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Viewpoint: As African economies grow, regulators, investors, and corporations need to put sustainability first

The SSC Team October 25, 2016 Tags: , , Strategic Sustainability Consulting No comments

A recent analysis in the Harvard Business Review paints a fairly rosy picture for economic growth up and across the African continent. When controlling for the drop in revenue from oil-rich African countries and disruption from the Arab Spring movement, other economic sectors maintained a 4%+ growth rate over the past five years.

Growth coupled with a rapid urbanization rate, increasing workforce size, accelerating technology access, and abundant resources all mean that the “continent still offers promising opportunities for global investors and businesses.”

The article asserts that, “to unlock growth, companies should look for opportunities in six sectors that we find have ‘white space’— wholesale and retail, food and agri-processing, health care, financial services, light manufacturing, and construction. All these sectors are characterized by high growth, high profitability, and low consolidation.”

To continue, the authors do make note that political and economic stability play major roles in how the continent will move forward. But there is no mention of how global, national, regional, and governments should also pay close attention to – and set policy and precedent for – how a 4%+ economic growth rate, booming population, and tens of millions of households entering the consumer class should be regulated in terms of mitigating the effects on the environment.

Yes, to unlock growth, companies should be looking at Africa – specifically these six sectors – and governments should be paying close attention to prevent exploitation of the new working and consumer classes. Yet, everyone should also be committed to making sure this new African future is sustainable as well.  

Tackling sustainability, and adding sustainability in as a factor for African development in assessments like the one published, pressing global multinational companies to ensure all African initiatives have robust sustainability elements, designing programs to help African-based companies gain immediate and relevant access to sustainability strategic planning tools and best practices, including African leaders in important conversations and protocols as global climate accords are developed, and essentially not reinventing the wheel.

As we see Asian countries struggling to reduce emissions generated by decades of providing a cheap-labor market driven by coal power, the international business community and government leaders need to ensure sustainability is directly integrated into Africa’s path for industrial development – helping build a green Africa starting today.

Coordinating Across the Global Supply Chain is the Only Way to Truly Reduce Emissions

The SSC Team September 20, 2016 Tags: , , , Strategic Sustainability Consulting No comments

If you look at the Sustainability Consortium’s Greening Global Supply Chains 2016 Impact Report one way, the current state of reducing environmental impact from global industry appears terrible, at best. 

The 2016 impact report includes some essential graphic depictions of the state of supply chain emissions in 12 consumer industries, and if you flip straight to page 26, you might feel discouraged to see all of the red and yellow hues.

Glancing at some of the statistics – more than 60% of emissions are related to consumer goods, with the demand for consumer goods expected to increase by 2.5 billion people in the next few decades, and emerging economies still relying on forced and child labor to compete in the global marketplace –things look dire. 

But, if you really dig deeper into this fairly remarkable effort at comprehensively assessing global industry, there is hope.

With such a clear and direct look at exactly what is happening along each supply chain, no industry can hide behind a lack of data or claim that their own impact is insignificant.

Shining a harsh light on the true state of environmental and social responsibility progress, it becomes clear that every step along the supply chain is important, and every small move to reduce impact will add up.

Suppliers, manufacturers, and retailers, and consumers must work together move the bar – and this report demonstrates that everyone has a role and everyone should start to move their own piece.

The Sustainability Consortium recommends that suppliers offer a universal reporting tool to deliver to all customers. Both the purchasing party asking for a top-down report, and the supplier itself delivering a bottom up report, should work together as a team for the ultimate goals of reducing environmental and social impact and delivering sustainable goods.

Companies today being pushed to report on sustainability metrics and make meaningful change because of stakeholder demand should accept this as the new normal. And it’s always better to take control of the process rather than be pushed around. Suppliers and small manufacturers need to get in the driver’s seat and do their part to contribute to a sustainable supply chain instead of resist the change.

Are you a manufacturer or supplier contributing to the supply chain of the consumer goods industry and ready to jump out ahead on sustainability? Contact us for an assessment on how we can put together your sustainability report, keeping your organization ahead of the pack. 

Will the UK Modern Slavery Act do any good?

The SSC Team November 5, 2015 Tags: , , , , , , , , , Strategic Sustainability Consulting No comments

Late last week, the UK Parliament passed the Modern Slavery Act, a bill designed to require UK companies to report any steps they are taking to address and prevent human trafficking and modern slavery in their supply chains.

According to the Global Slavery Index, modern slavery is estimated to include more than 36 million people who work in conditions completely controlled by others. Most of these people are found deep in the supply chains of global corporations.

To comply with the Modern Slavery Act, it doesn’t mean a company will have to actually address human trafficking and modern slavery. A company simply has to report whether it has taken any steps to do so.

Therefore, if a corporation files a report indicating that it has taken no steps, it will still be in compliance with the law.

So, does this do us any good?

Overall, yes.

This act pushes corporations one step closer to connecting the process of reporting to the concrete steps of taking action.

We've seen this cause/effect hundreds of times as external pressure – supplier scorecards, stakeholder pressure, or legislation – pushes companies to report. The first report can be humbling, but the process of reporting opens up action steps, focus areas, and progress.

As companies file their first reports, some saying “no action taken.” We believe that their stakeholders will ask “why?” It is then that they will realize it is time to do an initial Social Audit, Supply Chain Analysis and/or Life Cycle Analysis.

A recent article in Huffington Post written by two CEOs speak to the effect of data:

"The vulnerability in our supply chains was in labour hire, specifically the recruitment of migrant workers from disadvantaged backgrounds. Social audits revealed that recruiters were stealing wages from workers through excessive recruitment fees and high interest loans, creating a situation of debt bondage. Upon learning of these terrible conditions, we took immediate action so that workers were paid back the fees they were owed, allowing them to earn a proper wage.”

The companies and the CEOs in question were performing social audits prior to the UK Modern Slavery Act, and were able to take action.

We believe that more companies will engage with auditors, and decisive action will be taken because of this new law.

So, yes, the Modern Slavery Act is going to do some good.  

Would stronger legislation and adoption in other countries, like the U.S., do even more good? Likely.

However, corporations can and should begin on this important work now. There is no need to wait for legislation to become a more socially and environmentally responsible organization.

Learn more about supply chain assessments and audits and how they can help your company create a system to uncover risks lurking in the supply chain. How have supply chain audits helped your organization uncover risk? Let us know in the comments!