Sustainable Supply Chain

Who are the leaders in Sustainable Supply Chain Management?

Find out what Green Star, Ecolabelling Schemes, multinationals and construction companies are doing with their certification, innovation credits and procurement practices.

INTRODUCTION

Having a sustainable supply chain is almost a ‘must have’ these days for product manufacturers.  Large multinationals, the Green Building Council of Australia (GBCA) and Australian Ecolabelling standards are all playing a positive role in ensuring Australian product manufacturers are sourcing ethical products, product components and materials.

The companies and not-for-profits that are included in this blog are all contributing to bringing a positive change in the area of human and labour rights and also environmental management for product manufacturers.

The information supplied below is publically available, with links to the company’s website, or by information gained through my experience of working with the ecolabelling schemes and understanding Green Star requirements. 


OFFICE SUPPLIERS

Officeworks – Responsible Sourcing

Officeworks source products from thousands of suppliers in Australia and globally and take their responsibilities to suppliers and the communities they operate in very seriously. They are committed to educating their suppliers about responsible sourcing policies and requirements.

As a company which supplies products made from timber they have adopted a zero tolerance approach to illegal timber in their supply chain and support certification of forestry to international recognised independent third party standards.

As Officeworks is part of the Wesfarmers group, they have a rather comprehensive approach to supply chain sustainability.

Officeworks is a member of Sedex, a not-for-profit organisation responsible for driving supply chain improvements and responsible business practices. Find out more about Officeworks sustainability practices. 


INDUSTRY INITIAVES

Green Building Council of Australia (GBCA)

The GBCA has included Compliant Supply Chain (CSC) as 1 of the 7 Priority Areas of Concerns included in product certification requirements.  CSC requires manufacturers to seek a whole-of-enterprise social compliance of suppliers via independent assurance of compliance with International Labour Organisation (ILO), Worldwide Responsible Accreditation Production (WRAP) certification, Business Social Compliance Initiative (BSCI) certification or other equivalent certification.

ILO Conventions refers to:

  • Freedom of association and collective bargaining (convention 87 and 98)
  • Elimination of forced and compulsory labour (conventions 29 and 105)
  • Elimination of discrimination in respect of employment and occupation (conventions 100 and 111)
  • Convention 155 – Occupational safety and health and its accompanying recommendations NO: 164; and
  • Convention 161 – Occupational health services and it’s accompany recommendations NO: 171

To find out more download this informative PDF about product certification schemes. 

NB: Compliant Supply Chain criteria is a not mandatory requirement, so may not be included in all GBCA recognised product certification schemes.


GREEN STAR and LEED INNOVATION CREDITS

Innovation credits are a pathway for a Green Star projects to pick up additional credits and points.

30EB Global Sustainability – LEED, PILOT CREDITS ‘Social equity within the supply chain’.

Social equity within the supply chain, is an ‘innovation credit’ option available for Green Star and LEED projects.

This credit addresses social equity for those involved in the production of materials and products used in the project, including the stages of raw materials extraction, processing, manufacturing, and assembly of final components and products.

 Green Star Innovation requirements

A Credit Interpretation Request (CIR) must be submitted by the Project team, detailing how the credit will be adapted using the Green Star Rating tool prior to submission being made. Find out more about Innovation here. 


CONSTRUCTION COMPANIES

Lend Lease

Lendlease works closely with suppliers to ensure they demonstrate compliance with social, ethical and environmental considerations.

They expect their suppliers to have human rights policies and records consistent with the requirements of Lend Lease’s Global Environment and Health and Safety Policies. They also expect their suppliers to have an Environmental Management System that ensures compliance with their global standards of operation and minimal impact on the environment.

Their overall objective is to procure products from and to do business with, suppliers that are aligned with their aspiration to be a global sustainability leader, by engaging with every part of their supply chain. Find out more about Lend Lease here. 

 

Mirvac

This Changes Everything is Mirvac’s commitment to its people, customers and suppliers and sets out clear sustainability targets and steps to achieve them. One of these targets includes Mirvac’s commitment to prequalify 50 per cent of its supply chain, by value, on social and environmental sustainability criteria by the end of 2015. 

In Mirvac’s 2015 Sustainability report

Mirvac classifies its suppliers as companies that provide goods, services and materials.  They engage with their suppliers by sustainability questionnaires and a vendor code of conduct through their online system and personalised dashboard.

Key areas include -corporate responsibility and governance, people, occupational health and safety, community, supply chain, risk and environment

More information can be found in Mirvac’s 2015 Sustainability report, page 91.

The GPT Group

VISION

Our team vision is to deliver continued value to tenants and shareholders through the achievement of the best possible commercial outcomes from all procurement activities across all business units. We will ensure that GPT's policies, including sustainability policies, remain at the heart of our procurement decisions as we continue to maintain our world leading position in sustainable real estate. 

WE WILL

Deliver strategic and innovative supply solutions and policy guidance that bring ongoing value, efficiency and compliance to the GPT's procurement operations.

OUR STRATEGIC PLAN

Our vision of supporting education, communities and GPT services through procurement excellence will be supported by focusing on the following priorities.


CORPORATIONS

Commonwealth Bank

Using our influence to enhance environmental, social and economic outcomes in our supply chain

As one of Australia's largest organisations we purchase a wide range of products and services in the course of our everyday business, from catering and vehicles to computers and stationery. We need to know that our suppliers and their suppliers in turn, are acting with integrity.

Sustainable supply chain management

In conducting our day-to-day business, the Group expects our people to:

  • Comply with laws and regulations
  • Act in a socially responsible and ethical way
  • Value and respect people of diverse backgrounds, experiences and perspectives
  • Carry out robust corporate governance
  • Have a proactive focus on risk awareness and management
  • Manage environmental impacts
  • Act responsibly to safeguard the Group, employees, customers, brand, reputation, assets and information.

We expect that our suppliers will adhere to these same standards. This year we refreshed our Supplier Code of Conductto clarify and reinforce the social, ethical and environmental criteria we expect our suppliers to meet, along with their own suppliers. For more information click here.

Westpac

Sustainable Supply Chain Management

We take great care in selecting suppliers who share our commitment to best practice and we aim to realise the potential of our supply chain in driving positive social outcomes.

Westpac was a pioneer in sustainable sourcing. As the first Australian bank to establish a sustainable supply chain management policy, we were an early adopter of world leading sustainable sourcing practices aimed at ensuring our suppliers' business practices demonstrate high standards of sustainability.

One of the cornerstones of our approach is a commitment to work closely with our suppliers to identify, mitigate and manage risks. This approach is set out in our Sustainable Supply Chain Management Framework. Find out more here.


The above listed company initiatives are just a small snapshot of what businesses are doing to address social and environmental compliance within their supply chain.

Every business wants to be supporting other businesses that are doing the right thing, taking an ethical approach to addressing not only environmental impacts, but also looking after the human and labour rights of workers, especially vulnerable workers.


If you want to know more:

  • Call Libby on 0448 026 508 or email us
  • For more information on our Sustainable Supply Chain services
  • Otherwise please subscribe to our newsletter in the footer of our website and get access to our free Sustainability Mindfield guide

 

 

Sustainable Supply Chain - An introduction

Supply chain issues are well known in the apparel, electronics and sporting goods industries, but what about the interiors and building products industry?

INTRODUCTION

Businesses want to protect their brand and supply chain issues play a part in protecting a company’s reputation. Everyone sadly remembers the collapse of the Rana Plaza building in 2013 which tragically killed 1127 Bangladesh workers, and what this meant to the brands associated with this tragedy.

Over the last few years, and even more recently, in the last 6 months, I have seen a huge momentum swing in regards to sustainable supply chain in the interiors and building industry. Customers want to purchase ethical products. Particularly when so many products or materials are being sourced from developing nations where there is a greater risk for human and labour rights abuses, e.g. China, India, Vietnam, Taiwan etc

What is driving this?

There are a number of factors.  Firstly, larger corporations are trying to do the right thing and have systems in place to ensure they conduct strict due diligence of their suppliers, to ensure they are purchasing ethical products.

A number of multinationals and construction companies are signatories to the UN Global Compact (UNGC). The UNGC lays the framework for organisations to ensure they support and respect international human rights and to ensure they are NOT COMPLICIT in human rights abuses.

Corporations are issuing their suppliers with a Suppliers Code of Conduct, to help reduce risks and to set out the requirements for social and environmental compliance.

Secondly, Ecolabelling schemes have included ‘compliant supply chain’ in their standard requirements and the Australian Green Star Rating Tools and the US LEED Rating Tools have an Innovation credit for ‘Social equity within the supply chain’.

What does a sustainable supply chain look like?

A sustainable supply chain or responsible sourcing or ethical procurement means that companies are addressing social responsibility and environmental management within their supply chain. One of the first steps in this process is to initiate a ‘Suppliers Code of conduct’.  A Suppliers Code of Conduct sets out a list of requirements for the suppliers to comply with. These requirements include:

Social responsibility:

  • ensuring safe work practices
  • no forced, bonded or child labour
  • harassment and grievance policies, procedures and mechanisms
  • anti-discrimination and bullying
  • ensuring workers’ rights in regards to  freedom of association and collective bargaining
  • fair working hours and compensation
  • anti-corruption and bribery

Environmental management:

  • ISO14001 EMS certification
  • environmental policies and procedures
  • compliance to local and national environmental regulations and laws
  • waste and energy management strategies
  • emission reduction initiatives
  • low toxic products to include eliminating prohibited substances
  • Product stewardship

So what does this mean for product manufacturers?

There are two key considerations:

  1. Your organisation may be asked by one of your clients, or a construction company to comply with THEIR Suppliers Code of Conduct, which means implementing social and environmental initiatives within your business.
  2. There is an expectation that YOUR company will initiate a Suppliers Code of Conduct to your suppliers, to ensure they are not complicit in human rights abuses and have a good level of environmental compliance.

Why do you need a sustainable supply chain?

On a very basic level, your clients and customers have an expectation that the products they are purchasing are made ethically, that there are no human and labour rights abuses (e.g. child labour, unsafe working conditions, forced labour, and unfair pay) and have systems in place to manage environmental impacts.

If your company is sourcing products, materials or components, or any service that is related to your business then it would be appropriate for your organisation to ensure your suppliers have environmental management and human and labour rights policies and practices.

Some of the larger corporates and construction companies have a ‘Suppliers Code of Conduct’ which outlines basic human and labour rights expectations.

What does it take for a company to get serious about implementing a sustainable supply chain?

Initiating a Suppliers Code of Conduct, is the first step, but by no means the only step. You need to understand WHERE the most risk is in your supply chain and where you have the most influence with your suppliers. Mapping your suppliers can help in this process. 

A Code of Conduct will set out what your company expects from your supplier, but it really needs to be a collaborative process, you need to work together to address areas where there is the potential for human and labour rights issues.

A questionnaire asking the supplier what their practices are in relation to environmental management and labour rights will also help you understand the current state of play. 

Communicate to your suppliers, why it’s important to your company (and your clients) and that you are there to support them.

On a final note…..

For product manufacturers, initiating a Suppliers Code of Conduct and ensuring a sustainable supply chain will be a clear competitive advantage for early adopters, but I suspect over the coming years, it will be a prerequisite for companies doing business with these larger corporations.


If you want to know more:

  • Call Libby on 0448 026 508 or email us
  • For more information on our Sustainable Supply Chain services
  • Otherwise please subscribe to our newsletter in the footer of our website and get access to our free Sustainability Mindfield guide. 

SUSTAINABILITY 101

So what is Sustainability?

Sustainability can mean different things to different people and or organisations. For me, it’s all about protecting the ENVIRONMENT and PEOPLE.

Years ago I came across a great VIDEO that explains, for me the true meaning of sustainability, especially in the context of product manufacturing. It’s called the STORY of STUFF.

The Story of Stuff outlines the REAL COST of producing products, both in terms of the human and environment cost and looks at the underside of consumption.

This video may be challenging or confronting for companies making products – but I beg you, stay with it. If you manufacture products and or specify products I would strongly urge you to take these 20 minutes and watch the Story of stuff.  If you stay until the conclusion of the video, you will see that there is certainly a great deal or optimism and great opportunities for product manufacturers. 

We all have a role to play in ensuring we have a more sustainable future, by producing more sustainable products and adopting ethical business practices. And for Designers and specifiers to reward these companies that are taking the lead.

Watch Video Now

10 years on I still remain extremely motivated to create positive change and provide sustainable solutions to product manufactures. As Annie Leonard concludes in her presentation, “there are people working on saving forests, cleaner production, labour rights, fair trade and conscious consuming, by the people for the people. What we need is a new mindset based on sustainability and equity”.

The video finishes on this final note – “Some say its unrealistic, or idealistic, some say it can’t happen”. I say, lets work together to create a more sustainable environment.


Definition of sustainability development (Brundtland Commission)

"Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts:

 

·       the concept of needs, in particular the essential needs of the world's poor, to which overriding priority should be given; and

·       the idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs.