Stanford University analysis of practices for sourcing sustainable materials shows most companies deal with only a few materials within a small portion of their supply chains
Companies' efforts to apply sustainability practices across their supply chains may be much more limited in scope than those buying their products realise, new research by Stanford University published today suggests.
A large scale analysis of corporate sustainable sourcing practices carried out by researchers at the University found more than half of the global companies surveyed make efforts to apply sustainability standards among their suppliers.
Yet these efforts tended to have far more limited reach across supply chains than many consumers might imagine, especially given that product labelling often touts the use of high ethical or environmentally beneficial standards in production, the researchers concluded.
Study co-author Joann de Zegher, a postdoctoral fellow at the Stanford Graduate School of Business, said supply chains touched more than 80 per cent of global trade while employing more than one in five workers. He added that as such corporate supply chains have the potential to play a key role in achieving the UN's Sustainable Development Goals (SDGs).
"Advancing environmental and social goals in supply chains can quickly become very complex," he said. "This complexity is reflected in our findings that companies use a broad range of strategies and that current efforts have limited reach."
Using the UN's Sustainable Development Goals (SDGs) as a benchmark, the study paper - which is published in the Proceedings of the National Academy of Sciences journal - analyses 449 publicly listed companies in the food, textile, and wood products sectors. It found around half use some form of sustainable sourcing practice such as third-party certification of standards or environmental training for suppliers.
However, it found more than 70 per cent of sustainable sourcing practices cover only a subset of input materials for a given product. For example, researchers said, a company might use recycled materials for the packaging of a product, but leave the remainder of a product's upstream impact unaddressed.
The researchers also found only 15 per cent of sustainable sourcing practices focus on health, energy, infrastructure, climate change, education, gender or poverty, while more than a quarter of sustainable practices apply to only a single product line rather than across a firm's entire portfolio.
Moreover, almost all sourcing practices addressed only a single tier in the supply chain, usually first tier suppliers such as textile factories that sew t-shirts, for example. Often, however, remaining processes such as dying the cloth to grow the cotton remain unaddressed, the researchers explained.
Amy consumer assuming that a sustainable supply chain label or certification means the highest environmental standards are being adopted across the board will often be sadly mistaken.
But study co-author Professor Eric Lambin, from Stanford's School of Earth, Energy & Environmental Sciences, said there were also positive findings for consumers to consider, describing the overall findings as both "a glass half full and half empty" for corporate sustainability.
Namely, the study said companies on the receiving end of consumer and civil society pressure are "significantly more likely" to adopt at least one sustainable sourcing practice.
As such, companies based in countries with many active green groups and NGOs are more likely to use sustainable sourcing practices, concluded study lead author Tannis Thorlakson, a graduate student in the at Stanford's School of Earth, Energy & Environmental Sciences.
"The pressure consumers put on firms when they demand more sustainable products might be paying off," said Thorlakson. "I hope this paper acts as a call to action for those 48 per cent of companies that aren't doing anything to address sustainability challenges in their supply chain."
Green supply chain practices are on the march, but as environmental campaign groups have long feared there is a long way still to travel.
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Many consumer-facing companies with recognizable brands are taking action, but companies lower down in the supply chain are not, a new study finds