Ten years ago, Norway-based Telenor Group transformed its approach to supply chain sustainability. To mark this anniversary, Telenor commissioned BSR to review lessons learned and consider what direction both Telenor and the broader telecoms industry should travel over the next 10 years. Telenor’s supply chains include thousands of suppliers around the world, which provide goods and services ranging from IT equipment and devices from global suppliers to a wide range of local services needed to build and run the network, including construction and maintenance. In addition, suppliers are needed in areas such as digital services, brand and marketing support, and outsourced customer services and business processes.
Informed by this work, today we are sharing our thoughts on relevant global shifts transforming telecommunications supply chains and best practices for companies in the industry to improve supply chain sustainability in the future.
Three Global Trends
Three key trends are likely to influence the future of sustainable supply chains in the telecommunications industry—new technologies and digitization, climate resilience, and large-scale human migration.
- New technologies: Innovations and digital advances are revolutionizing supply chain management across industries, and more companies today are using technologies like automation, artificial intelligence and machine learning, blockchain, and augmented reality to supplement traditional approaches. There are opportunities to consider how new technologies can increase financial incentives for suppliers that are performing well on social and environmental indicators—for example, blockchain technology and financial technology solutions are making it easier for companies to gear their supply chain finance mechanisms more readily toward incentives for these high-performing suppliers.
- Climate resilience: While it’s impossible to predict the exact effects of climate change, it’s clear that supply chains are vulnerable to global warming, especially for those companies with operations and infrastructure in countries that are already experiencing more frequent and severe weather events. Over the past decade, the telecommunications industry has done an impressive job building climate resilience, and networks are increasingly able to withstand severe weather events. Looking to the future, telecommunications companies have an opportunity to expand their approach to climate resilience by focusing on opportunities to deploy telecommunications networks and digital services in ways that support the resilience of other industries.
- Large-scale human migration: Companies will also need to prepare for the burgeoning trend of human migration at a massive scale. More than 240 million people now live outside their country of birth, and a record number of people have become refugees. This is already affecting many companies. While local contexts vary significantly, migrant labor presents risks in both emerging economies as well as in developed markets. One of the biggest risks is that migrant workers represent a vulnerable group requiring special protection. Often, these people may not be aware of their rights, or they are willing to take jobs where rules and regulations are not followed. As a result, they might be paid under the table in cash, they might be paid below the legal minimum wage, or their employers may force them to work excessive hours or in unsafe conditions. It is important for companies to identify and eliminate these violations, and it’s also important for companies to invest in strategies to create decent jobs that integrate migrants into the workforce, develop their skills, and give them opportunities to make positive contributions to society.
What Companies Can Do
We recommend companies dig deeper on impact—encourage more local ownership, connect more deeply on key issues, and create change for rights-holders.
A dedicated company’s efforts in an era of rapidly accelerated change has the potential to create value for its business, its stakeholders, and society at large. Our recent work with Telenor illustrates how companies can act within their own boundaries, enable relationships with stakeholders, and influence policy change to advance sustainable business goals, drawing from the “Act-Enable-Influence” framework articulated in Redefining Sustainable Business: Management for a Rapidly Changing World.
We recommend companies dig deeper on impact—encourage more local ownership, connect more deeply on key issues, and create change for rights-holders. We also suggest more proactive engagement with global peers and suppliers in collaborative efforts, such as advocacy for necessary policy changes.
Our additional guidance for companies includes the following:
- Companies can act by taking local context into account in risk assessments, audits, inspections, and capacity-building, as well as by prioritizing efforts based on risk to the rights-holder (i.e., supply chain employee), rather than risk to the business. This focus on risk to the rights-holder rather than risk to the business is consistent with the expectations in the UN Guiding Principles on Business and Human Rights.
- Companies can enable change by creating and participating in local collaboration platforms among telecommunications companies and their suppliers, as well as with other industries and key stakeholders. This can also include making the case for more telecommunications operators, including local competitors, to join relevant industry associations and strengthen their ability to drive industrywide change.
- The telecommunications industry can influence change by adopting an advocacy agenda that represents the complete company and industry value chain. This means promoting rule of law and good governance, especially effective enforcement of labor, health, safety, environment, and anticorruption regulations.
If you’d like to connect with us to learn more about our work on the future of supply chain sustainability, please don’t hesitate to contact us.