Ten key supply chain sustainability stats and facts, April 2016

Innovation Forum’s Supply Chain Risk & Innovation briefing, published ten times a year and beautifully and simply laid out, analyses the latest supply chain sustainability news, digests need-to-know industry reports and looks at sustainable business innovations and key campaign trends to look out for.

IF Supply Chain Risk & Innovation

Original insight, boiled down and summarised for the busy manager.

In the April issue, we examine the use of carbon credits by AkzoNobel, discuss supply chain mapping with Golden Agri-Resources, talk packaging innovation with Dell, and look at responsible sourcing by NovoNordisk. In our campaigns piece, Action Programme for Responsible Sourcing discusses ethical procurement in the construction sector. And we examine timber supply chain risks and prioritise implementation of the UK’s Modern Slavery Act for all businesses across all industries.

Here are the top 10 takeaways from April’s issue:

  1. AkzoNobel is demonstrating a first for the shipping sector by awarding carbon credits to ship owners that convert to a biocide-free advanced hull coating. The Intersleek coating is proven to increase operating efficiency and reduce carbon dioxide and associated emissions by an average of 10%.
  2. Golden Agri-Resources has mapped its Indonesian palm oil supply chain back to 489 individual mills, 445 of which are owned by third parties. GAR say the next step is to go beyond the mills, and find where they are sourcing from at plantation level, down to the fruit – a big investment that will help secure the company’s long-term supply.
  3. Dell has committed to publishing the results of their supplier audits online – 144 facilities were audited in 2015, and the most common non-conformance was excessive working hours (working in excess of 60 hours, as stipulated by the Electronic Industry Citizenship Coalition Code).
  4. Novo Nordisk is a company that prides itself on its “triple bottom line” approach as a way to continually optimise its business and contribute to wider society. Having reported on its environmental performance for over 20 years, Novo Nordisk’s targets are set to align with the 2C target that national governments signed up to at COP21 in Paris.
  5. The construction sector has seen a demand for ethical sourcing policy, which Action Programme for Responsible Sourcing (APRES) has helped take the lead on, developing a manifesto for ethical sourcing in the construction industry. APRES warns if companies don’t know where their materials are coming from they face potential legal, reputational and knowledge risks.
  6. Timber can be a carbon-neutral material if grown sustainably – however there is still a lot to be done in the industry. In 2012, Gibson Guitars paid up $350,000 for importing illegally harvested wood from India and Madagascar; in 2015 illegal logging made up 10% of total wood trade.
  7. Modern day slaves generate $150bn through their labour each year. More than half are women, and around one in four are children. The US alone has an estimated 60,000 victims and 71% of global companies believe there is a likelihood of modern slavery occurring at some stage throughout their supply chains. With the UK Modern Slavery Act in full force, NGOs are going to expose those companies not taking the issue seriously.
  8. Since 1990, Indonesia has lost 31m hectares of forest, an area more than three times the size of Portugal. According to Greenpeace, many global consumer companies are still unable to say whether they source palm oil that is linked to deforestation in Indonesia – so there is still much room for improvement.
  9. Morningstar has developed a new rating of funds based on environmental, social and governance data: the Morningstar Sustainability Rating. In 2015, $59tn worth of funds acknowledged the importance of ESG factors.
  10. Blockchain could change the future of supply chain transparency, as it develops a model called Decentralised Application to enable secure traceability of certifications and other salient information in supply chains, creating product passports.

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