CSR in the Financial Industry: A Focus on Supply Chain and Management

Green economy and sustainable development are often used interchangeably with the same meaning but in fact there is a clear difference between the two principles. Indeed, the green economy is an economic system that not only cares to adopt environmentally friendly solutions, but also -and above all -to do business.

Obviously there are some sectors that are more productive as they can be the recycling of waste or that of alternative energy but basically the main feature of the green economy is to see the environment as a real source of income. Sustainable development, however, is more an economic principle that is based on the industrial and productive development that is respectful of the environment.(Romei, 2015).

Companies that can be considered part of the green economy operate in all areas, even those using everyday materials and environmentally friendly procedures. To make an example, are fully attributable to the green economy those companies that deal with typography using paper produced from sustainable industries and inks that do not harm the environment or the furniture companies that also produce design products from recycled timber or a branch of a bank that implements environmental solutions. Finally should be stressed that the choice of sustainable green economy is, at least often, is not the result of ethical choices but rather a business informed decision: being sustainable is an important communication’s topic with strong media impact and, therefore, capable alone to promote a company.

The concept of Sustainable Supply Chain derives from the integration between the concepts of Supply Chain and Green Management: the first is the complex of materials and information flows aim to generate and transfer a product to the market, while the second refers to the strategies of management of environmental and social impacts from a firm. Sustainable and Green Supply Chain is called a “management approach” that aims to minimize the environmental impact of a product or service along its life cycle.

In this definition, the concept of life cycle of a product and process shifts the focus of attention from the company itself to the entire system of relations and actors that contribute, along with it, to the creation of value, opportunities and the minimization of environmental impacts. The majority of companies have so far considered their relationship with the environment as a problem largely confined to their physical boundaries that could have been operated through the sustainability of their processes and products and the adoption of management models aimed just at limiting the negative impacts of the productive site.

An approach of this type, however, is a limitation, to the extent that the environmental impacts of a product, if traced and related to the entire life cycle, accumulate along the relationships that exist between the various customers and suppliers in the form of waste, emissions and consumption generated along the value chain, from extraction of raw materials to the end of life of the product. Moving from a model that considers the company responsible exclusively on the impacts generated by its internal operations (in particular in the production process), can be realized that a significant part of the negative externalities are generated in the nodes and connections that comprise the supply chain.

Given these assumptions it results the need to consider "widened management models " capable to reduce overall impacts by involving all actors in the chain, by creating sustainable stakeholder value and minimizing inefficiencies and risks. In management perspective, therefore, the application of a SSC involves the adoption of numerous strategic measures along the supply chain including the reduction of the environmental and economic risks, the increased operational efficiency of the system and the innovation of processes and products.

There are several factors that can push a company to adopt an organizational model that considers the environmental implications of their value chain, as the globalization of markets and expansion-dispersion of the supply chain, resulting in increased inefficiencies or increased costs related to energy supplies, raw materials, transport, etc.

Other important issues are the growing importance of environmental parameters in the risk assessment of the business by investors, administrators and other key stakeholders, the reduction in the availability of natural resources and raw materials necessary to production or the increased regulatory pressures on the environment.