Reporting Back: Sustainability in Supply Chains
What can states and businesses do to drive sustainability in global supply chains? What does it take to make sustainability a core part of any business plan or public operation? We are reporting back from a recent international conference on this topic.
Danuta Kędzierska (TÜV Rheinland Polska), Jaqueline Kacprzak (Ministry of Economic Development), Joanna Szabuńko (Buy Responsibly Foundation), Magdalena Rzeszotalska (Polpharma) and Norbert Kusiak (All-Poland Alliance of Trade Unions (OPZZ) discuss the Polish challenges. Photo: Ministry of Economic Development in Poland.
Jacqueline Kacprzak from the Polish Ministry of Economic Development introduced us to the macro perspective on sustainability in supply chains. She pointed at the shift in understanding corporate social responsibility (CSR) and responsible business conduct in a Polish business context. The day turned quickly to more specific challenges, in particular those related to the global supply chains of mobile phones and their challenges for lifecycle sustainability.
The lifecycle of mobiles
Maja van der Velden from SMART placed social and environmental risks in the production lifecycle of mobile phones in the context of planetary boundaries and the twelve social dimensions.
-Most of the economic activities in producing mobiles take place in developing countries, and both producers and consumers have an important role in extending the lifetime of mobiles to make them more sustainable, van der Velden said.
While Maja’s presentation referred to the risks associated with the sourcing of minerals and materials for mobile production, Julie Timon from the European Commission focused on the new regulations in the field of conflict minerals that came into force in June 2017. Julie also talked about the efforts undertaken by the European Commission to assist and provide guidance to companies to help them improve their practices.
Joost de Kluijver, a practitioner and founder of Closing the Loop, talked about how e-waste in Africa is a business opportunity and not only a challenge that needs to be overcome. Closing the Loop collects and buys old phones in order to strip them from valuable minerals which otherwise would need to be sourced from existing or new mines.
The role of public procurement
The session, moderated by Tadeusz Joniewicz from Responsible Business Forum, looked at solutions and tools that states have at their disposal to ensure sustainable and ethical supply chains. Karin Lonaeus from Nationella Kansliet Hallbar Upphandling and Albert Geuchies from the Dutch Ministry of Education shared their experience and best practices regarding sustainable public procurement. Both emphasized the UN Guiding Principle 6 that highlights the role of public procurement as one of the tools that states can use to implement respect for and promote human rights.
While efforts to choose the best contractors and undertake monitoring efforts are necessary, and while well-designed socially responsible public procurement processes can create huge opportunities for states to drive change, unwanted conditions should not lead to automatic withdrawals from contracts. States should rather initiate Corrective Action Plans with the aim to improve conditions at factories or facilities in question.
Corrective Action Plans is also a tool used by Export Credit Norway to drive improvement in supply chains. Jostein Djupvik, Head of Project and Loan Administration at Export Credit Norway, works to ensure that public funds are used to create sustainable supply chains, both socially and environmentally.
-Companies do not have to be perfect for the agency to provide them with credit, but they have to be willing to change practices that are not compatible with national and international workers’ rights and human rights, Djupvik said.
Given states’ purchasing power and scale, they can successfully influence the social and environmental sustainability of suppliers, help improve performance and rights’ compliance, and promote best cases. Identified criteria for successful collaboration between states and businesses were openness, transparency and willingness to change business practices.
The Polish context
A speech by Dr. Agata Rudnicka from Łódź University, delivered by Anna Szlezinger of Polish Institute for Human Rights and Business, provided an overview of Polish companies’ efforts to address the challenge of global supply chains.
LPP S.A., the biggest Polish textile and ready garments company, outlined the steps they undertook after the Rana Plaza catastrophe in Dhaka, Bangladesh. They also discussed how the catastrophe shaped the future of the garment sector and how it trigged the ACCORD agreement (The Bangladesh Accord on Fire and Building Safety) – a legally binding agreement between brands and trade unions designed to work towards a safe and healthy Bangladesh garment industry.
In contrast, Monika Krawczykowska, founder of the micro-company SLOGAN, talked about how SLOGAN’s very existence is to produce ecological and vegan clothes. Monika talked about the practical sides of how a small company with strong ethical and ecological values can succeed in producing vegan clothing and apparel which meet certification requirements.
What is needed to improve sustainability of supply chains in Poland?
A panel discussion moderated by Danuta Kędzierska (TUV Rheinland Poland) with representatives from public administration (Jaqueline Kacprzak, Ministry of Economic Development), trade unions (Norbert Kusiak, All-Poland Alliance of Trade Unions (OPZZ)), civil society (Joanna Szabuńko, Buy Responsibly Foundation) and business (Magdalena Rzeszotalska, Polpharma) agreed that key to greater sustainability is cooperation, dialogue and knowledge sharing.
While companies should make use of their power to change their supply chains, there is a strong need to educate customers too. Customers ought to be more aware of the fact that almost every product they buy comes from a global supply chain and that their purchase decisions have an impact on the situation of other people and the environment. Public administration needs to engage more strongly in shaping responsible and sustainable approaches through education at all levels, including considering specialized courses at universities or vocational colleges that would prepare future purchase officers to sustainability issues in procurement.
Finally, states should lead by example – not least through more frequent and advanced use of the social and green public procurement clauses. The Polish export credit agency should consider introducing some of the good practices provided by Export Credit Norway.
A global debate
Mark Taylor, from the Norwewgian Fafo Foundation, pointed out that the issues discussed during the conference in Warsaw are a reflection of a global debate. Modern slavery, forced labour and violations of workers’ rights still takes place in global supply chains.
-States, businesses and conscious consumers have the power and tools to affect and change that picture. The nation state has a key role in this as a buyer, investor, regulator, owner and consumer, and transparency on all levels is crucial to make this change happen, Taylor concluded.