The Tragedy of Deforestation in Our Global Supply Chains
Forests are not only a vital resource for maintaining a healthy and stable climate, but they also provide numerous ecosystem services such as biodiversity conservation, soil conservation, and water regulation. However, supply chains that rely on unsustainable practices are a major threat to the world’s forests. This BBC video emphasizes that immediate action is needed to address the drivers of deforestation and promote sustainable supply chains.
Tenth Anniversary of the Rana Plaza Disaster
Ten years ago, on April 24, 2013, the world was shocked by the collapse of the Rana Plaza building in Bangladesh. The tragedy claimed the lives of 1,134 garment workers and injured thousands more. The building housed several garment factories that supplied clothing to major global brands. Rana Plaza highlighted the dominant supply chain logic: that a T-shirt can only be sold at a very low price at the downstream end of the supply chain because the real cost is paid by the workers at the upstream end, who sacrifice their health or even their lives. In the aftermath, many apparel brands committed to improving working conditions in their supply chains. Yet, progress has been slow and uneven. Ten years on, there is still much to be done to ensure that garment workers are treated fairly and with dignity. As we remember the victims of the Rana Plaza tragedy, we, supply chain academics, have a crucial role to play in the transformation of fashion supply chains.
Circular Supply Chain Transformation
We have just released a new report, entitled Circular Supply Chain Transformation: Challenges, Opportunities, and Trade-Offs for Circular Smartphones and Computers. It highlights the importance, opportunities, and potential trade-offs associated with circular supply chains for electronic devices in a way that makes it easier for decision makers to understand and navigate the circular transformation. Importantly, the report emphasizes that everyone – from manufacturers and purchasers to distributors, recyclers, and policy makers – has a role to play in the transformation toward circular devices, and that it is possible to implement many of these circular initiatives in a way that reduces the environmental, social, and economic costs of electronic devices. By providing concrete examples and societal reflections, the report serves as a foundation and guide for decision-makers who want to reduce the negative impact of their electronic devices. The report is a result of the Reimagining Supply Chains Initiative – a collaborative research effort between Copenhagen Business School, Nordakademie, and Nordakademie Foundation.
The Dark Side of the Cobalt Supply Chain
Cobalt Wars is one of the most interesting ARTE.tv documentaries I have seen recently. It looks at the supply chain of cobalt, a key ingredient in the batteries of our smartphones and electric cars, and the political, environmental and social challenges associated with that supply chain. (French with English subtitles, also available in German. Not available in all regions.)
Accelerating the Path to Net-Zero Supply Chains
The “No-Excuse” Framework to Accelerate the Path to Net-Zero Manufacturing and Value Chains is a new white paper that aims to provide businesses with the information they need to operationalize their commitments to reducing carbon emissions and addressing the climate crisis. The framework is intended to be a central tool for the World Economic Forum Industry Net Zero Accelerator initiative, which is designed to bring together leaders across industry sectors, academia, government, and civil society to jointly shed light on global insights and best practices for reducing emissions. The framework is divided into four stages: (1) build the foundations, (2) change the game internally, (3) drive systemic collaboration, and (4) make it simple, inclusive and exciting. Each stage of the framework consists of a combination of research-based insights, well-established action areas, and emerging themes. The goal of the framework is to be applicable across key industries and geographies. This white paper is the first output of the Industry Net Zero Accelerator initiative and further resources are available for chief executive officers at the Alliance of CEO Climate Leaders.
Personal Predictions for Supply Chain Management in 2023
As in previous years, I am making a prediction about what could be important topics in supply chain management research. Here are three predictions: (1) OpenAI has demonstrated the incredible potential of machine learning, and this will have numerous implications for the management of supply chains. It is important for our discipline to consider the potential and drawbacks of this technology at an early stage. (2) Supply chain resilience remains a critical issue. For example, the recent resurgence of Covid-19 cases in China could lead to the closure of ports and factories, which would disrupt global supply chains. This topic will continue to be relevant in the future. (3) The climate and biodiversity crises continue to worsen, and their solutions are closely tied to supply chains. Human-caused emissions and the destruction of rainforests are directly related to supply chains, and new laws, such as those in Germany and the EU, reflect this. I wish you all a Happy New Year 2023.
Solar PV Global Supply Chains
The International Energy Agency has just released a new special report entitled Solar PV Global Supply Chains. It examines solar PV (= photovoltaic) supply chains “from raw materials all the way to the finished product, spanning the five main segments of the manufacturing process: polysilicon, ingots, wafers, cells and modules”. The authors argue that “[p]utting the world on a path to reaching net zero emissions requires solar PV to expand globally on an even greater scale, raising concerns about security of manufacturing supply for achieving such rapid growth rates – but also offering new opportunities for diversification”. It becomes clear from the report that China currently dominates such supply chains and that diversification can reduce supply chain vulnerabilities and offer economic and environmental opportunities. According to the authors, policy makers need to aim for (1) diversifying manufacturing and raw material supplies, (2) de-risking investment, (3) ensuring environmental and social sustainability, (4) continuing to foster innovation, and (5) developing and strengthening recycling capabilities.
European Commission’s Directive on Corporate Sustainability Due Diligence
Yesterday, the European Commission adopted a long-awaited Proposal for a Directive on Corporate Sustainability Due Diligence. It aims to “set out a horizontal framework to foster the contribution of businesses operating in the single market to the respect of the human rights and environment in their own operations and through their value chains, by identifying, preventing, mitigating and accounting for their adverse human rights, and environmental impacts, and having adequate governance, management systems and measures in place to this end”. Importantly, the proposal covers the company’s own operations, their subsidiaries and their value chains (indirect and direct business relationships). It covers large companies (500 employees, €150 million net turnover worldwide) and additional companies operating in defined high impact sectors. I am sure many supply chain managers, not just in Europe, will have the 70-page document on their nightstand as required reading for the next few days.
Personal Predictions for Supply Chain Management in 2022
The year 2022 has been going on for quite a while. I see the following topics at the top of the agenda in both academia and business: First, the last few months have been characterized by a large number of supply chain hiccups. Missing chips in the automotive industry have become a symbol of this development. Therefore, supply chain resilience is more important than ever. Second, a lot is currently happening in the European Union in terms of supply chain laws. Stricter rules on supply chain liability are expected shortly, and several EU countries have recently pushed their legislation forward. Third, many companies are transforming their linear into circular supply chains, see the new DHL report entitled Delivering on Circularity. Finally, many companies are also concerned with net-zero goals – and more importantly with action plans for these goals. Many of these plans explicitly involve the supply chain. Although I am a bit late, I wish you a good supply chain year 2022.
How to Eliminate Deforestation From Supply Chains
Supply chains have a decisive influence on global deforestation, a phenomenon closely related to the climate and biodiversity crises. Therefore, guidance is needed for decision-makers to inform the design, implementation and monitoring of supply-chain initiatives to reduce global deforestation. Lambin et al.’s (2018) article, entitled The Role of Supply-Chain Initiatives in Reducing Deforestation, reviews such initiatives, their effectiveness, and the challenges they might face. The authors propose “a typology of strategies pursued by private sector actors to reduce deforestation”. This typology is based on two questions: “Was the strategy adopted independently by a single company or as part of a multi-stakeholder process?” and “Does the initiative only define and communicate goals, or does it also implement actionable changes?” This leads to four supply-chain initiatives: (1) company pledges, (2) codes of conduct, (3) collective aspirations, and (4) sectoral standards. In sum, the article gives a very good overview of key initiatives that could help us to solve one of the most important problems of our time.
Lambin, E.F., Gibbs, H.K., Heilmayr, R. et al. (2018). The Role of Supply-Chain Initiatives in Reducing Deforestation. Nature Climate Change, 8, 109–116. https://doi.org/10.1038/s41558-017-0061-1
