Close your eyes. Think hard. Can you come up with an example of a sustainable value chain? A set of relationships and processes that delivers goods and services to market, where the economic benefits accrue equally to all organisations, where environmental impacts are minimal or zero and where social capital builds over time?
No? Thought not. Why? Because right now, value chains are not sustainable in the truest sense. Some may work from an economic perspective, but it’s unlikely that environmental and social sustainability are equally taken into account. More common features of both global and local supply chains, particularly in the food system, are resource shortages, disruptions in supply, and all too often, poor working conditions.
Why is this? At Forum for the Future, we think there are (at least) three key barriers to truly sustainable value chains:
However, the good news is that we believe that there are three solutions which could address these barriers, and help deliver sustainable value chains.
Key to delivering any of these solutions is collaboration.
Vertically, within supply chains, where shared goals can deliver new trust and new ways of working. Supplier forums run by most retailers in the UK are great examples of vertical collaboration. Horizontally, between brands, where clear rules on competition are needed. The Sustainability Consortium and Consumer Goods Forum are both successful examples of horizontal collaboration. And then there is multi-stakeholder collaboration: business and NGOs and others coming together to tackle issues that are just too big for one organisation to tackle alone. In the UK, Dairy 2020 showed that good things can happen when the whole value chain and interested stakeholders come together, and globally, our Sustainable Shipping Initiative is making good progress in shifting an entire sector to a sustainable footing.
The solutions we can point to today are great examples of pioneering practice. The real challenge lies in scaling up this pioneering practice, creating a tipping point and making sustainable value chains the new mainstream. How can you replicate pioneering practice? How could you scale up the good ideas out there? The answers might be hard, but the prize is one worth having.