Sustainability and resilience in supply chains
Problem:
• Geopolitical Tensions and Protectionism: Geopolitical concerns impact global shipping routes, and Western protectionist measures—often framed as human or environmental rights—can resemble selective imperialism, favouring US and EU interests over genuine global inclusivity.
• Challenges in Supply Chain Design and Sustainability: Current supply chains are complex and often inefficient by design, benefiting certain regions while making a low-cost, equitable transition difficult for others. This raises questions on whether sustainability goals are genuinely aimed at global benefit or tailored to suit Western standards.
• Balancing Cost, Ethics, and Resilience: Achieving sustainable supply chains requires balancing cost efficiency, ethical standards, and resilience against geopolitical risks. However, excessive frameworks and selective application of human rights principles complicate efforts to address real issues in a globally inclusive way.
Solution:
• Focus on Transparency and Data: Ensuring transparency and accurate data across the value chain is essential for meaningful sustainability efforts and risk assessment.
• Active Engagement and Collaboration: Driving engagement between banks, corporates, and private market players is key, with an emphasis on open discussions about fundamental risks rather than relying solely on Western frameworks.
• Innovative Solutions and Value Chain Certification: Sustainable progress requires innovation in sourcing alternative raw materials, full value chain certification, and a deeper commitment to addressing core issues rather than superficial standards.
Takeaways
• Global Alignment with Local Nuance: Strive for a common understanding of core principles globally, while recognising that a “one-size-fits-all” approach is ineffective and local expertise is essential for accurate insights along the value chain.
• Enhanced Role of Regulation and Activist Investors: Regulations and activist investors play crucial roles in driving progress, but regulation alone is not a complete solution and may sometimes create additional challenges.
• Proactive Engagement and Technology Use: Proactively engaging private market managers to focus on supply chain sustainability and leveraging technology for real-time monitoring can enhance accountability and drive meaningful social development.