This month PepsiCo announced the roll out of its new crop management system intended to help meet its target of reducing water and carbon emissions by 50% in the next 5 years. This type of commitment and action is becoming more commonplace – PepsiCo’s news follows the plans announced by Walmart earlier this month. The US-based supermarket is preparing to ask suppliers about the water, energy, fertilizer and pesticide they use per unit of food produced.
These examples demonstrate that companies are starting to recognise the environmental impact of their agricultural supply chains and more importantly, are putting plans in place to manage them. Given the ever increasing strain on global natural resources that is occurring, these are very necessary commitments.
Walmart and PepsiCo are clearly leading the field in this area. Many other companies have yet to accept responsibility for the management of their supply chains. However, the business case for this type of action should be obvious.
Having the knowledge and capability to report intelligently on the activities in your supply chain is an excellent tool for creating trust and minimising risks to your business. Sourcing materials or ingredients without knowing everything about their provenance is a risky situation to be in. These risks go beyond environmental impacts and the management of social issues in the supply chain is also a must.
At the same time, it is important for companies to look beyond the backward linkages in their supply chains and consider the forward linkages in their value chain. How are the products and services your company produces being used by consumers? What social and environmental impacts are created when your products come to the end of their useful life? Addressing these kinds of issues is one of the new challenges in corporate responsibility. Purely managing the impacts of your direct operations is no longer acceptable.
Katie is a consultant at Corporate Citizenship. Email her at katie.dodds@corporate-citizenship.com to discuss environmental management systems, emission reductions and supply chain work.
PepsiCo Unveils Global Plans to Revolutionize Farming
On 19 October, PepsiCo unveiled plans to roll out its new i-crop farming technology on a global scale. The online tool, which was developed with CambridgeUniversity is a crop management system that will enable PepsiCo’s farmers to monitor, manage and reduce their water use and carbon emissions, as well as maximizing potential yield and quality. Trials of i-crop are currently underway at 22 farms in the UK and the technology will be rolled out across Europe. The organisation hopes to take it to India, China, Mexico and Australia by 2012. PepsiCo also launched its first Sustainable Farming Report on 18 October which outlines its work to with 350 UK farmers on initiatives including low-carbon fertilizers and replacing more than 75% of the current potato stock with varieties that will increase yields and reduce waste by 2015.
Walmart Unveils Commitment to Sustainable Agriculture
On 14 October Walmart launched its new global commitment to sustainable agriculture. The strategy is divided into three broad areas: support farmers and their communities; produce more food with fewer resources and less waste; and sustainably source key agriculture products. Each focus area contains specific supporting goals to help the company track and report its progress. For example, Walmart intends to invest more than $1 billion in its global fresh supply chain in the next five years, and provide training to 1 million farmers and farm workers in such areas as crop selection and sustainable farming practices by the end of 2015. To help reach these goals, Walmart’s global markets have also established country specific commitments. For example, in India the company aims to source 50% of its fresh produce through its Direct Farm Program, whilst in China they will upgrade 15% of Direct Farm products from Green to Organic certified.
Sainsbury’s announces investment in the future of farming
Sainsbury’s has announced plans to invest a further £40 million in its series of Development Group schemes over the next three years, in addition to £21 million already invested to date. The Development Group schemes are designed to help farmers and suppliers produce more sustainably, both in the UK and overseas; they provide practical working partnerships where all parties pool their knowledge about supply chains, and work together to develop the skills and resources suppliers need. The announcement was made at the company’s ‘Farming for the Future’ conference in Warwickshire on 22 October, which brought together 1,000 of Sainsbury’s farmers and growers to discuss the future of food and farming. The conference was the first time the supermarket has brought together such a cross section of its farmers to discuss the major challenges facing the industry, and to explore new ways of making agriculture more sustainable.
A television report into the use of Turkish children in hazelnut production has led to questions in the Dutch in parliament about the involvement of Dutch companies. Campaign group ‘Stop Child Labour – School is the best place to work’ have also written an open letter to Verkade, Ferrero and Wessanen/Zonnatura asking them to disclose information about the origin of their hazelnuts. This follows the revelation that children are used to harvest hazelnuts in Turkey, supplier of 75% of all hazelnuts worldwide. Research by the Turkish education union Egitim Sen showed that children are helping their parents with the seasonal harvest for three to six months each year, missing out on education as a result.
Staples launches new sustainability strategy for products and packaging
Staples announced on 13 October that a new corporate strategy to drive sustainability innovation in product manufacturing, packaging and distribution by challenging its key suppliers to join it in its ‘Race to the Top’ sustainability strategy. The strategy calls for suppliers to compete not only in terms of product quality but also on cost, features and in creating innovative solutions for product manufacturing, packaging and distribution which will reduce impacts on the planet. The plan aims to increase environmental, social and economic sustainability and remove all waste and inefficiency from the organisation’s supply chain. As a first step, Staples is asking its key suppliers to address environmentally sustainable packaging priorities in the next six months. The strategy also involves the development of sustainability scorecards for products and packaging which will track innovation and environmental attributes, driving accountability through the supply chain.
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