Few people give much thought to where their food comes from, how it is grown or raised, and how it gets from the field to the table. People rarely consider, for example, the amount of water it takes to grow food, the impact of water shortages, the carbon emissions generated in transporting food from one country to another, or the far-reaching environmental effects of using fertilisers and pesticides. Globally, agriculture accounts for 70 per cent of all water consumption, and the run-off from fertilisers, manure and pesticides is a major source of water pollution. Agriculture also accounts for 75 per cent of global deforestation and about 17 per cent of total global greenhouse gas emissions.
The food industry is under enormous pressure from the impact of climate change, population increase, and the growing demand for limited resources. In addition, customers are seeking reassurance that companies are managing their supply chain sustainably. There is a growing realization that building a secure and sustainable supply chain not only makes good business sense but also has the potential to bring a number of benefits for a company that is seen to be acting in line with wider stakeholder and societal interests. Building a more resilient supply chain can create competitive advantage for a company by allowing it to manage the impact of change better, while stimulating innovation, increasing productivity and meeting customer demands. As global warming reshapes precipitation patterns and alters ecosystems worldwide, the global food production system is being forced to reckon with unprecedented and often unpredictable shifts in growing seasons, grazing patterns and the availability of water. The industry faces other vulnerabilities, for example, risks to human and labour rights abound in an industry that has traditionally relied on low-cost labour.
Companies are prioritizing sustainability in at least some aspects of their business by putting the responsibility for a sustainability strategy and its implementation into the boardroom, signaling that they are taking the issue seriously. Companies are engaging with stakeholders on environmental, social and governance issues, indicating a commitment to operate sustainably with an understanding that sustainability risks are business risks.However, despite this progress, many fall short in one critical area: sustainable sourcing, which is about meeting the needs of the present without compromising the future – both within the organization and in the world outside it. This should result in a value for money solution that will endure over time and will not negatively impact the environment or society or compromise their ethical stance. It will solve the business problem, while being fit for purpose. Sustainable sourcing can be scaled up or down, and it creates levers of control. It can be adapted to new conditions or changed with minimal risk or cost when business demand changes.To achieve this, category management is needed. The two are intertwined and dependent on each other. You cannot have a mature category management approach without sustainable sourcing – and vice versa.
So what do companies have to do to get on the right track?
Technology plays its part, with cloud-based sustainable procurement solutions offering CSR/sustainability assessments and rating, risk and performance management that can easily be deployed by procurement teams and smoothly integrated into procurement processes. Life-cycle analysis (LCA) software assesses the overall environmental impact of food products from the raw ingredients through to processing, production, distribution, use, waste management and final disposal, allowing companies to reduce operational costs by influencing, prioritizing and reducing their ecological footprint.
No sector of the economy is more vulnerable to climate change, water scarcity and other sustainability challenges than the food industry. How companies respond to the challenges will have major consequences for the billions of people who depend on them, and for the future of the global economy.
Companies are prioritizing sustainability in at least some aspects of their business by putting the responsibility for a sustainability strategy and its implementation into the boardroom, signaling that they are taking the issue seriously. Companies are engaging with stakeholders on environmental, social and governance issues, indicating a commitment to operate sustainably with an understanding that sustainability risks are business risks.However, despite this progress, many fall short in one critical area: sustainable sourcing, which is about meeting the needs of the present without compromising the future – both within the organization and in the world outside it. This should result in a value for money solution that will endure over time and will not negatively impact the environment or society or compromise their ethical stance. It will solve the business problem, while being fit for purpose. Sustainable sourcing can be scaled up or down, and it creates levers of control. It can be adapted to new conditions or changed with minimal risk or cost when business demand changes.To achieve this, category management is needed. The two are intertwined and dependent on each other. You cannot have a mature category management approach without sustainable sourcing – and vice versa.
So what do companies have to do to get on the right track?
- Build a robust risk assessment process. Set measurable goals and targets for sourcing key agricultural inputs sustainably and outline clear timelines and targets for progress.
- Improve public disclosure of sourcing. When companies disclose information about their performance, whatever the subject, they tend to improve that performance.
- Establish clear programmes and incentives for producers to implement sustainable practices at the field level and then measure the improvement.
Technology plays its part, with cloud-based sustainable procurement solutions offering CSR/sustainability assessments and rating, risk and performance management that can easily be deployed by procurement teams and smoothly integrated into procurement processes. Life-cycle analysis (LCA) software assesses the overall environmental impact of food products from the raw ingredients through to processing, production, distribution, use, waste management and final disposal, allowing companies to reduce operational costs by influencing, prioritizing and reducing their ecological footprint.
No sector of the economy is more vulnerable to climate change, water scarcity and other sustainability challenges than the food industry. How companies respond to the challenges will have major consequences for the billions of people who depend on them, and for the future of the global economy.
