Decoding Sustainable Sourcing with Jagjeet Singh Kandal and Rijit Sengupta
Fri Jan 13 2023
- Global supply chains impact people, planet, and profits, with over 450 million people employed in informal labor. Sustainable sourcing is becoming increasingly important for companies due to climate change, evolving consumer preferences, and compliance norms.
- Companies prioritize sustainable sourcing due to risks of biodiversity, livelihood, and climate action not being successful. They focus on key areas such as deforestation, soil and water conservation, renewables, materials, child labor, and wages. Motivations include material risk, reputational risk, license to do business, and attracting capital and talent.
- India faces complex challenges in the agriculture sector. Over 90% of farmers have less than 2 acres of land. Chemicals and intensive agriculture have corrupted the farming process and neglected soil and water resources.
- Responsible sourcing for big companies should focus on soil, water, food safety, and communication to consumers. Sustainability should not be viewed as a binary yes or no system but rather as a graduated continuous maturity journey. Certifications have not delivered on the promise of sustainability due to a lack of focus on adding value to farmers and sharing profits across the value chain.
- Profits in the value chain are concentrated at the top while costs are pushed downwards. There is a need to focus on enabling suppliers and farmers to achieve sustainability. Consumers are willing to pay for sustainability but need a choice and an actual story behind the brand.
- The foundation for sustainable sourcing is a policy and enabling environment that supports technology and access to finance for farmers and suppliers. Collaboration between government, businesses, and farmers is necessary to define living income benchmarks, provide access to finance at reasonable interest rates, and regulate power dynamics.
- Building trust and safe spaces for collaborations and dialogues is important. Mindset change in all sectors is necessary. Sustainability principles should infiltrate policy making at all levels. Balancing ecology and economy is a tradition that needs to be upheld.
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