Supply chain sustainability: Sedex shows the way
The Rana Plaza factory collapse in Bangladesh and the horsemeat scandal that swept Europe have put global supply chains firmly in the public eye in recent years. Ellie Ward talks to Jonathan Ivelaw-Chapman, CEO of Sedex, which is the membership body on a mission to ensure socially responsible supply chains become the norm.
Sedex is a not for profit membership organisation set up to drive improvements in working conditions and to promote more effective ethical data sharing in global supply chains.
It does this by providing members with frameworks, systems and guidance on how to collect and analyse information to keep track of suppliers’ performance to ensure that socially and environmentally responsible standards are being met. It also works with suppliers providing them with efficient and cost effective ways of sharing information about their social and environmental standards with their customers.
Pioneers Post talks to the CEO of Sedex Jonathan Ivelaw-Chapman ahead of the 2016 Sedex Conference, ‘Simplifying Supply Chain Sustainability’, next month:
Pioneers Post: How has the conversation around supply chain sustainability evolved since you joined Sedex as a non-executive director in 2013?
Jonathan Ivelaw-Chapman: The last few years have seen turbulent times for businesses and their supply chains – from the tragic Rana Plaza factory collapse in Bangladesh, to the horsemeat scandal in Europe, to human trafficking in Thai fishing industry and worker deaths associated with construction projects for the Qatar World Cup.
All these events make it clear that greater transparency in global supply chains is urgently needed, and I’ve certainly seen this being acknowledged more and more within the wider business community since I joined Sedex. For any company which is part of a global supply chain, the risks of not knowing your lines of supply can be enormous, so it’s a positive development that we are seeing more and more examples of how companies are being proactive.
Rana Plaza factory collapse, Bangladesh. Photo credit: Jaber Al Nahian
PP: What common challenges do you see businesses facing in trying to ‘clean up’ their supply chains?
JIC: Taking a holistic approach to supply chain sustainability is challenging, but vital. From environmental, to human rights, to social issues affecting workers and global supply chains, there are plenty of issues to be considered when doing business. Although these are separate topics, they are very much interlinked. While focused, issue-specific approaches are necessary, in addition businesses need to identify synergies between topics, themes and approaches, rather than looking at these issues in silos.
Gaining transparency is also another common challenge. Supply chains are large, multi-tiered and complex, with major risks occurring in the deeper layers of supply chains. Companies need to know their supply chains by mapping their suppliers and then working towards making sustainability business as usual – from audits, training & capability building, to reporting, insights & alignment and continuous improvement. There is no magic bullet that is going to fix the complexity of global supply chains – neither auditing nor supplier training by itself will be enough. It will be an aggregation of them all – viewed holistically – that will build to a clearer, more simplified picture.
PP: Which companies are leading the way when it comes to ensuring their supply chains are both sustainable and socially responsible?
There are many great examples of supply chain sustainability among our 38,000 Sedex member companies – from smallholder suppliers to multinational corporations. It is indeed important at both buyer and supplier level. M&S, Nestle and Mars are great examples of big brands which are making progress, but equally we see a lot of forward-thinking smaller suppliers being innovative in this area.
PP: What will it take for businesses to consider social impact reporting as important as financial reporting?
JIC: Companies are under increasing pressure to conduct due diligence on the supply chains that extend beyond their immediate suppliers. Pressure from NGOs and consumers play a vital role. This is especially visible with millennials – a younger generation of consumers who view brands as extensions of their own values. They are more responsive to sustainability actions, are interested in the good of planet and profits, and crucially, won’t work for companies they perceive to be unethical.
It needs to reach board level – and forward-looking companies already recognise this. More and more companies are already committed to delivering positive social, environmental and economic change as part of their business activities. If, just a decade ago, social investment was mainly focused on one-off charity events and projects, more companies are now being proactive in driving social value and looking how it is linked to clear business priorities.
Social impact can be delivered in a number of ways, including an investment-led approach and through other activity, such as partnerships on projects that help businesses to succeed and empower communities. At our conference in March we will be looking futher into how can organisations simply and effectively quantify, value, and improve their impact on society.
PP: Which specific sessions and discussions are you most looking forward to engaging in at the Sedex Conference 2016?
JIC: I think all the sessions will be very interesting especially as there is a practical theme to the conference on simplification, giving participants at least one key take away from every session. This will be our largest conference so far, bringing together hundreds of brands, retailers, suppliers, auditors, NGOs and government for two days of discussion, insight and practical advice – all with the aim of simplifying supply chain sustainability.
The conference agenda will cover the most relevant topics for supply chain sustainability – from modern slavery legislation, to how organisations can quantify, value, and improve their impact on society, to best practice in agricultural sustainability measurement. At all sessions throughout two conference days we will be looking at how technology can help to simplify sustainable supply chain management. Coming from a technology background, I’m very much looking forward to these discussions.
Jonathan Ivelaw-Chapman. Photo credit: Sedex
PP: You took on the role of CEO of Sedex in 2015, what are your priorities for the next five years? Do you have any specific goals that you would like Sedex to achieve by 2020?
JIC: Sustainability is becoming a complicated space with many new and sometimes competing initiatives, frameworks, certifications and schemes, creating silos in industries, countries and topic areas themselves. The challenge for Sedex is to help our members to navigate this increasingly complex sustainability world.
What is needed is a new approach to simplify human rights and environmental issue management – not just recognising how issues are connected within a business, industry, community or supply chain, but using that knowledge to simplify our approach to tackling them.
Coming from the technology industry, where for many years, language and behaviors were all about self-justification and increased investment, I now sense that industry exiting the “hype” that we have all experienced. I want to help avoid any similarities to the IT industry, by bringing clarity, and affordability into the sustainability industry. We will do this by simplifying our language, facilitating opportunities to work collaboratively, and giving our members an industry roadmap, with a vision of the way responsible sourcing can work. Sedex is committed to making it simpler to do business that’s good for everyone.
Buyers come to us because we make it simpler to see how their supply chain is performing, to manage risk and to identify opportunities for improvement. Suppliers join us because their information can be shared with multiple buyers in an industry-standard format, reducing duplication and simplifying their internal processes.
In the next five years we will continue collaborating with organisations across the board and developing the technology needed to simplify supply chain sustainability.
The 2016 Sedex Conference will take place in London on 2-3 March. It will include speakers from multinational companies such as Kellogg’s, Mondelez International and Mars, to organisations such as International Trade Centre and Thomson Reuters.
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