Multinationals like Coca Cola, Interface and others are making public commitments to ramp up their sustainability efforts across the supply chain in response to escalating consumer pressure, the “compliance” squeeze and a desire to improve efficiency and reduce costs.
They are forging a path to a greener and more profitable future – one that relies on our ability to build a strong supply base of alternative materials that compete with the status quo on price and availability. Here’s the catch: achieving a fully sustainable and transparent supply chain, one that generates no net harm to society and the environment, depends on responsible sourcing going mainstream. Currently companies are facing major barriers to adopting responsible alternatives, like bio-based plastics and FSC-certified fibres, because demand simply isn’t strong enough to put them on a level playing field with conventionally-produced materials. So how do we raise the bar?
4 Ways to Build a Sustainable Sourcing Network
1) Establish a Business Code Of Conduct for Suppliers (BSfS)
A social and environmental code of conduct will drive responsibility throughout the supply chain by holding each supplier to a higher standard with respect to environmental protection in sourcing, manufacturing, distribution and the treatment of workers and communities. To be effective, a code of conduct cannot rely on a signature alone as it requires active and regular engagement through data reporting, third party inspections and audits. For some industries, codes of conduct have been developed through a collaborative process and are now widely used, such as the Higg Index 2.0 for apparel and footwear. For others, credible standards have yet to be developed or are in their infancy with much work still to be done. Implementing BSfS across the value chain helps develop a shared mindset about sustainability issues, drive accountability, strategy and performance, strengthen competitiveness and deliver long term sustainable shared value.
2) Build Upstream Partnerships
Conducting regular assessments of your suppliers’ environmental performance (e.g., greenhouse gas emissions, BOD, VOC, recycling, etc.) and ensuring they meet minimum requirements is the foundation for collaboration. Engage your base material suppliers by working collaboratively to meet your responsible procurement goals. Working directly with your suppliers is a big opportunity to close identified gaps with a continued focus on driving responsible sourcing. In this sense you are committed to ensuring they, at a minimum, adhere to applicable legal requirements and support your corporate goals consistently by meeting and exceeding customer expectations of quality, cost and delivery.
3) Establish a Chain of Custody
A chain of custody provides transparency from resource extraction to the point of sale and ultimately, it prevents uncontrolled sources from entering the system. Third party management and chain of custody certification is more credible than a self-declaration from suppliers as proof that raw materials came from well-managed areas.
Tetra Pak cartons are largely composed of paperboard (on average of 74%) so we began our chain of custody journey with paperboard by asking our suppliers to be FSC™ CoC (Chain of Custody) certified, ensuring traceability of the wood fibre from forest to store. Getting 98% of our paperboard suppliers globally FSC CoC certified was a long journey and there is still significant room for improving forest management certification. Tetra Pak established a Procedure for Responsible Sourcing, to only source wood-based products in accordance with the principles of sustainable forest management.
While Tetra Pak works towards establishing a chain of custody for bio-based plastics globally, they are working with Braskem, the world leader for producing environmentally sustainable green polyethylene (Read more about the first biobased plastic capped carton to enter the market). The deployment of bio-based polymers for caps and coatings will expand in tandem with the renewable polymer space and customer demand for green materials.
In the meantime, a Code-of-Conduct established in 2010 with Proforest (a natural resources consultant from the UK), frames our commitment to our sustainability vision for using bio based materials. This has enabled our sub-suppliers to meet our Code-of-Conduct accounting for more than 90% of purchased volumes, as verified by external consultants.
From a lifecycle perspective, the extraction and production of aluminum accounts for the greatest single climate impact in Tetra Pak cartons. While no credible chain of custody standards are yet available, Tetra Pak was among the group companies that pioneered the Aluminum Stewardship Initiative (ASI) in 2012 with the support of the International Union for Conservation of Nature (IUCN). They plan to develop a chain of custody standard that will to be implemented this year.
Another ambition is to explore ways to reduce our use of aluminum and develop an alternative barrier to replace aluminum (see world’s first plant based beverage carton – Tetra Rex).
4) Reporting and evaluating your supply chain
Lifecycle Analysis (LCA) of a supply chain is carried out in four distinct stages: 1) Goal and Scope Definition 2) Inventory Analysis 3) Impact Assessment 4) Interpretation. The key purpose of performing life cycle analysis is to evaluate the potential impacts associated with identified inputs and releases, interpreting the final results to make informed decisions and communicate them in a fair, complete, and accurate manner.
Case Study: Coca Cola’s Water Stewardship
Coca-Cola understands that water security is vital to it’s operations much in the same way that clean and accessible drinking water is critical to the health of communities.
As industry stewards, they have set a goal to return the equivalent volumes of water they use back to communities and the ecosystem by 2020 to become water neutral. In order to do this, Coca Cola established the right partnerships to develop a global system that responsibly manages, replenishes and/or balances the supply throughout their entire value chain. The system is becoming more efficient in its water consumption by reducing the amount used per liter of product, even as production volumes increase. So far, they balanced 68% through replenishing 108.5 billion communities and ecosystems; returned approximately 160 billion litres through treated wastewater; 91% of bottling plants have completed source vulnerability assessments; 99% of bottling plants align with wastewater standards; 68% of plants have begun implementation of source water protection plans; improved their water efficiency by 8%; and introduced a water recovery system to improve water use efficiency by upto 35%.
At Tetra Pak, we also realize how important it is to respond to shocks arising from discontinuous feedstock supplies. We must be able to change raw material inputs and find environmental and socially sustainable ways to secure supply and consistently meet customer demand. Our Moving to the Front campaign aims to take responsibility mainstream as we encourage businesses to explore opportunities for adopting renewable materials into their supply chain and to raise demand for stringent resource management standards.