Context: this post appears in a thread about specific energy initiatives that IBM could consider to begin building a consulting practice around energy efficiency and resource risk management. One of the previous posts mentioned the importance of a solid financial business case to justify these types of services. A separate post referenced IBM’s recent acquisition of MRO, and how that fact could play into management’s improved capacity to deal with rising resource expenses (my interpretation).

The acquisition of MRO is very relevant to this discussion. Thanks for bringing it up.

Supply chain risk management is one of the core business case value propositions in any sustainable management initiative. Home Depot was a pioneer in this regard with their tough experience in the redwood business. I believe this experience led directly to their relationship with the FSC people. As a result, millions of Americans have been educated about the advantages of more sustainable forestry practices.

Supply chain risk management is also relevant for other resources, such as water and energy. The organizations that demonstrate vision in these areas are bound to be better equipped to manage or possibly avoid some types of disruptive events. Consider the Cleveland/Detroit blackout of a couple years back. A company with an agressive renewable energy generation program, coupled with proactive efficiency measures, would likely have saved a lot of lost productivity during that event.

As mentioned above, these types of initiatives should be measured in terms of their impact on the bottom line. But to some extent that impact needs to be approached with an eye on precautionary risk management. It’s not enough to say that a solar panel’s return is limited to the displaced grid spend. The solar panel’s return is part of a comprehensive set of financial, environmental, and social returns to the business.

Fortunately there are already accounting frameworks that would allow IBM and your clients to demonstrate, estimate, and evaluate the environmental and social returns.[tags]IBM, Innovation Jam, sustainable supply chains[/tags]