Sustainability Issues and Opportunities
With goods and services sourced globally from approximately 90 countries around the world, ethical buying and selling are integral to the company’s social, ethical and environmental performance. A bold strategy is necessary to continue and improve on the company’s current initiatives.
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Senior Management/Strategy:
For senior management, the focus is on value creation for CTC’s customers, employees, communities, suppliers and shareholders. This process is circular in its progression and can be exemplified when tackling sustainability challenges such as with ethical buying and selling initiatives. As such, we propose the following:
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Create greater strategic vision and long term sustainability planning for and by senior management
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Integrate sustainability initiatives / goals into cross functional business units
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While managing costs, increasing operational efficiencies and increasing revenue from business sustainability initiatives
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Find markets that will assist in working towards these goals
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Innovate with new strategic frameworks, such as the Blue Ocean strategy
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By means of creating a new market space with low pricing and high differentiation through ethical sourcing and selling
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Seek out partnerships with retailers who have implemented stringent ethical sourcing strategies to share knowledge
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Seek out opportunities to market the company as having the most developed ethical sourcing policies in Canada
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Walk the talk, leading by example management will be necessary to show the rest of the staff to apply similar principles in their own lives (i.e. wearing only ethically sourced clothing).
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Governance:
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Select a board of directors from a balanced set of stakeholders who best support the execution of CTC’s sustainability strategies
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Oversee continued development of policy frameworks governing Codes of Conduct such as with the Supplier Code of Business Conduct
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Develop internal governance mechanisms to drive sustainability initiatives. These controls are instrumental in monitoring and measuring progress of these initiatives and taking corrective actions when required
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Communicate the company’s vision with all employee levels, and set standards and rewards for those employees advancing sustainability initiatives.
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Solutions through Business Functions
Senior Management, Strategy & Governance
Select the business functions below and explore our recommendations.
Senior Management/Strategy â–¼ Governance â–¼ Procurement/Purchasing â–¼ Supply Chain Management â–¼ Operations â–¼ Manufacturing Innovation â–¼ Information Technology â–¼ Environmental Affairs & Sustainability Management â–¼ Marketing and Stakeholder Relations â–¼ Human Resource Management â–¼ Accounting and Finance
Procurement / Purchasing & Supply Chain Management
CTC works with suppliers throughout their entire global supply chain to ensure compliance with their Codes of Conduct. Products are responsibly sourced, manufactured, and transported according to the standards outlined in the company’s Supplier Code of Business Conduct (SCBC) and their Business Social Compliance Initiative (BSCI). However, their procurement process and supply chain system can yet be further developed.
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Procurement / Purchasing:
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Create supplier sustainability scorecards to systematically measure the sustainability of their various suppliers. The scorecards can measure energy and water use, recyclable materials, waste, and greenhouse gas emissions, employee health and safety of the entire supply chain
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Through CTC’s procurement, continue to eliminate the use of harmful chemicals and pesticides throughout their entire manufacturing process
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Diversify product portfolio by becoming more aware of local community vendors and Canadian Small Medium Enterprises (SMEs) while still maximizing opportunities for global sourcing
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Highlight CTC’s Ethical Sourcing initiative on the online procurement platform and supplier registration page to attract more sustainably focused suppliers
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Currently, the online supplier registration page simply provides instruction on the procurement process using a registration database (Vendor Gateway) to source RFQs and Vendor contractual information
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Implement a reward program for vendors who achieve 0 audit infractions on a consistent basis.
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Supply Chain Management:
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Train suppliers and their employees on the implementation and compliance of CTC’s Codes of Conduct (SCBC and BSCI); this would also include the distribution of the codes to factory employees as well as its translation into the country language
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Innovate and work with suppliers to help them find efficiencies and improve their environmental performance, through continued supplier engagement, training opportunities, and management site visits, and 3rd party audits
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Monitor supply chain to bribe-proof it from foreign personnel looking to deviate from the company’s ethical sourcing values.
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Operations, Manufacturing Innovation and IT
CTC’s focus on productivity ensures its business growth through more efficient operations, while minimizing its environmental footprint. Operational controls are also in place to measure the company’s performance on key strategies, as well as provide the basis for a corrective plan of action. The company’s continued innovation towards improved production methodology, effective information systems, and flexible manufacturing are leading to successful results in cost leadership/ differentiation strategies – all of which ethical sourcing is directly or indirectly related.
Operations:
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Continue to integrate sustainability goals and practices into business operations whereby ethical sourcing results in a value-add for internal and external stakeholders
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Ethically source and buy materials for retail operations through store retrofits, lighting retrofits, and roofing retrofits including rooftop solar systems installed on 32 of their stores.
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Manufacturing Innovation:
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Continue with product and process innovation exemplified in the company’s Structural Packaging Test (SPT) to improve the current supply chain handling process.
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Products and their packaging are put through a series of rigorous tests to minimize damage during shipping, handling and storage.
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Continue to focus on product development teams to find ways to manufacture and ship these products more efficiently
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Currently, CTC has been able to increase the density of products per pallet and package by 40-50%, reducing the number of containers coming from China.
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Consider sourcing from more sustainable factories in the future.
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Information Technology:
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Implement continuous technology-enabled reporting to connect raw materials, components, manufacturing and retailers all to cloud
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Consider new agile methodologies because the next generation of retail technology leaders will require a culture of innovation:
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Launching new digital technology, mobile, and e-commerce functionality
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Creating new platforms for service delivery across brands.
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Environmental Affairs & Sustainability Management
To drive continuous environmental improvement, CTC operations and facilities conform to ISO 14001 Environmental Management Standards. The company recognizes the importance of integrating environmental concerns into business operations and corporate strategy. In managing potential external threats (as well as opportunities), ongoing environmental scanning and analysis is required.
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Monitor LOHAS (lifestyles of health and sustainability) consumer trends
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Provide continued commitment to environmental stewardship (currently over 60 projects) and a sustainable forestry initiative
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This includes ethical paper procurement and usage to support their sustainable forestry initiative
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Expand partnerships with international organizations such as the UN Global Compact, and global fair-trade suppliers
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Continue research and participation in new sustainability management strategies such as the Circular Economy model
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Involvement with Natural Step and the Ontario Circular Economy Innovation Lab (CEIL); and their participation in this new program bringing together private & public sector leaders, and innovators to design, test and implement circular economy solutions
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Support and involvement with the social enterprise Toronto Tool Library whereby CT has donated many tools; the case study and Circular Economy (CE) solution promotes the continued life cycle of these products in the sharing economy
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Implement a product take back program where the community can participate bringing in these products to properly recycle them (i.e. cfl light bulbs, batteries, paint, used oil, etc.
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Research ways to support local environmental issues important to the company (e.g. shore clean up, community recycling days, etc.).
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With the changing retail landscape, a sustained competitive advantage can be difficult to achieve. Once achieved, it offers resilience without losing its value even in times of change brought on by external factors. CTC has accomplished just that – a sustained competitive advantage. The company’s commitment to sustainable practices including ethical sourcing throughout their supply chain and internal operations, have helped improve shareholder value and continued market growth. The improved shareholder value has been gained through social and environmental value creation.
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Highlight CTC’s involvement in over 60 environmental stewardship programs for products such as used tires, electronics, used oil, light bulbs, household batteries, leftover paint, beverage containers, and product packaging.
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Implement a communication strategy to investors regarding CTC advancing sustainability practices
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Draw relation between refining of ethical sourcing practices with the increase of the company’s value to stakeholders
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Connect ethical sourcing with the company’s greater sustainable development
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Implement a grading system to markets ethically sourced products (i.e. tag a gold label on those products that meet the highest ethically sourced standards such as fair trade)
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Implement a robust ethical sourcing strategy; this shows customers’ concern for greater issues of the business and perhaps environmental impacts on communities.
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Marketing and Stakeholder Relations
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Implement a commitment to responsible sourcing of talent; recruitment for procurement roles would require buyers with experience and interest in ethical sourcing initiatives
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Create sustainable HR systems and processes that institutionalize sustainability at all levels of the organization
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Implement an ethical sourcing leader in the organization
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Communicate the ESG vision of the company from top down
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Monitor employee engagement to ensure alignment of behaviours with the company’s set of ethical standards and values.
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Human Resource Management
Accounting and Finance
CTC Reporting follows the GHG Protocol Corporate, Project and Value-Chain (Scope 3) Accounting Standards. The GHG Protocol Initiative is a multi-stakeholder collaboration facilitated by the World Business Council on Sustainable Development (WBCSD) and the World Resources Institute (WRI) to establish and promote business standards for GHG accounting and reporting.
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Using the abovementioned tools, track costs of improving ethical sourcing initiatives
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Integrate sustainable efforts from the company with the financial documents
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Implement a sustainability fund from the company’s yearly revenues to pay for projects that advance the company’s sustainability objectives
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Align the company’s sustainability reporting with GRI – global reporting initiative to help understand and communicate CTC impacts on issues such as climate change, human rights and corruption.
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