Supply chain traceability is increasingly becoming a key component in the business operations of palm oil, paper, minerals and diamonds, and select food commodities, said the United Nations Global Compact and BSR.
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The two organisations recently launched the first worldwide guide on traceability, which aims to shed light on the importance of traceability in achieving sustainability while providing steps on how to conduct traceability programmes within companies’ corporate social responsibility efforts.
Called the A Guide to Traceability: A Practical Approach to Advance Sustainability in Global Supply Chains, it also presents lessons and real-life case studies on a wide range of products that are applicable across companies and industries around the world.
According to the International Organization for Standardization (ISO), as cited by the guide, supply chain traceability is “the ability to identify and trace the history, distribution, location and application of products, parts and materials, to ensure the reliability of sustainability claims, in the areas of human rights, labour (including health and safety), the environment and anti-corruption”.
Firms are becoming more aware of the significance of traceability due to growing regulatory pressure and consumer demand for responsibly sourced and produced goods and services, said the UN Global Compact, the largest voluntary corporate sustainability initiative in the world.
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Customers want to know that the sustainability claim they see on a product is true. When done correctly, traceability is a powerful tool to provide re-assurance to customers that companies mean what they say
Tara Norton, BSR director for advisory services
Currently, only a small per cent of products can be traced based on sustainability, the organisation added. The 45-page guide, which culls over a year’s worth of research and interviews, noted that such traceability still has a long way to go become part of supply chain management and procurement practices.
Ursula Wynhoven, general counsel and chief of governance and social sustainability for the UN Global Compact, said: “With corporate supply chains growing in scale and complexity globally in recent decades, it is critical for companies to think beyond short-term financial considerations and build capacities to deliver long-term value along the entire supply chain.”
For example, the guide cited schemes that assessed whether minerals are not sourced from conditions of armed conflict, ensuring that it did not in any way finance such conflicts and that no human rights abuses resulted from purchasing these minerals.
“Only by tracing the origin of these materials in their supply chains can companies work to build conflict-free products,” said Michael Rohwer, program director of the Conflict-Free Sourcing Initiative, spearheaded by the Electronic Industry Citizenship Coalition (EICC) and Global e-Sustainability Initiative (GeSI). He added that strong traceability practices mean tracing the metals “all the way back to the mine”.
Similarly, traceability initiatives include certification programmes that check the sustainability of producing commodities like cocoa, nuts and coffee, since the cultivation of these crops have an impact on the environment, noted the two organisations in the report. They explained that monitoring how these agricultural items are produced could lead to reducing carbon footprint and preventing deforestation.
Aside from minerals (including diamonds) and cocoa, the guide also specifically discusses areas of collaboration and alignment for eight other commodities that are frequently linked to traceability for sustainability goals. These are beef, biofuel, cotton, fish, leather, palm oil, sugar and timber.
Recently, Procter and Gamble adopted a ‘no-deforestation’ policy concerning the use of palm oil in their consumer products after the continuous campaign of Greenpeace to protect forests and the rights of local communities. The manufacturer aims to ensure that its products are free from deforestation by 2020, while its palm oil supply should be traceable by 2015.
Wynhoven stressed: “Traceability systems offer an unprecedented opportunity for companies to improve transparency throughout the supply chain and fulfil their wider sustainability promises.”
“Customers want to know that the sustainability claim they see on a product is true. When done correctly, traceability is a powerful tool to provide re-assurance to customers that companies mean what they say,” explained Tara Norton, director for advisory services at BSR, a consultancy and network of more than 250 international firms engaged in sustainability and collaboration.
“In writing this guide, we aim to de-mystify traceability, to show companies clearly what it is all about, who the key players are, and how they can approach it,” she added.
