ESG dominated the conversation—notably transparency in the return process as well as re-use and environmentally ethical disposal of goods. Further underscored was an increasing shift in consumer awareness when it comes to requiring companies to be socially and environmentally responsible—an expectation that includes the entire supply chain. And to satisfy these expectations, companies are requiring their suppliers and transporters to have some kind of ESG framework in place.
“Almost every RFP or RFI that comes out now has some questions about what you do about sustainability,” said Bob Anderson of PRIDE Industries. “Also, what you do about people and your hiring practices.”
A 2021 McKinsey report supports Anderson’s observation. Referencing this report, a recent Forbes article summarizes that “two-thirds of an organization’s ESG commitments lie with its suppliers.” The article further notes “. . . choosing the right supplier partners and managing them well is perhaps the most impactful decision for a company when it comes to sustainability.”
In the webinar, Claudia Freed of EAL Green notes, “. . . transparency has now become an organizing principle . . . a nonprofit helps generate that value proposition.” She goes on to explain that, unlike a traditional corporation, a nonprofit must disclose its tax returns which, for example, reveal the highest-earning employees’ salaries. This requirement speaks to the “social” element of ESG, allowing stakeholders to discern the level of “pay equity” an organization cultivates.
Unfortunately, the benefits of using nonprofits for supply-chain needs aren’t yet on many companies’ radar. But the webinar’s panelists see that changing.
“The concept has evolved, from a charity that would go out with its hand” [out . . . to] “shaking hands . . . being a partner,” Freed, of ELAGreen, pointed out, underscoring the fact that nonprofits can, increasingly, offer the same business advantages to customers that traditional corporations do—while also offering tax breaks and a positive social impact.
“It’s a matter of awareness,” said Anderson, mentioning that a tech giant has relied on PRIDE Industries’ kitting and packaging services for 15 years—the kind of partnership many potential customers don’t yet associate with a nonprofit.