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Unchaining ValueCorporate responsibilitythrough the value chain

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Value chainsBackground ICT sector F&B sector Issues Small groups

Unchaining ValueCorporate responsibility through the value chainBackground and objectives

― To understand challenges explore best practice

― To understand capacity building within suppliers to

address environmental and social issues in thesupply chain

― To explore scope for a multi-sector initiative onsustainable supply chains

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Unchaining ValueCorporate responsibility through the value chainBackground and objectives

― Fit with existing UNEP initiatives

― Partnership with UNGC

― Cross-sector or multi-sector?

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Unchaining ValueCorporate responsibility through the value chainInterviews and research

ICT

– OEMs/operators: Nokia, O2, DeutscheTelekom, HP, Panasonic

– Contract Manufacturers: Delta Electronics* – Academia: Wuppertal Institute, Öko-

Institute, Yale University

– Networks/Consultants: GRI, BSR, Verité,sustainabilityagents

– NGOs: Good Electronics, ASK, TEAN – Unions: Unite the Union

Food

– Manufacturers: SAB Miller, Unilever

– Retailers: Carrefour, Marks & Spencer

– Fast food: McDonald’s, Starbucks

– Consultants: McKinsey

– Multistakeholder initiatives & certifications:Business Social Compliance Initiative FoodModule, Common Code for the Coffee

Community, Fairtrade UK, Rainforest Alliance, SAI Platform, World CocoaFoundation

– NGOs/Think Tanks: Food Ethics Council,International Institute for Environment &Development, Oxfam*agreed to participate, results still outstanding

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Unchaining ValueCorporate responsibility through the value chainDescribing global value chains

Raw

MaterialsRefinement Suppliers

Manufac-

turing

PackagingTransport &

Distribution

Retail

CustomerEnd

Consumer

Upstream Suppliers

Potential

Re-Use or

Recycle

Information Management

Tier 2+suppliers

Outsourcing

Suppliers

Outsourcing

R&D

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Unchaining ValueCorporate responsibility through the value chainICT sector overview and key challenges

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Background F&B sector Issues Small groups


ICT sectorValue chains

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ICT sector characteristics:

– OEMs aim for strategic long-term partnerships with suppliersof high-end components and products

– Impacts (environmental/social; across sourcing, manufacturing,use, disposal) often determined in the design phase

– Performance affected by infrastructure, education, incentives,

culture, ability to reach out to workers, available technology,

etc. – Overall price pressure, outsourcing and offshoring


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ICT sector responses:

– Industry-wide efforts to set minimum standards and facilitateuptake among suppliers, notably Electronic Industries Code ofConduct (EICC) and the Global e-Sustainability Initiative (GeSI)

– Minimal uptake among contract manufacturers

– Interest in product labelling, though no significant activity


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Background ICT sector F&B sector Issues Small groups

Unchaining ValueCorporate responsibility through the value chainFood sector overview and key challenges

Value chains

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Value chains

Food sector characteristics:

– Wide range of growers, from huge agri-business tosmallholders, family and community farms

– Supply and distribution across processors, manufacturers,

distributors, retailers, middlemen

– Size and volatility of world commodity markets – Increasing demands for traceability

– Variability of supply and demand

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Value chains

Food sector responses:

– Commodity-specific, e.g. coffee, soya, palm oil – Monitoring focused on raising performance, not compliance – Broad commitments that leverage corporate distribution and

buying power via business-NGO partnerships – Focus on benefits to suppliers, beyond cost savings and

efficiency

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Value chains

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Unchaining ValueCorporate responsibility through the value chainIssues in common

Value chains

– Role of consumers: how important?

– Product labelling may present important opportunities

– The business case for suppliers is critical – Collective action, partnering and free riders

– Burden of review and documentation

– Challenges in partnering upstream and downstream, e.g.

planning, processing of information, coordination, training

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Unchaining ValueCorporate responsibility through the value chainThree-stage model:

Drivers

Value chains

Phase 1: Comply Risk management: Product safety,regulatory compliance, reputation Business value: Short-termviability, reliability and quality ofsupply

Heavy focus on supplier standards Cost minimisation and ‘policing’approach to auditing

Phase 2:Compete

Business value: cost savings (e.g.energy or material use reduction);improved productivity; strengtheneddemand from customers orconsumers

Capacity-building e.g. Trainingprograms, technical assistance Supplier engagement in developingstandards and approaches Guidelines and learningPhilanthropy

Phase 3: Lead Business value: New marketcreation; brand enhancement; long-term viability of supply; premiumquality supplyCreating value and innovation, e.g.developing livelihoods; shapingdemand and loyalty

Innovative partnerships / chainnetworksMultistakeholder collaboration toraise the level of the entire industry Institutional capacity building Efforts to measure outcomes (ratherthan inputs)

Actions

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Unchaining ValueCorporate responsibility through the value chainSmall group discussions

Value chains

– Part one: Major challenges within sectors; solutionsneeded; moving through the three phases

– Lunch break

– Part two: Highlighting good practices; evaluating

success; scope for multistakeholder initiatives

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