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Thinking globally and acting locally to achieve ethical supply chains

19 mars 2020

Par By Jeff Milder and Sofia Perez

To achieve ethical supply chains, companies must have clear global goals and mechanisms for protecting the environment and human rights that align with norms and expectations agreed upon by civil society, governments, investors, and others.

Thinking globally and acting locally to achieve ethical supply chains

By Jeff Milder and Sofia Perez

You work for a global company with a global supply chain—one that might span dozens of countries, regions, or commodity sectors. So even as you build a coherent approach to managing the big picture, you must also address the unique realities of each commodity origin and context. Your company will likely have business-wide sustainability policies, procedures, and reporting mechanisms but the implementation of these will need to be tailored to diverse situations. 

As an example, consider the production of a chocolate candy bar, which may involve sourcing cocoa, sugar, palm oil, and paper (for the packaging)—four commodities that are likely to come from different countries and landscapes. Each commodity and origin features its own set of conservation and human rights challenges along with relevant national laws and perhaps sector-specific guidelines. Amid this complexity, how do you bridge local, on-the-ground realities with your global goals to achieve the ultimate objective of ethical supply chains?

Picture a game of football. When players and referees step onto the pitch, they follow established rules for the sport. The ball must stay within bounds, only goalkeepers can touch the ball with their hands, and no one is allowed to trip an opponent. Whether you are competing in Italy or Indonesia, in a professional league or a community pick-up game, the same basic rules apply.

But even though everyone understands these universal rules, no match unfolds in quite the same way. One team might move the ball up the field quickly, using long, powerful kicks; another might rely on lots of short, tight passes to maneuver past many obstacles. The permutations are almost limitless, but the objective remains the same: scoring goals while adhering to the sport’s accepted conventions.

Obviously, creating and maintaining an ethical supply chain is no game, and the stakes are a lot higher than those of any football match. But the value of a common rulebook holds equally true.

That’s where the Accountability Framework enters the game. The Framework offers a set of clear, consensus-based expectations and guidelines for establishing ethical supply chain goals, taking action to implement them, and “keeping score” (monitoring progress) over time. The coalition of environmental and social NGOs behind the Framework understood that many companies wanted to do the right thing but were struggling to move the ball forward—in part because of ambiguity about how to implement and monitor global commitments across far-reaching supply chains. 

The Framework helps bridge this implementation gap by clarifying common, accepted elements of ethical supply chains at a global level (e.g., common definitions, reporting practices, etc.) and linking these to a range of practical implementation options that can be selected and tailored to each supply chain context. In practice, this might mean following localized standards or guidelines in certain regions; applying different monitoring tools and traceability methods within specific sectors; or modifying the ways you engage with particular suppliers. 

No-deforestation and no-conversion commitments are obvious examples of the need to link global pledges with local conditions. Companies making such commitments are generally expected to report progress and achieve success company-wide relative to the (seemingly) simple indicator of whether the company’s supply chains contribute to deforestation or conversion. Yet, forest definitions, monitoring systems, and land-conversion trajectories are as numerous as, well, the trees in a forest. To address the myriad potential ambiguities and loopholes that this situation presents, the Framework provides consensus-based global definitions of terms such as forest, deforestation, and natural ecosystem, while specifying how these apply in numerous real-world situations and recognizing credible localized definitions that companies can use in various contexts. 

In fact, the entire Framework follows this same logic: providing a common approach that can be applied across all agriculture and forestry supply chains while offering key details about how to select locally suitable practices that can fulfill global market and stakeholder expectations. 

When it comes to supply chain management, for instance, the Framework outlines four different ways that companies can meet the common (global) expectation to achieve adequate levels of supply chain traceability and control. These include not only full traceability to the point of origin but also certification, jurisdictional or area-level sourcing approaches, and supplier-based control mechanisms. Companies can select from among these approaches (or apply any combination of them) based on the characteristics of their supply chains and use the Framework to help ensure that each traceability solution (e.g., jurisdictional sourcing of a given raw material from a given country, etc.) is sufficiently robust to fulfill company commitments. In this way, the company can be clear that its localized strategies align with its global approach—and that all of these add up to the ultimate goal of ethical sourcing. 

To achieve ethical supply chains, companies must have clear global goals and mechanisms for protecting the environment and human rights that align with norms and expectations agreed upon by civil society, governments, investors, and others. This big-picture view enables businesses to enlist their leadership, train their teams, and guide their suppliers toward a common objective. At the same time, real results usually depend on tailoring a global approach to the localized demands of real places and situations.

The Accountability Framework bridges these two needs, helping companies navigate complexity as they translate global commitments to action on the ground. And unlike a championship football match, it’s possible for everyone to win when companies and their suppliers apply this common rulebook for ethical supply chains.

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