September 6, 2018
Authors
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Director, Transformation, BSR
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Tara Norton
Former Managing Director, BSR
It is time for us to acknowledge the challenges with sustainability certification. From a Changing Markets report on the false promise of certification, to a recent University of Queensland study showing slight discernible difference between Roundtable on Sustainable Palm Oil (RSPO)-certified plantations and non-RSPO estates, to the evidence of fair trade’s limited impact in lifting farmers out of poverty, and a Human Rights Watch report questioning the true impact of the Responsible Jewellery Council’s supply chain human rights efforts, various research and journalistic efforts are calling into question the effectiveness of these schemes. With the proof points against some of the most widely-applied certifications stacking up, it’s worth stepping back and thinking through what companies would do in the absence of certification.
In related news, sustainability accounting methods are also being called into question: John Elkington, arguably one of the founders of sustainability, has called for us to rethink the “triple bottom line,” a concept that he created 25 years ago. And this Conservation Biology study points to the significant limitations of ecosystem services monetization in being able to support conservation.
BSR and our sustainability peers are committed to incremental as well as disruptive change, and we can see value in both approaches to moving the sustainability agenda forward. However, at times certification can be perceived and treated as an end itself rather than the means to a goal, which can result in considerable investment of resources by companies with the singular objective of “ticking the box” to ensure they obtain the certifications requested by their buyers. Yet even after certification, there is still much work that needs to be done to ensure a company has actual policies and practices that are sustainable and even more work to ensure that these extend beyond the company itself into the supply chain.
There is only so much time, effort, and resources that we can legitimately continue to invest in ineffective systems. We need to ask ourselves what we want—is the goal to create functional certifications or is it to change the world? Think about what could be possible if we redirected the effort, resources, and will of suppliers, companies, NGOs, and other stakeholders toward participatory capacity building methods, engagement, and more secure and effective ways of gaining and validating data.
We need to ask ourselves what we want—is the goal to create functional certifications or is it to change the world?
We Know What We Want
We know with a great degree of certainty what we want our global supply chains to look like. We want them to be transparent, traceable, efficient, and equitable, and we want them to help us achieve the UN Sustainable Development Goals. We can debate the exact meaning of each of these words, but broadly speaking, no matter the supply chain, we want its players to see and know what’s going on. We also want supply chains to be resource- and cost-efficient—and as circular as possible—and we want the people along the chain who are contributing value to be gaining value in return, especially those upstream.
We Have the Means to Get Us There
The will, technology, and financing exist to achieve this, so let’s focus on deploying these tools for maximum impact. We have three big ideas:
- First, we must acknowledge that supply chains are shared resources. Gaining traceability and tackling issues will work better if companies stop thinking about them as their proprietary supply chains and instead start trying to gain maximum benefit out of their interconnectedness. This goes beyond the collaboration happening in various industry fora; it is actually about letting go of ego and putting effort into listening. Specifically, this means understanding the needs and incentives at every step along the supply chain, starting with the producers and workers, to ensure we collectively apply solutions to address their actual problems.
- To tackle issues at the site level, we know how to engage for change. There is still a translation and reality gap between corporate-level policies and implementation on the ground. We need participatory capacity building and two-way dialogue for both buyers and suppliers to understand each others’ existing challenges and limitations, identify solutions and tools that are feasible and practical, and uncover the root causes for systemic, industrywide issues that require multistakeholder engagement and commitment to resolve. We hear the calls that this isn’t scalable, but we disagree. If companies pool their efforts and resources, perhaps taking their financing partners with them, and put them toward participatory engagement methods, then suppliers, NGOs, nonprofits, and community organization partners will deliver.
- To tackle the need for data and validation, companies should be putting significant effort into using technology to gain traceability and transparency. This doesn’t mean using old tools—for example, sending people to sourcing countries with spreadsheets and calling it a traceability program. There is so much technology available, and it takes intelligence to identify and apply the right mix: That’s why business should use the wealth of expertise internally and externally to work with peers and supply chain partners to agree on objectives and apply some (not all) of the tools like supply chain mapping, mobile connectivity, IOT devices, data analytics, and—yes—blockchain. If you want proof that this kind of stuff is possible, start by looking at these organizations and how corporations are interacting with them: Blockchain Lab for Open Collaboration, Eachmile, Halotrade, Provenance, Sourcemap, Trase.
We Need to Try a New Approach
It has been said that human beings will be the first species to measure their own demise. Instead of doubling down our efforts in certification and accounting for sustainability, we propose prioritizing our efforts on meaningfully changing how we manage and engage with supply chains.
As an example, BSR is convening players to coordinate efforts on social change in the palm oil industry in Indonesia, through workshops that will provide suppliers across the country with the opportunity to have in-depth discussions on their sustainability challenges with industry experts. We will also develop practical site-level tools and guidance on labor issues like women’s empowerment and the prevention of child labor.
We are also working with our members and external partners to navigate how to use new technologies and incentives to provide better outcomes for smallholders and to drive traceability and visibility for the consumer-facing brands and for all the actors along commodity supply chains.
Reach out to us if you’d like to learn more.
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