Corporate Social Responsibility Estimator (CSRE): CSR Tool for Alumni and Others by Reshoring Initiative
Develop free online CSRE to include social responsibility in corp. sourcing/siting decisions to minimize manufacturings environmental impact
Tens of thousands of MIT alumni and others will be able to help corporations reduce their environmental impact by using the free tools we are developing. The mission of the CSRE is to reduce corporate environmental footprints by enabling companies to quantify the sustainability and profitability impacts of offshoring/reshoring (bringing back to the US) manufacturing. We will do this by building on the success of our Total Cost of Ownership Estimator® (TCOE). As recognized by the U.S. Commerce Department, TCOE assists corporations to more accurately assess the total microeconomic impact of the firm’s offshoring/reshoring decisions. The CSRE extension will quantify the societal or externality impacts, giving corporations a more accurate understanding of their decisions’ impacts on the world environment. We anticipate this will accelerate decisions to reshore manufacturing to the US, thereby promoting environmental sustainability.
A potential for environmental improvement is huge because offshoring has been so massive..According to the Economic Policy Institute, the US trade deficit with China alone, cost 3.2 million US jobs between 2001-2013, primarily in manufacturing. Balancing the goods trade deficit would shift to the cleaner US production equal to about 30% of current US production.
Many studies conclude that production shifted offshore is negatively impacting the environment. A recent study, “Targeted opportunities to address the climate–trade dilemma in China” by Harvard’s Dr. Zhu Liu et al, concludes “International trade has become the fastest growing driver of global carbon emissions, with large quantities of emissions embodied in exports from emerging economies. If carbon-intensive manufacturing in emerging countries such as China entails drastically more CO2 emissions than making the same product elsewhere, then trade increases global CO2 emissions.” CSRE will improve manufacturing’s worldwide environmental impact through better-informed sourcing decisions.
What actions do you propose?
Who will take these actions?
The Reshoring Initiative is in a unique position to provide this method as demonstrated by the success we have achieved for domestic manufacturing with our TCO Estimator.
The Reshoring Initiative looks forward to continuing to educate companies through the more sophisticated cost model of TCOE on the benefits and profitability of localization (producing near the consumer), and to extend our efforts using the CSRE. Through the introduction of the CSRE, we intend to advise corporations of the planetary benefits of dramatically reducing global freight, CO2 levels and achieving higher environmental standards sooner through localization and domestic sourcing.
We intend to promote and encourage our sponsors, advocates, the government and industry affiliates to recommend and facilitate the use of CSRE.
Where will these actions be taken?
CSRE will be developed by the Reshoring Initiative and located on the ReshoreNow.org website. We anticipate CSRE largely being used by U.S. companies and their global suppliers with a worldwide impact on climate change.
Even green-thinking companies struggle to understand the impacts of their supply chain. Dexter Galvin Head of CDP’s supply chain program commented on a recent study; "Essentially a lot of big purchasing organizations around the world have effectively outsourced their emissions to their supply chains. We think one of the solutions is to get more and more companies to start measuring, managing and disclosing their carbon emissions."
We anticipate companies in other countries using CSRE as they now use TCOE.
The CSRE will remain available to all users free of charge.
How much will emissions be reduced or sequestered vs. business as usual levels?
What are other key benefits?
CSRE will be used by corporations to better understand the externalities impacts of their offshoring and reshoring decisions while providing a standard measure for companies to quantify the societal impacts of those decisions including the impact on:
The planet due to differentials in pollution from:
- Manufacturing processes
- Power generation
- Freight transport and travel
- Inventory warehousing
- Product obsolescence
CSRE will provide:
- Companies a tool to include these externalities in their sourcing decisions and to be recognized for their positive actions.
- Provide advocates a tool to educate concerned constituencies on how to advance an environmentally sustainable economy by engaging and monitoring companies’ in their sourcing decisions.
- In combination with TCOE, enable companies to identify the products whose reshoring will provide major environmental benefits while maximizing shareholder returns.
What are the proposal’s costs?
Develop economic impact algorithms $17,000
Develop environmental impact algorithms $17,000
Test on real cases $23,000
Promotion $ 9,250
Month 1: Identify all relevant input factors.
Month 2: Determine how the inputs, e.g. weight of product, drive the outputs, e.g. carbon footprint. Much of the data is available from published sources or contacts with academia, think tanks and government offices.
Month 2: Start with China since it has represented about 50% of our goods trade deficit and 60% of reshoring since 2010.
Months 3-7: Spreadsheet in Excel the relationships
Months 8-9: Test on real cases
Month 10: Program onto our website probably in Cold Fusion language.
Month 11: Test the result
Month 12: Launch as a free online tool as is the TCOE.
Month 12: Promote through national and industry media and via industry and CSR events and organizations.
CSRE will only need periodic updates on the spreadsheet formula coefficients. We expect CSRE to be effectively advancing an environmentally sustainable economy by engaging and monitoring companies’ in their sourcing decisions for the long term.