Article Highlight: Sustainability, Investment Recovery and Supply Chain

In the article “How the Social Supply Chain Powers Responsible Investment Recovery”, published in the Asset 2.0 magazine of the Investment Recovery Association, Julie Urlaub offered a very interesting overview of the role played by investment recovery in the sustainability strategy. Julie Urlaub is the Founder and Managing Partner of Taiga Company (http://taigacompany.com/), which specializes in social media and sustainability consulting. We would like to highlight 3 key points of her article. The quotes in this post are all from Julie Urlaub.

Supply Chain, Investment Recovery, Sustainability1) Sustainability: it should be in every corner of your business

Sustainability is everywhere, even though you may not call it this way. Indeed, a company that has adopted responsible sourcing methods, played a role in environmental stewardship and optimized the efficiency of every department has already entered the sustainability world.

“Executives from all facets of the organization are finding reasons to care about sustainability.”

Being sustainable is becoming a real corporate concern, and sometimes a boost effect. It is difficult to shape a business strategy without taking it into account. Remember the numerous scandals about PCB-leaking equipment sent to the landfills, or sourcing toxic raw materials. These companies’ brand and reputation are still paying the price of ignoring the other side of their business strategy.

According to Julie Urlaub, sustainability answers several matters:

  • Regulatory compliance
  • Environmental stewardship
  • Transparency
  • Pollution and water risk
  • Corporate reputation

2) Investment Recovery and Sustainability: a discreet but natural link

Investment recovery, also called surplus asset management or disposition management is not new. Yes, Michael Porter did not integrate it in its Value Chain Analysis. But we can see investment recovery as the hidden part of the supply chain and a pillar in business sustainability.

For a reminder, investment recovery can be defined as the practice of recovering the highest value of assets no longer needed by a company. Recovering can be referred to the different ways a company can efficiently dispose of its idle or obsolete items. Here are some of them:

  • Redeploying: reusing these items within another branch of the company
  • Reconditioning: refurnishing them in a like-new condition
  • Returning to the manufacturer or the vendor of this equipment
  • Reselling to buyers
  • Recycling: the items can be scrapped and sent back to the raw material streams

Investment Recovery naturally meets 3 main pillars of sustainability: Economic development, Social responsibility and Environmental stewardship.

“By pairing investment recovery with corporate sustainability, you will elevate the IR function in your organization.”

3) Bringing investment recovery and sustainability to the next level: supplier collaboration

Disposing of surplus assets, in the frame of an investment recovery program, means maximizing the financial return, and knowing what happens to these obsolete assets.

“IR professional have an opportunity (and responsibility) to connect the dots between investment recovery and sustainability to make it visible to stakeholders.”

Julie Urlaub sees collaboration among suppliers as the next step in better business practices. Adopting an overall approach of the supply chain and implementing a solid sustainable policy allows companies to mitigate risks. Purely focusing on costs works on the short-term, but significantly increases corporate risks in the long-run.

Collaboration among companies and suppliers helps make the supply chain “more responsible, resilient and efficient”. The number of procurement groups and trade associations is consistently increasing, showing that collaborating impacts the sourcing process. Availability, better prices and knowledge sharing are some of the advantages.

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