I’m a supply chain expert, not an environmental scientist. So, when I was charged with making my company’s supply chain more sustainable, I had no idea where to start. It took a long time to gain any traction. Every company has different operations and unique supply chains. Therefore, I can’t suggest an approach that will work for you. However, I can give you a few pointers to get you started on your sustainability journey.
Step 1: Choose your targets, pick your battles
The first step in improving the sustainability of your supply chain is to understand your organisation’s impacts. “Sustainability” is an umbrella term encompassing a wide range of things including greenhouse gas emissions, resource use, air/water pollution, health and safety, animal welfare, fair labor practices, and end-of-life-cycle disposal. An understanding of your impacts informs where to put your resources when crafting a sustainability programme.
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Next, you must identify which of these negative impacts to mitigate. You can’t fix everything all at once, so you have to choose one or two things to start working on. This usually requires you to balance competing factors. What is the most serious impact? What impacts am I able to affect? What effect will improvements have on my business? Where is the bang for the buck?
Step 2: Understand your supply chain
As supply chain sourcing manager at Quality Bicycle Products, I was charged with making our supply chain more sustainable. My first goal was to gain a deeper understanding of our supply chain. This meant delving into all the impacts that my supply chain had on the environment and communities.
I was already conducting process and quality audits of our suppliers at this time. With my new responsibility, I began asking suppliers about their practices surrounding sustainability. To craft an effective sustainability programme, it’s not enough to only investigate your direct suppliers. You may need to look far upstream in your supply chain to find out where the real environmental or social damage is happening, which is not easy. Suppliers may be reluctant to share information about their supply chains because they often consider that a competitive advantage. Upstream suppliers are often reluctant to share information with you because you are not their direct customer. This is even more likely in industries or geographies where environmental or labour issues are common.
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Questionnaires and in-person audits are a good way to understand your supply chain. There are five key areas of sustainability that can be addressed in audits:
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By GlobalData- Health and safety. This includes health and safety of workers, end users, and people living near the factory. For example, does the company have proper ventilation, personal protection equipment, and sprinklers and fire extinguishers? I often asked for records such as safety incidents in the past month. A lot is said by a lack of good recordkeeping.
- Waste. How does the company deal with its waste such as spent oil and wastewater? Is wastewater cleaned? Stored? Is the company licensed to dispose of wastewater or is it contracted with a licensed waste-removal company?
- Labor. This category includes issues such as compensation, working hours, child labor, forced labor, collective bargaining, and disciplinary practices. Labor issues are not as cut-and-dried as they may seem. You need to consider local customs, as well as national laws and global norms. For example, factory audits often find that Chinese employees consistently work overtime that exceeds global guidelines. However, the workers welcome the overtime and will quit if they don’t get enough of it.
- Resource usage. Does a factory track its use of water, electricity, and natural gas? Does it have a programme to reduce the use of these resources? Is there a person assigned to this programme? A shortcut to finding out whether a company takes its energy usage seriously is to simply ask, “Is someone assigned to minimise resource usage?” Be sure to consider the entire life cycle of resources (i.e., what is recycled and what is thrown away).
- Transportation and logistics. This category is a complex metric that includes types of vehicles or transportation used, types of fuel used, and fleet management.
Audits are time-consuming and challenging. One of the greatest challenges is that many suppliers do not keep good records, or they don’t want to expend the time necessary to supply the requested information, or they consider the information proprietary. It can be hard to get suppliers — especially ones you rely on — to change their behaviours. It is much easier to develop policies, procedures, and reporting requirements when entering a relationship with a new supplier.
Step 3: Make use of existing standards
It’s unrealistic to think that you can become an expert in international standards and conduct comprehensive audits of every aspect of your supply chain. What you can do is become well-versed in industry standards that assure you that a company can back up its claims with third-party certification.
A few examples are OEKO-TEX and bluesign, global standards designed to ensure sustainability and transparency in the textile industry. OEKO-TEX also applies to the leather industry. The Responsible Wool Standard focuses on animal welfare, land management, and social welfare practices in the global wool trade.
Social Accountability International’s (SAI) SA8000 ensures abidance of “internationally recognised standards of decent work,” addressing issues such as child and forced labor, occupational health and safety, the right to collective bargaining, and pay and compensation.
NQA’s ISO14001 is an international standard for environmental management systems that can be used to ensure compliance with statutory and regulatory requirements.
If a supplier can demonstrate that it complies with relevant international standards for sustainability, you may not have to conduct an audit. Furthermore, auditing firms specialise in this work and can speak the local language. They have standardised reports that make it easy to compare suppliers. Sometimes suppliers will share third-party auditor reports that they commissioned themselves or that another customer requested, saving you time and money.
Step 4: Seek out like-minded partners
You may find some partners are just not that into you now that you are working to become more sustainable. Think of that as a favour. It frees you up to find new partners that share your values.
Consider technical textiles that are infused with properties that improve — and even protect — lives that have traditionally been made using toxic chemicals. New eco-friendly products and processes have been developed that provide the properties the marketplace demands without harming the environment. Finding such partners is a great way to help you meet your sustainability goals.
Take, for example, Claros Technologies, which developed ZioRay, an OEKO-TEX-certified process that infuses natural and synthetic textiles with ultraviolet protection factor (UPF) without the use of any harmful ingredients. ZioRay has a smaller footprint because one drum of it goes a long way. In addition, the UPF property does not wash out, which means it lasts for the life of the product. Claros also has developed environmentally safe and durable processes that provide antimicrobial, moisture-wicking, and odor-resistant properties.
Finding eco-friendly partners relieves much of the stress and hard work of reaching your sustainability goals.
Good for business and the environment
I’ll leave you with one final thought: Put sustainability front-of-mind in your sourcing efforts. Embarking on a sustainability journey once you have an entrenched network of suppliers is a worthy thing. However, making changes to an existing supply base is hard. It’s much easier to reduce impacts by requiring sustainable practices from your very first suppliers — or, at least, from your very next supplier.
Making your supply chain more sustainable is a big job that requires perseverance. It’s a long-term endeavour that takes support from top management and other stakeholders in your company. Researching and understanding your environmental impacts, conducting audits, using accredited industry standards, and enlisting third-party auditors and environmentally sound suppliers can help meet your goals. When done right, sustainability practices please the C-suite, as well as business partners, consumers, and even regulators.
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About the author: Will Hutchinson is director of supply chain for Claros Technologies. He has 20 years of leadership experience in all aspects of supply chain management. Will specialises in international business, having spent years living and working in China and having worked with suppliers across Asia, Europe, and the Americas.
