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Developing a sustainability programme for your supply chain

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Managing the environmental and social impact of your own operations is expected and enforced, but the greatest opportunities for reductions are typically outside direct operational control, in the supply chain. However, looking outside of the direct operations comes with considerable challenges in terms of measurement, management and influence. To overcome these challenges companies must look to embed ‘sustainability’ into the sourcing or procurement process in a consistent manner, alongside the traditional criteria such as cost and quality. This is best achieved through an effective sustainability programme.

In this article Leslie Berger, an ADAS Agri-food consultant, set out to simplify the steps needed for food businesses to develop bespoke sustainability programmes and meet their sustainable sourcing goals.

Developing a sustainability programme for your supply chain

It’s not enough to simply set sustainable sourcing goals, you need to have a plan in place to guide your business in reaching these goals through a programme of supplier engagement. This plan can be formulated by following a few reasonable steps:  

  1. understanding the risks that are unique to your supply chains
  2. being aware of your suppliers’ production/procurement practices
  3. improving relationships with suppliers to extend your knowledge and influence

Through this process, proactive food businesses look for ways to capitalise on the rising demand for their products and potential for increasing market share, while strengthening their credentials for building sustainability and longevity into their brands. 

Examples of successful sustainable agriculture  programmes

Nestle has developed its business in a way that safeguards natural capital, in particular biodiversity and ecosystem services. Nestle focuses on water preservation, natural resource efficiency and climate change adaptation, working directly with farmers through their Farmer Connect Programme.

Unilever, through their Sustainable Agriculture Code, has provided a check list for all suppliers and farmers to monitor continuous improvement.  Unilever’s focus is on soil health, water, biodiversity, safe agri-chemical use, energy and waste.  All suppliers are encouraged to monitor GHG emissions using the Cool Farm Tool.

Key drivers towards sustainable sourcing

International commitments being included in national legislation| The Sustainable Development Goals and the agreement reached in the Paris Climate Change Conference have put pressure on national governments. Tightening national legislation is raising the minimum standard expected from businesses and can help to incentivise good practice.

The increased importance of responsible investment| Investors in the food sector push for sustainable business practices and have developed tools such as the FTSE4Good to identify companies with high sustainability standards.

Consumer and client expectations| Consumer awareness of how food is produced is increasing with consumer groups and NGO’s lobbying against a range of food related concerns including intensive ‘factory farmed’ production practices, reducing world hunger and responsible use of natural resources in production.  

Voluntary agreements and multi-stakeholder initiatives| National voluntary agreements such as Courtauld 2025 (in the UK) have been developed to encourage retailers and manufacturers to reduce GHG emissions, water and waste. 

 

 

ADAS’ technical grasp of agricultural production and supply chains makes us well placed to work with our food sector clients to develop bespoke sustainability programmes to help demonstrate the achievement of their sustainable sourcing goals. In figure 1, ADAS has set out some of the key steps to be taken in designing a bespoke sustainability programme. Some of the key considerations in the design phase are set out below.

 

 

Figure 1: Key steps to be taken in designing a bespoke sustainability programme

Before designing a sustainability programme it’s important to know what the risks are that your company faces with regard to sustainable production.  Sustainability risks are unique to each business and depend on the mix of raw materials sourced, geographic location of production, farming practices of your suppliers, and competing pressures for resources.  

A sustainability programme can be broad and overarching covering a range of issues or can be narrow and goal specific. For example, if your programme is to cover crops, your risk factors could include water use, soil health, pesticide availability, biodiversity, and energy consumption.  If your suppliers are producing livestock for meat and animal products, risk factors may include GHG emissions, animal welfare practices, waste management, and water quality.

The design of any sustainability programme will depend upon the level of engagement the business has with suppliers, and the degree of influence over its raw material supply chain.  It needs to be about open communication, sharing resources and experiences and working together to overcome mutual challenges.

Sustainability programmes can be designed to work with a sub-group of suppliers.  If, for example, a group of high risk suppliers have been identified, perhaps due to high non-compliance rates uncovered during supplier auditing procedures.

Having a sustainability standard in place does not necessarily bring about the required change in on-farm practice.  One of the key elements in the process is establishing a programme of change to set out specific activities, interventions or incentives to support farmers in achieving the desired goals.  It is important that these programmes are collaborative, not just prescriptive to build good supplier relationships that foster mutual trust.

To discuss how ADAS can support your business in putting a bespoke sustainability programme in place, or to further develop existing programmes to help you achieve your sustainable sourcing goals, please contact Leslie, leslie.berger@adas.co.uk.

About the author: 

Leslie Berger is an Agri-Food Consultant on the Sustainable Food and Farming team at ADAS.  Prior to joining ADAS Leslie worked with the US Department of Agriculture’s Foreign Agricultural Service focusing on agri-food trade, international marketing, and trade policy.  Leslie works with a wide range of food sector businesses and industry organisations to help strengthen supply chains and to promote sustainable sourcing.

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