Supply chain news and comment October/November CCB 120.
November 28, 2011
The move by John West to start making their supply chain more transparent and accountable is an intriguing development in food retail. The more customers can be informed of the way in which their food has been produced the better. This development, combined with effective education of the reasons for the move can help us enter an era of absolute consumer choice and product transparency. However this news also brings with it some intriguing discussion points.
This story began in 2008 when Greenpeace issued a naming-and-shaming report on the sustainability of UK tuna suppliers. John West came dead last. This gives us a great example of how naming-and-shaming practices have demonstrable effects on how companies operate. Greenpeace’s involvement in this project is no coincidence. Partnerships between NGOs and businesses are invaluable to today’s society with sustainable aspirations and this is an excellent example of their efficacy. However there will come a time when all the ‘low hanging fruit’ of sustainable aquaculture in John West’s supply chain has been rectified and they will have to suffer financially if they want to be fully sustainable. The partnership’s ability to survive this problem will be well worth watching.
Another interesting element of this story is its impact on John West’s competitors. Many entrepreneurs recognised the gap in the market for truly sustainable tuna and exploited it by developing brands with sustainability engrained throughout their supply chain – and they faired well as a result. Customers were happy to buy more expensive tuna from these suppliers and the business model was proven. As a result the larger suppliers followed suit and in John West we are witnessing one of the few remaining tuna suppliers change their practices to keep up with the others. These small businesses have proven their worth by demonstrating the business sense of incorporating sustainable practices into their supply chain and have consequently changed the industry. But what is their reward? Industry standards have changed and these companies have suffered as a result of their own success. While these firms can call their role in changing industry standards a success, the business model is not sustainable. Must they consider this their lot in life? Or is there some level of recognition they deserve but do not receive?
Hugh Macpherson has a Msc in Environmental Technology and is currently undertaking an internship at Corporate Citizenship.
John West Announces Move to Full Supply Chain Transparency
John West has recently announced the launch of a new application that will bring full transparency of their supply chain to consumers. The application, ‘Fish Finder’, is available on their website and will enable customers to track the exact source of the fish in their can including the ocean and even the boat that made the catch. This latest commitment to by John West to pursue full chain traceability forms part of their on-going fish sustainability and marine biodiversity programme launched in September 2011 in consultation with Greenpeace and a wide range of industry experts.
Paul Reenan, Managing Director, John West, said: “John West is dedicated to tracing the supply chain of every fish sold so we can ensure that we continue to sell fish which is not under threat and is sourced from areas of world where the quantity of fish is high. We know the origins of every product in our range and we are committed to sharing this detail with all our customers, starting with tuna and rolling out across our other seafood ranges over the next 18 months.”
New greenhouse gas standards unveiled for corporate value chain and products
The Greenhouse Gas Protocol has launched two new standards developed by the WRI and the World Business Council for Sustainable Development, which will enable businesses to better measure, manage and report their greenhouse gas emissions, save money, reduce risks and gain a competitive advantage. The Corporate Value Chain Standard reveals opportunities for companies to make more sustainable decision about the products they produce buy and sell by allowing them to look strategically at greenhouse gas emissions across their value chain. The Product Lifestyle Standard will enable companies to measure the greenhouse gas emissions of an individual product, measuring emissions across materials, manufacturing, use and disposal and help them to develop and design new products and provide insight for more informed consumer choices.
Ford expands programme for measuring suppliers’ carbon footprint
Ford is tripling the size of its programme to understand and measure suppliers’ carbon footprint. Ford is increasing the number of suppliers surveyed for their energy use and carbon emissions from 35 to 128 and will include companies that supply vehicle production parts and components, information technology and logistics services. This will account for nearly 60% of the company’s $65 billion in annual purchases. Commenting on the expansion of the programme, Tony Brown, group vice president, Ford Global Purchasing, said “By expanding our programme to a cross-section of suppliers, we will significantly increase our understanding of suppliers’ ability to manage their carbon impacts and further inform the creation of a broad-based carbon management system.”
According to new research by CIPS, supply chain issues showed the lowest upturn out of all the terms including emerging markets, risk management and sustainability and skills, researched with only a 14% increase. The research shows that FTSE100 companies in the retail and consumer, aerospace and automotive and food and drink sectors are most likely to reference supply chain issues in their annual reports with Burberry, Rolls Royce and Unilever being the companies reporting most on these issues in each sector. The technology sector came 9th out of 13 sectors with regards to focus on supply chain issues despite having one of the more complex global supply chains.
Carbon Disclosure Project will issue supply chain scores (in brief?)
The Carbon Disclosure Project in partnership with First Carbon Solutions will be adding a scoring system to its supply chain programme. Taking information provided by participating suppliers a disclosure and a CDP Supply Chain performance score will be issued in order to help CDP Supply Chain members and their suppliers benchmark their performance and seek to improve performance year-on-year.
Mattel drops packaging linked to rainforest destruction
Mattel has agreed to stop buying paper and packaging linked to rainforest destruction following a global campaign by Greenpeace. The investigations by Green peace showed that packaging of Mattel products were being produced using timber from the rainforests of Indonesia which are home to endangered species such as the Sumatran tiger. As part of this new commitment Mattel is also instructing its suppliers to avoid wood fibre from companies “that are known to be involved in deforestation”. They have also included safeguards against buying wood fibre from tree planatations established were natural forests used to stand and aim to increase the amount of recycled paper used in their business.
HP and Apple lead on supply chain transparency (in brief)
According to a new report by Det Norsk Veritas that looks at 26 US technology companies and evaluates their reporting of sustainability management across their supply chains, HP and Apple are leading the sector. HP, Apple, Intel and Motorola were the top four companies for overall performance in the Clear Links Report 2011. By identifying best in practice examples in sustainable supply chain reporting, it is hoped companies will be encouraged to increase transparency throughout the IT industry.
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