What lies beneath…your supply chain?
What lies beneath…your supply chain?
The New Zealand Business Council for Sustainable Development (NZBCSD) today launches one of the first comprehensive studies in the world into how companies can create a more sustainable supply chain and the business benefits for doing this.
Stephen Tindall, Chair NZBCSD explained the rationale for the project: “There is probably not a single New Zealand business that isn’t both a supplier and a customer. Sustainable development is about economic growth that takes proper account of environmental effects and is socially responsible. To be effective it needs to extend from an individual organisation both up the supply chain to its suppliers and its supplier’s suppliers and down the supply chain towards the customer and their customers. This can be a huge ask for companies.”
The NZBCSD guide is designed to explain the business case for reviewing and auditing an organisation's supply chain and to provide practical tools that can be adapted by individual companies to meet their own needs. These include templates for codes of practice to be used with suppliers as well as internal assessment tools.
The project has involved over 20 New Zealand
organisations which are engaged in sustainable development
and also draws on best practice examples from overseas.
There are three principal focus areas – procurement,
including traceability back to raw materials; internal
logistics and product design/product stewardship. Each
chapter has been written for the professionals responsible
for the specific area.
Tindall said that the challenge for New Zealand business is clear: “We have an image overseas of a clean, green country with products and services to match. With food and drinks export sales alone in the region of $14 billion we stand to lose a lot if we can’t demonstrate to our customers around the world that we practice what we preach.”
The Guide includes examples of sustainable practice fuelled by customer demand. Eric Barratt, Managing Director, Sanford Sustainable Seafood reports increased prices for “sustainable hoki” in Europe because there is a shortage of suppliers with the appropriate accreditation: “There is an enormous opportunity for New Zealand sustainable fisheries with Unilever, Young’s Blue Crest and even the UK’s Little Chef restaurant chain all using New Zealand’s “fresh and wild” image to market Marine Stewardship Council Hoki which was the world’s first large whitefish stock to achieve MSC certification”.
The NZBCSD cites two principal factors, which will drive a more sustainable supply chain. Firstly, national and local government has a major opportunity and responsibility to influence because of its own procurement budgets. Central Government spends $2.5 billion per year directly on procurement. Including specific environmental and social as well as economic objectives for their suppliers would help make sustainable development mainstream.
The Guide outlines the steps taken by Christchurch City Council in this direction. Ken Lawn, Director of Operations, Christchurch City Council is clear about the challenge: “Unless sustainable development criteria are added into the procurement process by local authorities, there will never be a level playing field. We commit in our Annual Report 2003 to taking into consideration social and environmental impacts when making decisions to create a sustainable city for the future and so introducing this into our procurement policy where possible has to make sense.”
Secondly, global retailers and brand owners have the power to make it happen. In Europe the top 30 grocery retailers account for 67 percent of the total retail sales of NZ dollars 1660 billion with the leading ten European retailers representing 40 percent of total retail sales. Most of these retailers now examine the sustainability of their supply chain. New Zealand’s export market is dependent upon global customer/ consumer practices and the guide provides evidence that these increasingly require sustainable supply chains and traceability.
The NZBCSD Guide to a Sustainable Supply Chain is the latest in a series of NZBCSD Guides to Sustainable Practice. It will be rolled out to members and the wider business community through workshops and seminars. Companies can download the guide and use the interactive tools on www.nzbcsd.org.nz/supplychain.
The NZBCSD was established in May 1999 and is a coalition of 44 leading businesses with a shared commitment to sustainable development. It is a partner organization to the World Business Council for Sustainable Development which is an alliance of 165 international companies, from more than 30 countries.
Project Participants: City Care, Griffins Foods, Hubbard Foods, Landcare Research, Sanford, Shell, TheWarehouse, Urgent Couriers. In addition a number of organisations have contributed to the content of this Guide including: Fonterra, Richmond, Progressive Enterprises, Toyota, Vodafone, Ministry for Environment, Christchurch City Council, Auckland Regional Council, North Shore City Council, Transit, NZ Police