“sustainable”)supply) chains:)drivers,)enablers,)...

Alexis H. Bateman, PhD Director, MIT Responsible Supply Chain Lab Research Associate, MIT Center for Transporta<on and Logis<cs

“Sustainable” Supply Chains: Drivers, Enablers,

and Applica<ons

In the Numbers

2

Children Million children engaged in child labor around the world

Global popula<on reliant on commodity produc<on for livelihood

Farmers Million smallholder farmers produce cocoa

Oceans Of the world’s fisheries are fully exploited

Forests Football fields of forest cleared every hour to make room for palm oil planta<ons

59

1/3

6

53%

300

Producers

Bateman 2016 MIT CTL. Do not quote without author authoriza<on

7.4 Billion people on earth Consumers

Growing Mo<va<on Ethical consump<on (will) “reach breakout propor<ons in 2016” Economist (2015)

“People believe that corporate supply chains are a place to conceal skeletons. Corporate treatment of workers overseas is abominable. They plunder scarce resources and pollute the landscape. Companies are loyal only to profit. 70% of our sample believe that companies were not transparent about the goods they sell to the public.” Forbes 2015

“Many people have realized that the cost of inac<on is o`en greater than the cost of ac<on. Compe<tors need to say that it is in our own self-‐interest that we move to sustainable sourcing, stop illegal deforesta<on… If the consumer goods industry does not move to a more sustainable model, most of its profits will be wiped out in 30 to 50 years, and if you are in food even earlier.” Paul Polman, CEO of Unilever

3


Regula<on

4

RegulaDon Requirements

European Commission Food Regula<on, U.S. Food Safety Moderniza<on Act

Food traceability requirements through all stages of produc<on, processing, and distribu<on

U.S. Dodd-‐Frank Wall Street Reform and Consumer Protec<on Act, Sec<on 1502

SEC registered companies must disclose their use of conflict minerals

EU Timber Regula<on, U.S. Lacey Act Prohibits illegal <mber products on market, obliga<ons to keep records for traceability of source

Gene<cally Engineered Food Right-‐to-‐Know Act (Introduced Legisla<on)

Disclosure of any food that is gene<cally engineered or contains one or more GE ingredients

California’s Transparency Act in Supply Chains SB 657

Requires companies doing business in California to disclose efforts to combat slavery and human trafficking Bateman 2016 MIT CTL. Do not quote

without author authoriza<on

5

CPO$

CPKO$

KERNELS$ CPKO$FFB$FFB$

FFB$

FFB$

CPKO$

DOWNSTREAM+OPERATIONS+

OTHER+ESTATES/SCHEMES+

TRADERS+

INDEPENDENT+SMALL++HOLDER+FARMERS+ SCHEME+FARMERS+

PROCESSING+PLANT++SUPPLIER+KERNEL+CRUSHER+PLANTS+SUPPLIER+PALM+OIL+MILLS+

OTHER+PALM+OIL+MILLS+ OTHER+KERNEL+SOURCES+

DOWNSTREAM+OPERATIONS+

KERNELS$

LEGEND$

Mapping the supply chain: Palm Oil


Alignment: Collabora<on


Product Standards – Use and Value

Products Scope Codes Focus

Fairtrade InternaDonal

(FTI)

Mul< product: food and non food (flowers, gold, sports balls)

From producers to last handling buyer 4 Trading condi<ons.

Premiums

Rainforest Alliance (RFA)

Mul< product: food and non food (furniture, building materials, paper, kitchen, guitars…)

From producer to last processing buyer (no transport, no retail)

2 (+CB policy)

Labelling SAN cer<fying

UTZ Specific products: coffee, cocoa, tea, (hazelnuts)

From producer to last handling buyer (no food service)

22 Monitoring, SCM approach

Organic (IFOAM) Mul< product: food From farmer to

processing

3 (+ Na<onal codes)

Agricultural prac<ces, Value chain approach

4C (B2B) Specific product: Coffee From producer to 1st trader 1 GAP, Coopera<on,

Verifica<on & Impact

7 Bateman 2016 MIT CTL. Do not quote without author authoriza<on

Veronica Leon Bravo, Milan, MIT RSL Collaborator

Organiza<ons for Supply Chain Transparency

8

4C Associa<on BCI -‐ Bener Conon Ini<a<ve

Bonsucro

Conon made in Africa

Ethical Tea Partnership

FairTrade Interna<onal

Forest Stewardship Council Programme for the Endorsement of Forest Cer<fica<on Schemes (PEFC) Roundtable on Sustainable

Biomaterials (RSB)

ProTerra Founda<on Roundtable on Sustainable Palm Oil (RSPO)

Round Table on Responsible Soy (RTRS)

Rainforest Alliance

UTZ cer<fied Labour Voices

Global Repor<ng Ini<a<ve

Irish Food Board's 'Origin Green'

UN Global Compact

Global Social Compliance Programme

Sustainable Apparel Coali<on

UK Ethical Trading Ini<a<ve

ISEAL Alliance

Accord on Fire and Building Safety in Bangladesh

Global Partnership for Good Agricultural Prac<ce

SEDEX Ecovadis

Thinkstep (SoFi)

The Forest Trust (TFT)

IndustriALL Global Union

UNI Global Union (UNI)

Clean Clothes Campaign (CCC)

Workers'Rights Consor<um (WRC) Interna<onal Labour Rights Forum (ILRF)

Maquila Solidarity Network (MSN)

Electronic Industry Ci<zenship Council (EICC)

IDH -‐ The Sustainable Trade Ini<a<ve

0 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


96% ETHICALLY SOURCED

COFFEE

$20M FARMER LOANS

CONTRIBUTION

S T A R B U C K S C O F F E E C O M P A N Y

6 FARMER SUPPORT

CENTERS

(COSTA RICA, COLOMBIA, RWANDA, TANZANIA, CHINA, GUATEMALA)

15 YEARS CONSERVATION INTERNATIONAL

PARTNERSHIP

44M POUNDS FAIRTRADE CERTIFIED COFFEE

100% C.A.F.E. PRACTICES

VERIFIED

10

Alignment

Growth

Insurance Efficiency

Green Logis<cs

Renewable Energy

Environmental Repor<ng

Green Logis<cs

Packaging Reduc<on

Employee Engagement

Supply Chain Transparency

Supplier Code of Conduct Reverse Logis<cs

Closed Loop Supply Chains

Product Redesign

New Product Line

Material Subs<tu<on

LCA Driven Supply Chain


“sustainable”)supply) chains:)drivers,)enablers,)...

Documents