How can enterprises attempting to shoulder this corporate responsibility demonstrate transparency to build trust? How do they gather evidence to prove they meet international environmental impact targets? We think transitioning supply chains to become data-driven can help.
Changing the approach
Consumers worry about environmental and social impact and want the businesses they support to reflect these concerns. This is true in every market. A B Lab UK poll found 72% of the UK population believes business should have a legal responsibility to the planet and its people, as well as a drive to maximize profits. The Co-op’s Ethical Consumerism report shows ethical spending hit $41 billion in the UK in December 2019.
These expectations come as trust in traditional institutions, media and government declines. A 2019 Edelman Trust report shows that businesses are more trusted than governments in every nation outside China. That same report also reveals 67% of consumers won’t continue purchasing from a company unless they come to trust it. A recent Vox EU analysis found companies with strong economic and climate strategies do better, even in a bear market, negating conventional wisdom that pursuing such agendas hurts shareholder value.
This is the background in which COVID-19 recovery will take place. This changing consciousness demands a change in approach. Chris Turner, Executive Director of B Lab UK, explains: “The idea of profit maximization has only been around for the last 50 years, and that has led to unsustainable business practices that have contributed to huge inequalities and the climate emergency.”
Don Tapscott’s Naked Corporation argues that far from being a constraint, transparency is a development opportunity that smart management can exploit to build strong connections with stakeholders and unleash new business opportunities.
Technologies that can help
Farmer Connect is a project that makes use of blockchain to connect consumers with farmers. The chain becomes a repository of data pertaining to products like coffee, such as where it is grown and how it is distributed. The information is made available to consumers using a smartphone app that can scan product QR codes.
With one billion items sold each day, 500 factories across three continents and thousands of suppliers, ranging from smallholdings to larger corporations, Nestlé is using a raft of technologies to gather accurate supply chain data as it works toward environmental and supply chain commitments, including transparency around use of commodities such as palm oil.
Nestlé Manager Benjamin Dubois told Hello Show by Orange Silicon Valley how technologies, including satellites, connected sensors, data analytics and blockchain, help create a real-time database of business activity across its vast and highly-complex supply chain. The company also works with partners (such as the WWF) to build accuracy and trust.
Even a company the size of Nestlé does not have the capacity to build such solutions on their own. This creates opportunities for agile startups to provide large enterprises with transparency as a service, for example:
Supplyshift provides a software network platform to help manage and deploy transparent supply chains. It consists of a suite of data gathering and analysis tools, dashboards and assessment solutions that provide intelligence and visibility right across the chain, based on a range of data inputs, including self-assessment. Supported by some of the world’s biggest brands (including Walmart), it has been built to deliver the insights businesses need to improve supplier performance across numerous social and environmental sustainability issues, supplementing this data with expertise from industry groups, NGOs and consulting partners. Given many suppliers operate with multiple purchasers, the idea is that a company only needs to provide data once to share it across their client base.
Planet Labs and Sobloo maintain constellations of low orbit Earth satellites capable of capturing and analyzing geospatial data. Buoyed by advanced computer imaging technologies, such as spectral imaging and digital image processing, this information helps in various domains, including agriculture, marine, tourism, urban planning, environment, energy and natural resource management. Satellite imaging can reveal a great deal of information, including soil condition analysis, water stress and irrigation system failures as well as generating early warnings of big challenges, such as deforestation or water conservation.
Agrosmart is Latin America’s leading agricultural digital platform based in Brazil. It provides smart farming solutions using a range of technologies, including blockchain, AI and data analytics, for use across the agricultural value chain. It gathers data from multiple sources, including soil sensors, drones and satellite images, to build intelligent analytics models to both improve farm management and help large clients, including Cargill, Syngenta and Coca-Cola, monitor and benchmark supply chains. One of the unique selling points of this solution is that, despite its complexity, elements of it are made available as a smartphone app, enabling even small holders to take part.
What’s remarkable about all these approaches is their growing acceptance of the need for shared data stacks, partnerships and close working relationships with NGOs and issue-focused government organizations. Supported by connected technologies, from satellites to drones, IoT and AI to soil sensors and robust data analytics systems, this combined expertise empowers businesses with data-driven decision making and transparent proof for consumers, NGOs and others of work done. Many of the world’s biggest companies (Microsoft, Apple, Ford and others) are making use of such supply chain analysis and transparency systems in their work to meet zero-carbon targets by 2030.
According to the recent supply chain survey by Orange Business, half of enterprises are investing in data collection technologies to give better insight into key sustainability targets, and 59% are using digitalization to manage their energy usage better.
“The first wave of corporate environmental sustainability was focused on internal operations. The second wave, that we are seeing now, is shifting to supplier networks. This is a major technical challenge for international companies, but also a singular opportunity to remedy the negative side-effects of globalization,” said George Livingston, Orange Silicon Valley.
Watch this webinar, Next Normal: Sustainability with George Livingston, Principal at Orange Silicon Valley, Elizabeth Willmot, Carbon Program Manager, Microsoft and Diego Saez Gill, CEO of Pachama, a smart platform for carbon-offsetting and reforestation. And you can read a recap of the 2020 Hello Show by Orange Silicon Valley here.
Then read about sustainability in supply chains in our exclusive survey of global enterprises.