In recent years, companies have greatly increased transparency around their supply chains including efforts to improve purchasing practices, reduce environmental impacts, and improve workers’ rights. While these efforts are commendable, we need to employ truly sustainable supplier practices across and throughout entire industries and supply chains. While supply-chain management may seem like a corporate issue, foundations and impact investors have a unique opportunity to invest in the underlying systems for collecting, managing, and sharing data in a way that informs these more sustainable approaches – ultimately improving the well-being of people and planet.
This was underscored for me recently when I had the fortunate opportunity to attend the 2013 Ceres annual conference, Igniting Innovation, Scaling Sustainability. Over a packed two days of dynamic thinking and active problem solving with some of the leading fortune 500 companies, investors, foundations, and nonprofits working on sustainability, I found myself most moved by a session called Chain Reaction: Leveraging Supplier Data to Drive Change where together we wrestled with how and when to share data in a meaningful way.
The question of leveraging supply-chain data stems from increasing access to information and growing consumer demands for companies to be transparent about sourcing practices and to commit to continuous improvement models with their suppliers. The recent tragedy in Bangladesh is a powerful reminder of how important these practices are, but also how difficult it is to know what’s occurring two, three, or even six tiers down in your supply chain. For example, an apparel company may work closely with one of its tier-one suppliers, but who’s to ensure that company doesn’t outsource a short, two-week work order to another company with a sub-par sustainability record? Similarly, while manufacturing or consumer product companies have made strides in identifying ways to protect against conflict minerals, it is incredibly difficult to trace the chain all the back to a small-pit mine in rural Africa. For the majority of industries, supply-chain sustainability is immensely more complex than simply putting a sticker on banana or attaching a slave-free label.
The challenge for all of us is how to leverage technology to drive smart supplier decisions, inform training investments, and ensure that profit with a purpose is made possible in practice. At Ceres, we wrestled with some of the big, underlying infrastructure questions such as how should industries come together to develop principals for sharing data on their suppliers? What format should it take? Who should own and manage that data—in particular when remediation is needed? Can this be done at a sector specific level or is an agency like the UN needed?
Investing in this underlying infrastructure will be a slow, tedious, and un-sexy topic in the sustainability world. Yet, is critically important for achieving the scale needed to drive change and a huge opportunity for foundations to invest in alongside their corporate peers. Given the inspiring folks I met at Ceres, I am confident that we can come together and across sectors to develop the infrastructure needed to support better supply-chain decision making. Information is power and with it, true sustainability innovations will occur – leaving us all with a healthier planet, stronger economies, and more empowered workers.
Whitney Mayer is a director at Arabella, where she provides guidance on strategy, evaluation, and implementation projects.