With the first month of 2021 behind us, we should take the opportunity to refresh our objectives. Although we cannot anticipate the remainder of 2021, there is something we know without a doubt: it should be a year to guarantee more sustainable sourcing.
As we start the year, reacting to and recuperating from the pandemic is still the highest priority. However, Covid-19 and the resulting health, economic, and social crises have reinforced the need to build more resilient and sustainable supply chains. This situation emphasizes that sustainable sourcing is a long-term responsibility that requires consistent measures. For both customers and investors, sustainable and ethical supply chains have become non-debatable, and 2021 offers the potential for change-making.
To help you in achieving your goals, we propose four sourcing guidelines for 2021.
1. PRIORITIZE CLIMATE ACTION
Worldwide temperatures are one degree above pre-industrial levels, on a course that could see that number ascent to three degrees before the century is over. A three-degree increase will result in the flood of coastal areas, extreme and fluctuating climate, water shortage, and irreversible loss of biodiversity.
To guarantee continued progress, resilient supply chains with climate goals should stay a primary concern for your business, even as you work to react to the pandemic. Although it might very well be tempting to focus solely on the most current issues, disregarding sustainable sourcing might make you fall behind on your responsibilities, weaken customer loyalty, and waste significant momentum generated by past or present efforts.
In reality, a more profound understanding of your suppliers and the climate emissions and climate-related risks in your supply chains permits you to accomplish more resilience in the supply chain accompanied by sustainable sourcing. You are promoting your pandemic reaction plan and your sustainability responsibilities by focusing efforts to improve supply chain visibility, identify hotspots, and collaborate with suppliers.
For more in-depth insights and a roadmap to climate action in the supply chain, we wrote a white paper on implementing climate action in the supply chain.
2. SAFEGUARD SOCIAL COMPLIANCE AND HUMAN RIGHTS
Throughout the world, millions of adults and children experience violations working on plantations, obtaining raw materials, and assembling merchandise for the global market. They are at the bottom of worldwide supply chains, from daily goods such as vegetables and fish to luxury products such as jewelry and designer clothes that end up on global store shelves. Unfortunately, the COVID pandemic we are experiencing has only worsened their situation.
Guaranteeing social compliance and eliminating human rights issues from the supply chain has become a critical and multifaceted task for companies – especially looking at the currently discussed mandatory human rights due diligence (e.g. the “Lieferkettengesetz” in Germany).
The UN Guiding Principles on Business and Human Rights provide businesses with voluntary guidance on their human rights commitments. Further human rights references are the Sustainable Development Goals (SDGs), the OECD Guidelines for Multinational Enterprises, and the ILO MNE declaration. Voluntary standards, which have evolved rapidly in recent years, can be beneficial but are often not adhered to enough. Now the government also needs to recognize that new, legally enforceable laws are mandatory to make companies accountable for human rights. Governments are gradually evolving in several countries in this regard.
Making human rights a priority and setting targets before it becomes legally binding can give a head start in from the competition.
3. ENGAGE WITH SUPPLIERS
Supply chain collaboration discussions typically concentrate on brands and retailers, particularly those who deal directly with customers and whose reputations are at stake for sustainable sourcing commitments. So far, this situation stimulated relationships between supplier and consumer to become mainly transactional. Nowadays, however, suppliers also face increased customer expectations for corporate sustainability and disclosure. This customer awareness has led businesses to reconsider how they communicate with their suppliers.
Achieving supply chain sustainability creates a position for suppliers to satisfy customer needs and market expectations for a sustainable, immediate, and long-term future. A ground stone for this sustainability is greater supplier cooperation. Consider taking steps to develop strategic relationships and communicate more meaningfully with your supply chain when your supplier interactions are mostly transactional.
READ ABOUT SUPPLIER COLLABORATION IN OUR RECENT ARTICLE:
Usually, supply chain collaboration discussions focus on brands and retailers, particularly those wh...
4. BE SCALABLE FROM THE START
The overall goal should be to achieve sustainable and ethical standards across the whole product portfolio range. Ultimately meaning that any approach to assist your sustainable sourcing efforts should be scalable throughout the entire business. While at first, it may seem too comprehensive to invest in a range of instruments serving the company at all levels, a scalability focus lays the foundations for responsible sourcing across the entire organization.
And in the end, customers want to see that you are making a constant, long-term effort to bring about lasting change.
ATTAINMENT OF GOALS
By following these sustainable sourcing guidelines — complying with human rights and sustainability standards, collaborating with suppliers, and prioritizing scalability — you can ensure your business continues to thrive in 2021 and beyond.
While consumer demand for sustainable and responsible sourcing continues to grow, particularly in times of the pandemic, 2021 can be a year for your company that promises many opportunities for change and growth. Sustainabill helps you meet this demand by making it easy to enforce these guidelines in a sustainable business. With the sustainabill cloud platform, you engage with suppliers, map your supply chain down to the commodity or raw material level, where possible, monitor sustainability risks and track progress towards your sustainability targets.