Behind every well-known brand and all its shiny pronouncements on sustainability lies a complex supply chain sprawling across the globe. In many cases it will be poorly understood and barely visible to the brand.
Yet as this Insight shows, it typically generates on average 5 times more carbon emissions than the brand’s own operations. It is a source of growing reputational risk, as the welcome spotlight of transparency is shone into its deepest recesses.
It is vulnerable to a growing risk of geopolitical and extreme weather disruption, and for all the much vaunted benefits of globalisation, it is rarely truly efficient.
Over the last decade, many companies have sought to put a ‘sticking plaster’ over these flaws. Doing more auditing and creating supply chain maps. Joining wider corporate partnerships to share the burden of change in far-away countries. Using new technologies such as blockchain to improve traceability and satellites to monitor forest loss. A few Governments have tentatively set supply chain due diligence requirements on companies who place products on the market (e.g. the UK’s Modern Slavery Act and recent consultation on deforestation in supply chains for commodities such as palm oil and soya).
Yet these fragmented initiatives are dwarfed by the scale of the social and environmental challenges the world faces in the next decade. Partly because they are so deep rooted in the 500-year history of capitalism, reaching back to the horrific trans-national trade in slaves. But also because of the sheer scale of the problem. If even medium-sized retailers can count the number of corporate participants (factories and farms) in their supply chains in the tens of thousands, human participants in the millions, and products produced in the billions, then you get a feel for the enormity and probable futility of today’s triage.
These fragmented initiatives are dwarfed by the scale of the social and environmental challenges the world faces in the next decade. Partly because they are so deep rooted in the 500-year history of capitalism, reaching back to the horrific trans-national trade in slaves. But also because of the sheer scale of the problem.
Only a wholesale re-imaging of what a ‘supply’ or ‘value’ chain means will allow the economy and the millions of corporate actors who participate in it to become much more sustainable. Fewer participants, all of them visible. ‘Adult-to-adult’ rather than ‘parent-child’ relationships. Circular linkages and a fairer allocation of risk and reward between participants. More resilience and redundancy. These are all attributes of a new approach to supply. Easy words to say; much harder to action. Yet those companies which have the courage and ability to create sustainable supply chains in the future will prosper in the future, and those that don’t, won’t.
A word to the wise though. No action, however well meaning, is without consequence. We need to recognise that this positive shift has the capacity to create ‘winners and losers’. The seductive call of circularity, of hire, rental and reuse, of indoor farms and 3D printed products, whilst positive environmentally, threatens millions of jobs from Bangladesh’s clothing factories to Africa’s smallholders. We needed a rounded approach to the sustainable supply chain revolution.