Sustainable sourcing - Mission (im)possible?
MIBAS Debates Summary: Sustainable Sourcing
In today’s economy, companies are continuing to expand globally which affects stakeholders worldwide and makes sustainable sourcing a critical topic for discussion. Sustainable sourcing helps secure suppliers and reduce risk with the ultimate goal of building strong, long-term relationships with suppliers. For many companies, working toward this goal has become an extension of their commitment to corporate responsibility. The 14th MIBAS Debates event sought to critically reflect upon sustainable sourcing and its impact on companies operating in an increasingly globalized market.
At the evening’s event, four experts were invited to share their insights about how they address the challenge of sustainable sourcing within their organizations. Sonja König, head of corporate responsibility, and Jochen Michalak, head of legal, represented the Neumann Kaffee Gruppe (NKG). As the leading green coffee service company, NKG has more than 2 million smallholder coffee farmers in its supply chain. In its role as intermediary NKG thereby stands for a balance between the sometimes-different interests and possibilities of producers and consumers. Furthermore, Anna Rüchardt, a recent MIBAS graduate who now works for Cotton made in Africa (CmiA), contributed to the debate. As an initiative of the Aid by Trade Foundation, Cotton made in Africa seeks to improve the livelihoods of African smallholder cotton farmers through trainings in sustainable agricultural practices and trade. The final guest was Andreas Zamostny, the co-founder and managing partner of the consulting company Schlange & Co. He shared insights from his longstanding experience consulting with companies on sustainable sourcing as well as corporate responsibility and sustainability topics.
One of the common ways how companies address corporate responsibility within the supply chain is the implementation of a supplier code of conduct. While this approach may work for many businesses, both the Neumann Kaffee Gruppe and Mr. Zamostny raised questions about a pure compliance-based approach. Both stressed the importance of knowledge transfer and continuous education of suppliers so that the values reflected in these documents are understood and can be upheld by all parties. Mr. Zamostny added that many companies include topics for the code from their clients’ requirements, which can result in the document losing its value, or reflecting standards that may not apply to the company. Furthermore, Mr. Zamostny advocates that raising awareness amongst suppliers and continuing to build trust between buyers and sellers is key for sustainable sourcing. Neumann Kaffee Gruppe, who is dealing with a flood of different individual supplier codes of conduct, highlighted the importance of not just passing them on to the farmer “to be signed”. One needs to make sure to not just pass liability risks further up-stream by giving the farmer something to sign that she or he might even not be able to understand. Cotton made in Africa, on the other hand, is an independent sustainability standard within the cotton industry that comprises a set of sustainability criteria for cotton farming and ginning which cotton companies and farmers must uphold in order to receive the CmiA certificate and be part of the initiative. To ensure its authenticity, the CmiA standard is verified in audits conducted by independent third-party auditors.
Another aspect discussed during the evening’s debate was the role of consumers in shaping sustainable supply chains. Ms. Rüchardt mentioned the importance of growing demand for sustainably sourced cotton, and therein stressed the power held by consumers. While public attention in the cotton and textile industry often focuses on critical conditions in textile factories, Cotton made in Africa goes back to the very first steps of the supply chain and tackles problems on the cotton fields and in cotton ginneries. In discussing the issue from the perspective of both Cotton made in Africa and Neumann Kaffee Gruppe, it became clear to the students, just how diverse and complex supply chains of our daily products are.
While the topic of sustainable sourcing is difficult to tackle, there are many opportunities for companies to really have an impact on their supply chain. All speakers agreed that the topic of sustainability has become much more relevant for consumers during the last years which promotes the development of sustainable sourcing in various industries. Although there are still many complex issues that must be addressed within global supply chains, when looking at the progress achieved so far, the speakers feel optimistic about the future of sustainable sourcing.