Sedex 2015: Paths to Sustainable Supply Chains
On a crisp Wednesday morning last week, the 2015 Sedex Global Responsible Sourcing Conference kicked off in London’s Parliament Square, barely a stone’s throw from the seat of British government. The event saw 500 delegates from brands including Procter & Gamble, Nestlé, Bacardi and Sky come together to discuss the future of supply chains through a series of plenary sessions, breakouts and inspirational speakers.
In his opening speech, Georg Kell, executive director of the UN Global Compact, laid out the case for global enterprise to take a united stand on sustainable development.
“A world that is insecure and under threat is not good for business,” he attested. “Technological advances offer us the ability to address all of the challenges we face… but even the largest corporation cannot change society alone.”
Kell stressed the significance of the coming year for the business community. 2015 sees the expiry of the existing Millennium Development Goals and the forging of a new post-2015 UN agenda through the Sustainable Development Goals (SDGs) due to be agreed upon in September. These are anticipated to include new targets for member states in areas such as sustainable industrialization, global resource management and employee welfare.
In navigating this transition, Kell outlined the part the UN Global Compact can play. A global business network backed by several UN agencies, the UNGC has the ability to represent the sustainable business community in the formative debate on the SDGs. “Through the UNGC we have a unique opportunity to shape our future,” he said. “We must not perceive this as a constraint, but as a new opportunity.”
Following on, Tom Smith, Acting General Manager at Sedex, chaired a panel discussion looking at ways to minimise the risk and maximise the opportunities the SDGs represent for buyers and suppliers. Sally Uren, CEO at Forum for the Future, pressed home the importance of foresight.
“By looking into the future, we can make better decisions today,” she attested.
Referencing Forum’s recent publication The Long View, she demonstrated how anticipated targets such greater transparency can be used to create new value: “Transparency can feel like a threat, like there is no longer anywhere to hide, but it can also be a virtue. It can be used to connect consumers to product origins and as a result can drive new demand.”
Giles Bolton, Ethical Trade Director at Tesco, acknowledged that the proposed 169 targets of the new SDGs offered more scope for confusion than the 21 targets of its predecessor. However he felt that the increased focus they placed on industry provided “more legitimacy for the role that business has to play in the future of sustainable development.” That sentiment was echoed by Peter McAllister, Director at the ETI, who felt that businesses of the past had been too passive, with too much reliance on government for oversight, and too much focus on compliance.
Asked how businesses can scale up their sustainable development efforts to create impact at scale, all the panellists felt that greater collaboration and clarity of purpose were essential. “I get the distinct impression business doesn’t want more advice from government,” exclaimed Ian Shapiro of the UK’s Department for International Development, to warm laughter from the floor.
“What we need,” Uren clarified, “is to understand which levers to pull, and for civil society, government and business to pull them together.”
The second plenary discussion saw panellists digging deeper into the benefits of responsible sourcing. Dexter Galvin, Head of Supply Chains at the CDP, and Joe Maguire, Global Sustainability Manager at Diageo, explained how transparency programs such as CDP’s can have benefits beyond environmental conservation and addressing risk.
“What gets measured gets managed,” Galvin said, explaining how the CDP platform can also help businesses to foster better relationships within the supply chain and encourage greater supplier engagement.
Laura Palmeiro, CSR director at Danone, and Nikhil Hirdaramani, director atHirdaramani Industries, illustrated how the journey towards responsible sourcing can differ for a family business and a multinational brand. However, common to both stories was a recognition of the less obvious business rewards, such as happier employees and reduced labour turnover. All the panellists agreed that the number of competing auditing and certification systems was an impediment for manufacturers, and that greater cooperation was needed to develop standardised systems. Repetitive requests for audit information were also identified as an unnecessary burden on suppliers.
Asked if climate concerns were starting to affect purchasing decisions, the panel observed that it was becoming common for companies to deselect suppliers based on their environmental performance. Galvin cautioned against demonising underperforming elements of the supply chain and thus missing the opportunity to create change. “It is much better to use a carrot, rather than a stick approach,” he said. “Identify where your suppliers simply need a helping hand.”
In a moving afternoon keynote speech, Rani Hong, UN Special Advisor and President of the Tronie Foundation, pressed the business community for greater awareness on indentured labour. Recounting her own childhood experience at the hands of human traffickers, she highlighted the difficulties in identifying instances of non-compliance without the skills to recognise it.
Finally, Gregory Elders, Senior ESG Analyst at Bloomberg, chaired a discussion on how technology can help to scale up CSR efforts. He explained that intelligence data is taking an ever more central role in the corporate decision-making process, and described how Bloomberg has seen a 50% increase in the take-up of its business and market analysis services over recent years.
“There is a role for greater technology in CSR,” said Anne Rosenbarger, Southeast Asia Commodities Manager at the World Resources Institute. “There have been lots of impressive commitments over recent years, but we are still left with a question, and it’s a very daunting one: How do we achieve that?”
“Modern technological advances,” she continued, “can offer us a broader range of data, with a higher resolution and greater accuracy, as well as the tools to digest that data into actionable, usable chunks.”
Lance Younger, CEO at Statess, concurred: “Big data can be scary. There is a need for more integration to draw information together into ‘small data’ that is relevant to you.”
So how can firms safeguard the integrity of their supply chains against the forthcoming changes to the business landscape? By seeking opportunities for value creation within the new SDGs, by encouraging greater cooperation within the sourcing community and greater adoption of technology, and by recognising the ability we have to co-create the new sustainable development agenda and shape our own business future.