Concerns are growing in response to powerful nations actualized commitment to international environmental progress and the COP process. While government-led action is key for providing an incentive for business to move toward climate action, the two are not mutually exclusive. Corporations are global entities that in many cases rival the GDP of governments in revenue. For this reason, we can not solely be focused on the actions of our governments when considering sustainability. If we can locate supply chain solutions that are better for our world, and better for businesses bottom-line, we can progress their implementation without the bulwark of politics. If these practices become accepted industry standards,they will be entrenched in the global economic system.
In a Harvard Business Review analysis on the “sustainable supply chain”, Peter Senge a faculty member at the MIT Sloan School of Management and prolific author says that the key toward a more ethical supply chain is to propose such changes in the context of “innovation”. You need to change the idea of sustainability inside corporations from being “to do less bad” and toward expertise evolution alongside non-business partners. Senge argues NGOs create actual value and expand market share for business, considering “if a credible NGO certifies your product, your brand can gain hugely if you are willing to change your practices”. A key example of this claim is when “Coca-Cola decided to cut the water used to make a liter of Coke from more than three liters to 2.5 liters”.
Coca Cola according to the analysis however, was not considering the “200-plus liters” of water that it took to grow the sugar it’s product used. By partnering with World Wildlife Fund, Coca-Cola was better able to analyze it’s water footprint, and understand the differences of things like ‘drip irrigated sugar cane’ and ‘flood irrigated sugar cane’. These understandings are important because reputation is a very real fact that influences customer choices. For example, previous legal cases and documentaries like ‘Supersize Me’ have convinced consumers that “McDonalds is a tarnished brand” even if they have since taken steps to change methods of production. A company then that leads in being environmentally conscious, sustainable, and transparent from its inception is much better poised for success.
In a January 2015 World Economic Forum Report “Beyond Supply Chains Empowering Responsible Value Chains” the WEF explores with Accenture the possibility of “the triple supply chain advantage” – where companies achieve profitability while benefiting society and the environment”. By locally sourcing manufacturing products, companies “not only increase efficiency but also boost growth through local brand awareness”. Engaging local stakeholders with digital technology as has been done by Vodafone projects for farmers targeted to: ” increase income by 11% or around $128 billion across 26 of Vodafone’s markets by 2020″. This is all the more pertinent, as “One-third of humanity is fed through an estimated 500 million smallholder farms with less than two hectares of land”.
BSR (Business Social Responsponsibility) is a global non-profit corporate member organization composed of over 250 corporations, dedicated to identifying the foundation for sustainable business strategies. In a 2015 analysis on the ‘sustainable corporate supply chain’, the organization found four key attributes for successful collaboration: multistakeholder governance, accountability, transparency, and impact focus. The biggest challenges often to the adoption of all 4 key attributes across the supply chain are internal concerns such as” (the)legal department might not readily accept multistakeholder governance or the communications department might judge transparency as tricky”. That being considered, a key focus on impact by business across its supply-chain and the inclusion of dialogue with non- business partners is overwhelmingly beneficial.
(Below are three key questions from BSR to help facilitate Sustainability.)
- “Are there any nonbusiness actors who are not in our current governance model but that should be included to enhance accountability toward our vision and mission?
- How can we build an accountability model that will respect different actors’ levels of responsibility and impact and encourage continued participation?
- Have we translated our vision and mission into measurable KPIs relating to the impact we are having on supply chains, and are we transparently and regularly reporting against those?”
By Austin Schiano