Sustainable sourcing and procurement – 4 companies that are leading the way
External pressures to enhance sustainable sourcing is an ever increasing pressure on businesses, no matter the industry. Customers are demanding ever more environmentally acceptable and sustainable products and suppliers to these businesses needs to be scrutinised to ensure ethical procedures are in place to protect valuable branding and reputation. Rightly, government weighs in through ever increasing legislation and lobbying to meet this urgent challenge through e.g. carbon emissions limits, disposability laws and the like.
Sourcing and procurement are already widely recognised centres for cost savings, relationship building and a key weapon to achieve competitive edge but now, the function is becoming a leading proponent for delivering the environmental changes that customers demand – in this article we highlight four companies operating in global markets that are leading the way.
One of the world’s largest snacks companies, Mondelez, has recently committed to sourcing 100% of its cocoa through Cocoa Life, by 2025. Cocoa Life is a program that seeks to reduce deforestation and child labour from cocoa supply chains, while also improving the welfare of cocoa farmers. It has been reported that 93,416 farms are currently mapped and monitored in order to prevent deforestation and as at April 2019, 43% of the company’s cocoa is sourced through Cocoa Life.Mondelez has also previously pledged to reduce their factory emissions by 15% from 2013 levels by 2020 – we look forward to seeing the results.
Another large end-user of cocoa, Mars, are making efforts to bring more transparency to their sustainable cocoa procurement efforts. They have released a list of their Tier 1 cocoa suppliers and are working with their suppliers to determine a joint roadmap to achieve their goal of using 100% Responsible Cocoa by 2025.
In addition to publishing suppliers, Mars will GPS map its entire cocoa supply to individual farm level, strengthen supplier standards for traceability in Cote D’Ivoire and Ghana and complete risk assessments for Indonesia, Brazil, Cameroon and Ecuador in the next two years. The company also committed to third-party verification of these efforts.
Swiss company Nestlé also places a big emphasis on sustainable procurement. In 2010, the company made a commitment to achieve zero deforestation within the supply chain of their agricultural commodities by 2020. With a year left to go they have now achieved 77% of their goal.Nestlé invested in developing Starling, a system that uses satellite imagery to identify areas at risk of deforestation, and are now using it to monitor their entire palm oil supply chain. The company plans to extend the service to check for deforestation in pulp and paper, as well as soya later this year. Nestlé also published a Transparency Dashboard that uses Starling data to show information on deforestation trends.
The company has called upon other manufacturers to adopt satellite monitoring services to increase transparency within their own supply chains. Bastien Sachet, CEO of Earthworm Foundation said that more publicly available information about deforestation and supply chains “will allow consumers and investors to really see which companies are truly walking the talk”.
A sustainable leader in the fashion sector is H&M who will transition to 100% sustainable cotton by 2020, according to their Annual report 2018. Although the retailer reached roughly 95% sustainable supply in 2018, the commitment to sustainable cotton is part of a larger plan to convert to 100% recycled or sustainable materials across the company’s supply chain by 2030. 57% of the retailer’s 2018 materials met this standard, an increase from 35% in 2017.
As part of the same initiative, H&M has also announced plans to phase out conventional cashmere on environmental and animal welfare grounds.
“Our size and our long-term approach mean we can support innovative sustainable solutions, including the development of new textile fibres, collaborating with partners to help make the innovations scalable”.
There is no doubt sustainability has become an integral part of the procurement and sourcing function. Is your company in need of an sustainability expert? Get in touch today.