A Focus on Sustainability
In food supply chains, the concept can be viewed through many lenses, including environmental, social, economic — and consumer perception.
By Sue Doerfler
Consumers’ awareness about the origin of the ingredients they consume and concerns by nongovernmental organizations (NGOs) are driving food companies to evaluate their supply chains and become more transparent about sustainability. How companies achieve sustainability, however, depends on how they interpret it.
“Wherever they are in the value chain, it’s important for companies to define what they mean by a sustainable food supply chain,” says Jenny Davis-Peccoud, a partner in Bain & Company’s Amsterdam office and head of the firm’s Global Sustainability practice.
It can be a challenging task because there is no consistent definition for a company to follow, she says. Industries, NGOs and other organizations each can have their own definitions about what sustainability means, for example, regarding cocoa or greenhouse-gas emissions. Global conventions — like the COP21 Paris (a 2015 international conference on climate change) perspective of CO2 emissions — add yet other definitions.
“If you want to be a leader in the space, you’re going to create a definition of sustainability that is broader and more stretching,” Davis-Peccoud says.
Environmental impact — on habitats and ecosystems, climate change, erosion and other factors — often dictates the definition of sustainability. For many food companies, that means reducing carbon emissions, deforestation (which also contributes to carbondioxide emissions) and water use, as well as improving soil management, says David Cleary, director — agriculture at The Nature Conservancy, a global environmental nonprofit organization headquartered in Arlington, Virginia.
The type of products a company sources also can have varying impacts on sustainability, and thus the definition a company develops. Consider the tuna supply chain, for example. “On the environmental side, it’s not just about carbon dioxide emissions, as an example, but it’s also about environmental degradation of the ocean environment, biodiversity and preservation of the fish stock in that marine environment,” Davis-Peccoud says.
Social factors are also part of the equation. Slave labor and human trafficking are major concerns in the tuna supply chain. A report released earlier this year by the United Kingdom-based Business and Human Rights Resource Centre (BHRRC) found that of the 35 tuna companies and grocers it surveyed, only 20 percent have mapped their supply chains. Only four companies said they have conducted due diligence to uncover modern slavery in their supply chains, the report found.
“If you are a grocer and want to sell what you call sustainable tuna, then you’d better define what you mean by sustainable, so you can be sure you’re indeed practicing what you preach across your supply chain,” Davis-Peccoud says.