Daniel Ross Perry

Startup founder and board & C-suite advisor helping teams use AI to cut supply chain risk and boost sustainability. Practical playbooks for culture change and measurable ROI.

  • The Doorman Fallacy: What Organizations Get Wrong About Value
    A welcome doormat with tire tracks crossing it — illustrating the Doorman Fallacy

    The price we all pay when a spreadsheet is at the wheel.

    Picture a fancy New York hotel — the kind you’d see in a Christmas movie. Now ask yourself: when is the last time you actually encountered a doorman?

    Doormen, once a fixture of high-end hospitality, have been systematically replaced by automated sliding doors. On a spreadsheet, the logic is airtight. A sensor and a motor cost less than a salary. The door still opens. Problem solved.

    Except the door was never the point.

    The Doorman Fallacy

    Marketing strategist Rory Sutherland, Vice Chairman of Ogilvy, calls this the Doorman Fallacy. Strip a doorman’s role down to its single measurable function — opening a door — replace it with automation, and record the savings. The spreadsheet shows a win.

    What disappears from the spreadsheet: the security the doorman provided, the recognition of returning guests, the subtle signal that you are not just expected, you are welcome. Strip that out and you don’t just lose a doorman. You lose consistent-paying regulars, your rack rates fall, and five years later you’re sitting on an unprofitable piece of real estate.

    As Deming put it: “It is wrong to suppose that if you can’t measure it, you can’t manage it — a costly myth.”

    Sutherland argues that the same logic is now being applied to AI. The easiest way to justify an AI investment is headcount reduction. So that’s how it’s being sold — not as a tool for generating new value, but as a tool for cutting existing cost. The first phase: “Same as before, but cheaper.”

    The Alchemist vs. The Accountant

    For the past decade, the Chief Sustainability Officer operated as a strategic alchemist. Their mandate was to find the intersections where social impact and long-term business value collided — proving that doing better and growing faster were not in conflict. At its best, the annual sustainability report attracted high-conviction capital, restless talent, and partners who wanted to build something lasting.

    In 2026, the Alchemist has been replaced by the Accountant.

    By moving sustainability under the CFO, the brief has narrowed from “How do we change the world?” to “How do we avoid a fine?” The goal is no longer to be bold — it’s to be invisible. Report accurately against mandatory frameworks. Don’t miss a deadline. Don’t expose the company to regulatory risk.

    The result is “green-hushing”: the corporate equivalent of Schrödinger’s ESG. The company might be doing something good, but it’s too terrified of putting a foot wrong with the regulators to tell anyone about it.

    This restructure is entirely defensible on paper. Mandatory reporting is real, and putting a finance professional in charge of compliance risk makes sense. But this is the Doorman Fallacy applied to the soul of the company. Just as a sensor can technically open a door, a compliance officer can technically manage sustainability. What you lose — and what never appears on the same spreadsheet — is the accumulated erosion of the intangible. You’ve traded a magnet for talent and a driver of innovation for a defensive shield. You’ve managed the risk, but in doing so, you’ve quietly strangled the reward.

    A Formula for Failure

    If you need a more visceral illustration of the Doorman Fallacy in action, look no further than Aston Martin’s 2026 Formula One season.

    F1’s 2026 regulation cycle introduced the most radical power unit change in a generation — a shift from an 80/20 ICE/hybrid split to 50/50. Aston Martin owner Lawrence Stroll saw this as an opportunity. He acquired Adrian Newey — the greatest aerodynamicist in the history of the sport — and gave him the keys to the entire operation, appointing him Team Principal.

    The results have been catastrophic.

    The car arrived at testing requiring immediate, extensive modifications. The Honda power unit produces vibrations so severe they’re damaging components and causing nerve pain in the drivers. The team accumulated less than half the mileage of top competitors in early testing. Newey has publicly blamed everyone else — Aston Martin for not hiring him sooner, Honda for not staffing the project with his preferred engineers.

    The lesson is sharp: Newey’s genius is real and measurable. His track record is extraordinary. But leading 800 stressed humans, managing critical partnerships, and navigating intense media scrutiny during a technical crisis doesn’t show up on a résumé or a CAD blueprint. Stroll hired the world’s most advanced automatic door and asked it to act as the hotel doorman.

    What This Means for Your Organisation

    The tragedy of the “high IQ, low EQ” organisation is that it believes it is being rigorous when it is actually being lazy. It is far easier to measure the cost of a person than the value of their presence.

    The antidote isn’t to abandon measurement. It’s to invest equally in what Sutherland calls the Unmeasurable Multipliers:

    The Power of the Symbolic. Doing things that don’t “scale” — precisely because they signal to customers and teams that you care about more than just the bottom line.

    The ROI of the Irrational. Investing in “psychological moonshots” — the doorman, the charismatic leader, the bold sustainability goal — that create a halo effect far beyond their functional utility.

    The Human Edge. In an AI-driven world, “average” is now free. Anything standard, logical, or fully optimised carries zero competitive advantage. Value lives exclusively in the outliers — in the things only a human would be bold enough to attempt.

    The doorman didn’t just open a door. He signalled that the building was worth entering.

    Perhaps we should stop asking “What does this cost?” and start asking “What does this mean?”

    In 2026, the most successful organisations won’t be the ones with the best spreadsheets. They’ll be the ones who remembered that business is, was, and always will be, a social science — not a branch of physics.

  • The ESG Pincer: Why Carbon Reporting Is Coming for US Manufacturers
    A political cartoon illustrating the dual pressure of state and federal carbon reporting on US manufacturers. On the left, a large bear in overalls representing California (standing in front of a map of the state) holds a sign saying "SB253." On the right, Uncle Sam (standing in front of a map of the US) holds a sign saying "PROVE IT!" Both figures point aggressively at a small, confused industrial worker in the center. A speech bubble from the worker reads, "Wait... now you BOTH want carbon data??" In the background, a factory emits smoke.

    If you’re a US manufacturer who breathed a sigh of relief over federal climate rollbacks, you’re currently standing in the centre of a strategic pincer movement — and you may not have noticed yet.

    While the “hardware” of international climate treaties is being dismantled in Washington, the “software” of global economic reality is tightening its grip from two directions at once. One jaw is closing from the left coast. The other from the capital itself.

    The Left Jaw: California’s SB 253

    The California Air Resources Board is moving forward with SB 253 — the Climate Corporate Data Accountability Act. Under this law, any company doing business in California with over $1 billion in annual revenue must publicly disclose their Scope 1, 2, and 3 emissions.

    Here’s the supply chain implication that most manufacturers are missing: almost every major US enterprise — your customers — does business in California. That means their Sustainability Officers are now legally required to demand your emissions data. Not as a favour, not as a preference. As a condition of their own regulatory compliance.

    Your Scope 3 numbers aren’t optional anymore. They’re your customers’ legal obligation to collect.

    The Right Jaw: The PROVE IT Act

    The Producing Responsible and Optimal Energy for Industry and Technology Act — the PROVE IT Act — has cleared the Senate with bipartisan support and been weaponised by the US Department of Energy as a trade instrument.

    The logic is straightforward: the DOE is benchmarking the carbon intensity of US industrial production versus foreign competitors. The intent is to give US procurement officers a federal standard for preferring “competitively clean” domestic suppliers over high-risk foreign ones.

    This isn’t a moral mandate. It’s a trade shield dressed up in sustainability language. Your Procurement customers won’t be selecting you because you’re virtuous — they’ll be selecting you because you’re defensible. And “defensible” now requires verified emissions data.

    The Compliance side wants your data for the lawyers. The Competitiveness side wants your data for the sales team.

    What This Means for Your Supply Chain

    The era of “don’t ask, don’t tell” carbon accounting is over — not because the federal government mandated it, but because the market infrastructure around it has hardened in ways that can’t be rolled back by executive order.

    The practical implications for manufacturers are sharp:

    Your biggest customers are already exposed. If they operate in California, they need your numbers. If they can’t get them from you, they’ll find a supplier who can provide them — or they’ll estimate your footprint unfavourably and price in the risk.

    The PROVE IT Act creates a new selection criterion. Federal procurement benchmarks don’t disappear when administrations change. The data infrastructure being built now will outlast the political cycle that created it.

    Credible data is the new hard power. As I noted in my recent analysis of the 2026 SDG performance rankings: raw force is a terrible long-term investment. The compound interest of consistent, verifiable data beats the brute force of regulatory avoidance every time.

    The rollback isn’t coming for the markets that matter. The question isn’t whether to prepare — it’s how quickly you can turn your emissions data from a liability into a competitive asset.

  • SDGs at 10: The Exponential Rupture — What the Response Taught Me
    National flags representing the 50 economies ranked in the 2026 SDG Global Performance Matrix

    I’ve been humbled by the response to the 2026 SDG Global Performance report. It’s reached some sharp people, and the feedback has already forced several important additions and rewrites to the original analysis.

    One perspective in particular has stayed with me.

    The Azeem Azhar Connection

    An old friend with significant experience in international politics pointed me toward a piece by Global Futurist Azeem Azhar: “The End of the Fictions.” The synergy with the SDG analysis turned out to be more than coincidental.

    Where I had been focused on the geopolitical rupture — the “shove” replacing the “nudge,” raw force displacing institutional coordination — Azhar has been examining the technological rupture happening in parallel. His argument: the core “fictions” that underpinned the global trade order are dissolving under the pressure of the Exponential Age.

    These fictions include traditional sovereignty as a fixed boundary, scarcity-based economics as a stable foundation, and legacy work models as the primary unit of economic production. Each is being simultaneously undermined by the same technological forces — AI, renewable energy economics, and networked production — that the SDG “Visionary” nations are quietly building infrastructure around.

    The Software/Hardware Paradox, Sharpened

    The feedback has clarified something I had intuited but not fully articulated in the original report.

    The countries sitting in the “Leader” and “Visionary” quadrants of the performance matrix aren’t just checking SDG compliance boxes. They are actively rewriting their social and economic “software” — their institutional frameworks, investment priorities, and trade standards — to function in a world where the old fictions no longer apply.

    The US-China divergence makes this stark. One is defending the “Hardware” of the existing order through raw force: tariffs, territorial assertions, withdrawal from multilateral bodies. The other is building the “Software” of a new engineering-led state apparatus — manufacturing subsidies, renewable deployment at scale, and AI infrastructure investment — designed to operate within the post-fiction world rather than resist it.

    As Prime Minister Mark Carney put it at Davos: we are not in a transition anymore. We are in a phase change. The countries and companies that recognise this distinction are the ones compounding advantage. The ones waiting for a return to the old order are accumulating exposure.

    What Comes Next

    I’m excited to be working with Gil Friend — sustainability strategist, CxO coach, and one of the original architects of corporate sustainability practice — on the next iteration of this report. The goal is to move from diagnosis to prescription: what does “radical pragmatism” actually look like as an operational strategy for mid-market and enterprise businesses navigating this rupture?

    The original SDG report, with all updates and references, is linked in the comments of the original post. If you’ve reached out privately to pressure-test the framework — thank you. That pressure has made it better.

    More to come.

  • SDGs at 10: Why the World Is Failing the Ultimate Nudge
    National flags representing the 50 economies ranked in the 2026 SDG Global Performance Matrix

    In 2015, I walked away from the world of procurement SaaS to help a French sustainability software startup crack the US market. By coincidence, it was the same year the United Nations launched the Sustainable Development Goals.

    At the time, the SDGs felt like a masterpiece of choice architecture. The UN had taken 17 existential threats and turned them into colourful, manageable tiles — the ultimate “nudge” to align global business with planetary survival. By 2017, I found myself at the UN hosting a panel on how businesses and supply chains can translate these aspirations into day-to-day operations.

    Fast forward to January 2026. The nudge became a shove, and the coordination has frayed.

    How to Read the 2026 SDG Performance Matrix

    The 2026 SDG Global Performance Matrix ranks 50 economies across two dimensions:

    Y-Axis — SDG Achievement (the “Hardware”): A country’s cumulative score across all 17 goals. This reflects legacy assets, wealth, and established infrastructure.

    X-Axis — Institutional Momentum (the “Software”): A three-year trajectory reflecting commitment to multilateralism, trade positioning, and future-readiness.

    The matrix reveals that we are not suffering from a lack of data. We are witnessing a fundamental shift in what drives economic competitiveness.

    SDG Global Performance Magic Quadrant 2026 — plotting nations by SDG achievement score versus institutional momentum

    Leaders: Consistency as a Strategic Asset

    A small group of countries demonstrates that institutional continuity is now a source of competitive trade positioning — not just a moral position.

    The Nordic bloc — Finland, Sweden, and Denmark — leads by stepping in to fill the $4B+ funding gaps left by withdrawing nations. For businesses, these nations now offer a distinct cost-of-capital advantage; they represent the only remaining stable defaults for global investors fleeing uncertainty elsewhere.

    The European core — Germany and France — has doubled down on green industrial policy as a defensive economic strategy. This isn’t altruism. It’s energy independence and supply chain security in a fractured world.

    Vietnam is the breakout performer of the decade. Its aggressive renewable deployment has allowed it to leapfrog legacy infrastructure constraints, proving that momentum is not the exclusive domain of wealthy nations.

    Challengers: The High Cost of Drift

    The top-left quadrant is where nations with high baseline capacity are losing direction fastest.

    The United States remains high on achievement due to its sheer economic scale and historical R&D investment. But it sits firmly in the Challenger quadrant — and the trajectory is accelerating downward. By withdrawing from 60+ international bodies, the US has introduced a “standardisation vacuum” that makes its high achievement scores increasingly fragile. The practical result for multinational procurement teams: a growing risk premium on US-based supplier relationships and an erosion of the trade standards the US historically helped set.

    The UK and Japan are caught in the cross-currents of trade uncertainty, where alignment with global goals is increasingly viewed through a lens of economic risk rather than strategic opportunity.

    Visionaries: Momentum Without Legacy

    India and Vietnam are using SDG alignment as a deliberate trade-positioning strategy — building the digital and green infrastructure of tomorrow without the institutional complexity of the West. Capital fleeing the Challenger nations is landing here.

    The Gulf States — the UAE and Saudi Arabia — are leveraging sovereign wealth funds to pivot toward green energy at a pace that most nations cannot match. The persistent friction: a Social Deficit around labour rights and civil liberties that prevents their world-class physical infrastructure from reaching full integration with the Leader quadrant.

    What This Means for Your Organisation

    The SDG framework was never just a UN project. For procurement and supply chain leaders, it was always the most comprehensive map of systemic risk ever published.

    In 2026, the businesses that will compound their advantage are those treating SDG alignment as a hard competitiveness signal — not a compliance checkbox. Here’s the practical read:

    Supplier geography is geopolitical strategy. The Challenger nations are generating new procurement risk. Supplier diversification toward Leader and Visionary economies is no longer idealism — it’s risk management.

    Consistency is the new competitive moat. In a world where the rules are being rewritten, the organisations that have maintained coherent sustainability commitments across the last decade now have a decade’s worth of trusted partnerships, better financing terms, and lower regulatory exposure.

    Radical pragmatism over perfect consensus. As former Bank of England Governor Mark Carney put it at Davos: “Nostalgia is not a strategy.” The winning approach is not to wait for a return to the old multilateral order, but to build coalitions and co-invest in resilience now.

    The SDGs remain the best brief we’ve ever been given. In 2026, the winners won’t be the ones with the most raw force — they’ll be the ones with the institutional software to survive a fractured world.


    Methodology: Achievement scores based on the 2025 Sustainable Development Report and SDG Index (dashboards.sdgindex.org). Financial tracking via the UN Financial Tracking Service and Focus 2030. Geopolitical risk data synthesised from the International Crisis Group and the UN Human Rights Council.

  • Most AI projects die deep in the org chart.

    I just came out of the AI Innovators panel at INSEAD’s AI Forum Americas in San Francisco. The message from the stage was clear: The barrier to AI adoption isn’t technology. It’s management.

    On stage were:

    Gemma Garriga (VP Engineering, GitHub)

    Sebastian Bak (Global Co-Lead for AI, BCG X)

    Stephane Kasriel (VP FAIR Foundations, Meta FAIR)

    All three said it in their own way: the models are ready. The math is cheap. The problem is us.


    1. Most budgets are backwards

    Sebastian didn’t mince words: “Budget 30% for development and 70% for change management.”

    That’s the opposite of how most executives spend today. We still treat AI as an IT project when it’s actually an organizational transformation. Training, incentives, redesigning workflows — this is where adoption lives or dies. Ignore it, and your AI pilot ends up as another shelfware slide deck.

    Article content
    Most companies focus too heavily on building internal AI-powered tools, without considering the change management resources needed to ensure a successful implementation.

    2. CFOs don’t care about your demo

    The finance test is simple: show gains in the group that actually adopted your solution. Not promises. Not a POC. Cash in the bank.

    If you can’t prove impact at the cohort level, you don’t have a business case — you have theater.


    3. Move fast and DON’T break things

    Gemma’s reminder: building fast is easy, integrating well is hard. AI projects crash when they move from prototype to production. The fix is discipline: break work into small tasks, measure what the AI touched, track how long it takes code to move from pull request to production. Ship small. Prove safe. Scale.


    4. Quick wins and moonshots must coexist

    Stephane compared AI to pharma: many bets, many failures, huge costs. The CFO wants a 90-day deliverable that proves value. The board wants a moonshot that reimagines the company in an AI-first world. You need both. Quick wins earn credibility. Moonshots earn the future.


    5. Managers need a new job description

    Hierarchies slow everything down. In an age of agentic AI, the manager role shifts. Less traffic cop, more architect. Their job: set guardrails, define success metrics, and remove blockers. Not “what did you do this week” but “what did the system learn and ship.”

    Article content
    AI thrives in flat teams. Hierarchies slow adoption, whereas architects and orchestrators speed it up.

    6. Costs are collapsing, but value is elsewhere

    The cost of running last year’s top model has already dropped by orders of magnitude. That’s not where the margin is. Value accrues at the solution layer — the companies solving painful, specific problems that users will pay for today. Infrastructure will be cheap. Adoption will not.


    Takeaway

    Most AI projects don’t fail in the lab. They fail in the org chart.

    If you want to win with AI:

    • Pick one workflow that matters.

    • Prove adoption and cash impact in 90 days.

    • Fund change management like you mean it.

    • Run one moonshot in parallel.

    • Redefine management around learning, not reporting.

    The model race makes headlines. The culture race decides who survives.


    About the Author:

    Daniel Perry is a Silicon Valley-based start-up founder — and advisor to investors, boards & CEOs — connecting sustainability, technology & impact.

  • “One day the country could have a digital minister and even an AI prime minister” Edi Rama, Prime Minister of Albania

    Albania just made history. It has appointed Diella, an AI‐created virtual minister, to oversee public procurement, a sector that has allegedly been long-accused of corruption and inefficiency.

    What are the implications for procurement professionals, and how might this model spread to other bureaucratic roles?

    What Diella tells us about procurement’s future

    1. Objectivity & Transparency as Competitive Advantage – By shifting tender evaluations to AI, Albania aims to remove human bias, graft, and conflict of interest. For procurement professionals, this raises the bar: transparency isn’t optional. The value of clean data, well‐documented process, auditability will increasingly define who wins or loses — whether in government or private sector contracts.
    2. Human Oversight Still Is, or Must Be, Critical – Diella isn’t (publicly at least) fully autonomous: questions remain about oversight, manipulation, legal liability.  For procurement leaders, the takeaway is that AI can handle many procedural tasks, but designing how humans remain in the loop, how biases in training data are addressed, how exceptions are managed will be key responsibilities.
    3. Procurement Becomes More Data‐Centric and Technical – Tender evaluation, risk scoring, supplier vetting, contract compliance — these will increasingly rely on algorithms, metrics, dashboards. Procurement professionals will need more fluency in data science, AI governance, process engineering. The role shifts away from paper chasing & negotiation toward strategy, oversight, and design of AI‐mediated systems.
    4. Ethics, Trust & Reputation as Core Capabilities – The biggest risk may not be a technical failure, but rather, a loss of public trust. If an AI “minister” makes decisions that seem opaque, unfair, or wrong, the blowback could be severe. Procurement pros who build systems must embed ethical guardrails, fairness, explainability in their processes.

    Extrapolating into Other Bureaucratic Roles

    Article content
    How this paradigm might map onto other functions.

    What This Means for Procurement Professionals Right Now

    • Start experimenting with small, auditable, rule-based AI systems in your workflows (vendor scoring, supplier risk, contract compliance) so you understand strengths & pitfalls.
    • Build or sharpen skills in AI governance: fairness, explainability, bias mitigation.
    • Push for transparency: traceable decision logs, ability to contest AI decisions.
    • Engage legal/regulatory teams early: what are the boundaries of delegating authority to AI? What is the liability?
    • Cultivate stakeholder trust: employees, suppliers, customers all need to understand the “why” and “how” of AI decisions. Clear communication + good code.

    Final Thought

    Diella shows that traditionally slow-to-move organizations, like governments, are willing to hand over complex, rules-based processes to machines. The real work for professionals is deciding how much trust to place in those systems, and where human judgment still needs to apply.

    For procurement professionals, that signal should stir both alarm and opportunity. Alarm, because the rules of procurement are being rewritten. Opportunity, because those who master these emerging rules — governance, transparency, data ethics, human-in-the-loop oversight — will set the standard.

    For EHS and sustainability professionals, the opportunity is even larger. These are fields where data quality and reporting accuracy can mean the difference between regulatory approval or penalty, safe operations or an accident, credibility or greenwashing.

    As AI takes on roles once thought uniquely human, our value will lie less in simply “doing our job” and more in ensuring that when AI does it, it does it better.


    About the Author:

    Daniel Perry is a Silicon Valley-based start-up founder — and advisor to investors, boards & CEOs — connecting sustainability, technology & impact.

  • This is a repost from March 7, 2019. Original article available here.

    EcoVadis Releases UN Global Compact Performance Report

    Study finds that organizations that have committed to the UNGC’s ten principles perform significantly better on sustainability measures throughout supply chains

    PARIS and NEW YORK — (March 6, 2019) — EcoVadis, the world’s most trusted provider of business sustainability ratings, has published a new report on sustainability performance comparisons between organizations who have committed to the UN Global Compact principles vs. those that have not. Taking a deep dive into performance across key themes of Environment, Labor and Human Rights, Business Ethics and Sustainable Procurement, EcoVadis found that committed companies perform better across their supply chains. 

    “We assess nearly 20,000 companies a year on their sustainability performance and this report specifically explores the link between the adoption of the Ten Principles of the UN Global Compact and advanced sustainability performance,” said Sylvain Guyoton, SVP of Research at EcoVadis. “We found encouraging evidence that companies who adopted the UN Global Compact Principles are stepping up to the challenge — mitigating CSR risks within their operations and moving the needle to a more sustainable future.”

    The report’s major takeaway:

    • Companies committed to the UN Global Compact principles have on average better sustainability performance: The findings demonstrate a clear correlation between advanced CSR performance and UN Global Compact participation. That said, participation in the UN Global Compact does not lead to advanced CSR performance in and of itself;
    • Among UN Global Compact participants, small and medium-sized companies demonstrate better performance compared to large ones. This may be due to the fact that small- and medium-sized companies can act faster when addressing CSR issues.
    • Companies perform significantly better in labor & human rights and environmental themes, compared with the ethics and sustainable procurement themes.
    • Sustainable Procurement and environment themes have the greatest gaps between UN Global Compact participants and nonparticipants. This gap may be linked to the need for explicit executive level commitment to make investment in environmental and sustainable procurement programs. Such commitment is a clear and deliberate part in UN Global Compact participation, and thus explains the higher performance of UN Global Compact participants.

    “We must achieve the Sustainable Development Goals — for our own sake and for future generations,” said the CEO and & Executive Director of the UN Global Compact Lise Kingo. “More and more businesses are supporting the Global Goals, and now we must drive for the tipping points that will make sustainability a mainstream reality for small and large businesses everywhere. It is encouraging to see that our Ten Principles on human rights, labor, environment and anti-corruption are helping companies to improve their sustainability performance.”

    To learn more about the UN Global Compact and their various signatories, download the full report.

    Full press release with press contact information.

  • This is a repost from November 28, 2017. Original article available here.

    On November 20, 2017, New Windsor authorities say two explosions and a fire at a contract manufacturer in the Hudson Valley about an hour north of New York City left multiple people injured, including firefighters caught in the second blast. As of November 21, the tally was one man dead and 125 hurt after the deadly explosions.

    Working in the sustainable procurement field, I try not to focus too heavily on sharing these horror stories. In fact, one of my favourite supplier sustainability stories revolves around another New York state contract manufacturer in the consumer goods space that avoided any such catastrophe, going from “Zero to Hero” in terms of their Environmental Health and Safety in a few short years. As I write this post from my company’s New York office, however, the avoidability of this tragedy and needless loss of life strikes frustratingly close to home and I feel compelled to share my views on this horrific disaster. When I first heard of this event, the questions that sprung to mind were:

    1) Were any of the Supplier’s B2B customers aware of the level of risk to the factory workers?

    2) If not, why not?

    3) If so, why didn’t they act?

    This event was brought to my attention because the company I work for, EcoVadis, provides corporate social responsibility ratings and monitoring of legal entities (most often ‘Suppliers’) on their environmental, social, ethics and supply-chain performance. In other words, EcoVadis could have picked up some of this particular plant’s gaps in management systems, or at bare minimum, the supplier’s 19 OSHA violations, had a client requested it.

    “This tragedy could have been avoided, if only one of their B2B customers had used EcoVadis…”

    Upon learning of the explosion and resulting fire, my first instinct was to share a quick one sentence post or tweet, with a link to the article, saying something like, “This tragedy could have been avoided, if only one of their B2B customers had used EcoVadis…”, but an opportunistic plug for my employer would have been missing the point entirely… Assessments don’t save lives, action does… While an EcoVadis assessment could have told the Supplier (and their B2B customer) what the problems were and what the Supplier could have done to improve, in the case of this particular Supplier, they were already well aware of what the problems were (19 OSHA violations and fines of totalling $60,421 are a testament to this). Ultimately the risk/reward was such that, for whatever reason, the Supplier chose not to act. Saving lives requires action, and if there was anyone who could have saved lives in this scenario, it was their B2B customers. $60k in fines may not have moved the needle with this Supplier, but I bet millions of dollars in potential lost revenue could have.

    So where is Procurement in this tragedy? Did they have the resources at their disposal to drive tangible improvement in working conditions and yet choose not to use them? What would have been Procurement’s motivation to look into this supplier in the first place? We may never know. By now their customers have likely already hit the ‘panic button’, scrambled to find an alternate/interim supplier, cut their losses and moved on. Perhaps the Supplier’s B2B customers had the resources to drive improvements, but chose instead to focus their attention on other suppliers perceived to be of higher risk…

    companies take responsible sourcing seriously – but only in developing countries

    As more and more production is moved offshore to countries like China, the focus of supplier vetting and due diligence tends to be offshored as well. Scandals involving product quality, environmental impacts, and modern slavery ensure companies take responsible sourcing seriously – but only in developing countries. In North America, it seems, the law of the land is seen as ample protection from supply-chain disruption, and as such, North American suppliers are being treated as ‘low-risk’, which ultimately leaves them off the hook in global responsible sourcing programs.

    “There are good suppliers in ‘risky’ countries and risky suppliers in ‘good’ countries”

    As cases like this highlight, however, assuming North American suppliers are “safe” and Chinese suppliers are ‘risky’ is not a sustainable long-term approach. As a Responsible Sourcing professional once told me, “There are good suppliers in ‘risky’ countries and risky suppliers in ‘good’ countries”. In other words, a supplier’s factory’s geographic location is not a proxy for risk. Due diligence must be undertaken by procurement with all suppliers on an ongoing basis – regardless of geographic location – and those suppliers need to know that buyers truly care about the safety of factory workers and want to see their continuous improvement!

    Care (and duty thereof) is the key here, because to mitigate the likelihood of avoidable disasters and tangibly improve the environmental health and safety of workers, it’s going to require that CPOs genuinely care about their Suppliers’ CSR & Sustainability on the front-end (not after-the-fact), and stop treating it like a ‘check the box’ exercise for geographically ‘at-risk’ suppliers.

    In Summary

    • This tragedy was avoidable.
    • CPOs need to take ‘responsible sourcing’ and ‘sustainable supply-chain’ initiatives seriously and globally (and ‘globally’ includes North America).
    • Category Managers must put non-financial performance as the first KPI on the list (above Cost, Quality, and On-Time Delivery).
    • Sourcing Directors must include Corporate Social Responsibility in RFPs and ensure suppliers are incentivized to improve on an ongoing basis.

    As US Federal regulations drop like Fall leaves, it’s up to Procurement to fill the due diligence void left behind by motivating suppliers to maintain the highest of standards, benchmarking their suppliers against global best practice, and rewarding those suppliers that go ‘beyond-compliance’. Corporate-led multi-stakeholder industry initiatives may also help (such as the Responsible Beauty Initiative that launched in November 14, 2017). While due diligence with suppliers in emerging markets will always be a necessity, it should never be at the expense of the wellbeing of workers and their families in the buyer’s backyard.

  • This is a repost from August 14, 2017. Original article can be found here.

    I was honored to have the opportunity to speak at the United Nations Headquarters recently. To be invited into the hallowed halls of the UN, walking past portraits of global leaders and heroes, you get a sense of the seriousness of the institution and the gravity of what is at stake.

    Inside what seemed like a “War Room“, with business, government and non-government organizations well represented, the tone was at times fittingly combative.

    The day kicked-off with an (unintentionally intense) introduction from Nikhil Seth Executive Director of UNITAR and Paloma Duran Director of the SDG Fund. After cordially introducing the day’s events, the floor was open for a few questions from the attendees, (typically reserved for obligatory house-keeping questions, or a few soft open-ended questions about the state of “international progress”). The invitation for questions resulted in a European government representative challenging the sustainability (and therefore integrity) of the intergovernmental organization’s funding sources, leaving the panelists to calmly refer the attendee to anecdotal evidence of the vetting process for accepting funds from corporations. Good to know, but not exactly the “we can do this” kind of attendee engagement anyone was expecting.

    Once the introduction was out of the way, the day seemed to get back on track with a content-filled first training session on implementing and reporting on the SDGs featuring representatives from BSRBecton DickinsonPepsiCo Egypt, and International Flavors & Fragrances (IFF).

    The moderator for the second session, Stephen J. Donofrio Senior Advisor for Supply Change at Forest Trends Initiative, promised a more interactive session featuring suppliers discussing “how to initiate and sustain internal processes and initiatives”. The panel featured two distinctly different perspectives, with Tonye Cole CEO of the Sahara Group, a large Nigerian private energy company, and Cindy Bush Director of Environmental Health and Safety and Sustainability at Tessy Plastics Corporation, a family owned and operated contract manufacturer headquartered in central New York.

    Mid-way through the presentation, it was apparent that doing business in both the energy and the plastics sectors are inherently challenging, with some attendees wasting no time shedding light on some of those challenges – asking how the panelists intend to tackle regional social issues, what they are doing to drive eco-friendly initiatives and how they navigate volatile political climates while maintaining corporate and social integrity. 

    While Donofrio was able to calmly collate the various (and sometimes lengthy) questions into succinct inquiries that Tonye Cole and Cindy Bush could deftly navigate, it started to seem like the attendees may be left with more questions than answers, and the task of figuring out how businesses can save the world from environmental and social disaster, was at best looking elusive.

    Then somewhere near the end of the session, Cindy Bush answered a question which inadvertently provided a master-class in storytelling, while allowing the attendees the opportunity to pivot from “Us & Them” to simply “Us”.

    Cindy was asked to comment on a major barrier to businesses leading the way: Large companies are often hesitant to roll-out supply chain sustainability programs because they think small suppliers are either unprepared or unwilling to participate.

    (Skip to timestamp 43:20 to watch Cindy Bush’s compelling response)

    “… I really didn’t know what I was doing five years ago… But, failing their survey was one of best things to EVER happen to our company.” – Cindy Bush, Tessy Plastics

    What are we talking about?

    Cindy started by clearing the air and explaining the topic, “sustainable procurement”, and what it means, as it relates to her customers, “…We’re a tier one supplier for large OEMs, and they have some requirements for their suppliers, (and they articulate them quite well), and our duty, as a supplier, is to try to figure out how to take their aspirations, and put them into practical day-to-day operations and actions.”

    Then she clarified what sustainable procurement means in the context of her own supply base, “… because we know what is required and what our customers are asking of us… one of the key things that we’ve learned… is how to take take what’s been required of us, and then turn around and “softly” require it of others… “

    Make it Personal

    With the topic crystal-clear to everyone, Cindy humanized the challenge faced by many organizations, dispelling any potential cynicism toward her sincerity, by sharing an unguarded moment: “[J&J] gave us the EcoVadis assessment and survey, which has served as a guide-post for the development of our program… I actually find myself getting choked up when I think about it because… I really didn’t know what I was doing five years ago. I told you the truth right? But failing their survey was one of best things to EVER happen to our company.”

    Back it up with Data

    Many speakers before and after had fantastic data, and solid business cases, but the reason Cindy was so persuasive is that she kept the data in her pocket until the audience was ready. Only once the attendees were fully-engaged, did Cindy hit them with the hard facts. Explaining why failing the assessment was the best thing to ever happen to her company, she continued, “… and here’s how I know it to be true. [At] the same time that we did not do well on our first EcoVadis score, we were only 300,000 square feet, we barely had 400 employees and profit sharing in a quarter was fifty dollars.”

    “[Five years on,] now we’re 1.5 million square feet, we deal with some of the largest OEMs in the world, and we have tripled, (if not more), our profitability. All [while] at the same time, (which is not lost on all of you), we kept our eye on the prize – We got real about our responsibilities, we understood how to make and have less impact on the environment, the world, and have a positive impact on our employees.” 

    The Result

    Cindy’s response blew everyone away – In a few short minutes she managed to eloquently demonstrate the important role her customer, Johnson & Johnson, played by inviting Tessy Plastics to participate in a Sustainability Rating program, the significant business benefits Tessy received by participating, the correlation between sustainability and profitability, and the positive flow-on effects corporate social responsibility can have when applied to the context of a multi-tier supply chain.

    Cindy’s response was authentic, engaging, and relatable, but it also had the unintended effect of refocusing and uniting the attendees. There was a palpable enthusiasm and freedom to be authentic, which gave attendees and panelists liberty to openly communicate on challenges and successes alike.

    In the space of one session, (and arguably the length of one story), the atmosphere had transformed from a combative collective of competing interests, to that of a collaborative group of diverse stakeholders ready to tackle the world’s biggest challenges.

    (My view during Training Session 3 SDGs and the role of the Supply Chain)

    The following sessions, which flew-by, included broad topics such as Governments Partnering with the Private Sector (Session 4), The SDGs as a compelling tool for ESG reporting and leadership (Session 5), and Tools to Support Communicating SDG Progress (Session 6).

    By the time I was called upon to introduce the “Closing – Inspirational Recap” speakers, Evan Harvey Global Head of Sustainability at NASDAQ, Patricia Chaves Senior Sustainable Development Officer at the United Nations Division for Sustainable Development (UNDESA), and myself, it was almost impossible to bring order to the group, as they were (dare I say) having too much “fun”. Maybe that’s a stretch, but there was definitely “collective excitement”, with attendees sharing ideas with their newly acquainted peers. Certainly not a bad level of engagement for 6PM on a weekday, after spending an entire day locked in a bunker.

    The wrap-up session provided Evan Harvey an opportunity to show why he is a sought-after sustainability thought leader, effortlessly relaying relatable case studies of SDG-inspired sustainability success. Patricia Chaves took the opportunity to challenge the attendees to take the SDGs back to their workplace, stay engaged throughout the coming 12 months, and return with stories of progress. Finally, I challenged the attendees to be “translators” of the SDGs, and was happy to provide an answer to the last tricky question of the day, as it gave me an opportunity to talk about a topic I care about a great deal.

    All told, I found this to be a truly inspiring event, thanks in no small part to the story relayed by Cindy Bush, which set off a chain reaction of compelling discussion (that we’ll all be striving to ensure leads to progressive action).

    If you’d like more info on the UN SDGs “Business Leading the Way”, you can download the EcoVadis report “How the UN’s SDGs bring Positive Change to Global Businesses”.


  • This is a repost from July 10, 2017. Original post can be found here.

    This is the smartest marketing campaign I’ve seen recently. Effortlessly combining Mission, Education, Call to Action, and Sale is no easy task, and The Economist has managed to pull it off with flair.

    I think this image of me holding my new copy of the weekly magazine, along with a “free” Moleskine® inspired notebook, speaks volumes about how The Economist has managed to corner a significant demographic (Manhattan-based New Yorkers, hungry enough to eat anything from a street-vendor, and willing to listen to a sales-pitch for free food).

    However, a quick search of the campaign hashtag #feedingthefuture on LinkedIn revealed a more eloquent summary of the marketing genius at play:
    This campaign, while not, it seems, aligned with any non-profit or charitable organization, promotes education, through common experience (i.e., eating food, drinking coffee), of an issue that warrants substantially greater public attention. How can the public learn more about the staggering cost of food waste, both economically and environmentally? By reading things like The Economist. It works. – Daniel DioGuardi

    In any case, the half-burger was great, and while not enough to satisfy, (thank you eatsa for providing the rest of my lunch), I am now interested to learn more about plant-based protein, and meat-alternatives… plus I’m a now subscriber to The Economist for at least the next 12 weeks.

    I’m in New York City this week, representing EcoVadis at a workshop at the United Nations Headquarters during the UN High Level Political Forum (HLPF). The workshop, titled “Business Leading the Way: The SDGs as a Tool for Sustainability and Growth”, has been co-organized by the UN Department of Economic and Social Affairs (UNDESA), the Sustainable Development Fund (SDGF), and the United Nations Institute for Training and Research (UNITAR), with the generous support from EcoVadis.