BUSINESS TO BUSINESS SUPPLY CHAINS – WHO CARES?

Cute children and baby animals. These are two of the most emotive subjects available to campaigners for sustainable supply chain practices. Whether it’s children being forced to pick cotton in Uzbekistan or orang-utans with dwindling natural habitat because of deforestation, heart wrenching stories are powerful advocates for change. Consumers can easily relate to the supply chains that influence these circumstances and shop with a conscience to reward companies who support the Better Cotton Initiative or RSPO palm oil. The images associated with these stories jump off the page and are loved by editors for their ability to get readers engaged and clicking through online.

Rewarding consumer brands with loyalty for ethical practice and influencing their sustainable behaviour through conscious consumption is important, but in terms of impact, it is business-to-business supply chains that could deliver the biggest wins. But communicating what goes on upstream in manufacturing supply chains requires much more imagination to make the subject matter cut through.

Think about an average lorry. Toyota reckons to have 30,000 components in each one of its cars. Let’s assume that commercial vehicles are in roughly the same realm. Even if the lorry itself promises to be fuel efficient and cut CO2 emissions, there are still questions about the supply chain sustainability of each of the individual components. But far fewer photo opportunities.

Data is one compelling alternative way to tell a story. Researchers at Stanford University carried out a large-scale analysis of corporate sustainable sourcing practices and shared their findings early in 2018. They found that more than half of the global companies surveyed make efforts to apply sustainability standards to their suppliers, but 70% of sustainable sourcing practices cover only a subset of input materials for a given product.  Even more concerning (but perhaps not all that surprising) is that almost all sourcing practices addressed only a single tier in the supply chain, usually first tier suppliers, such as textile factories in clothing retail. Unsurprisingly this study has generated some useful column inches, but given the importance of the subject matter, it has hardly moved the media needle.

Without a vocal mass of consumers on social media voting with their shopping baskets, who puts pressure on B2B supply chains to be sustainable and ethical? NGOs, with their limited resources have traditionally been the ones to hold upstream companies to account. They have undoubtedly punched above their weight in terms of influence with the help of the internet and citizen journalism. But now that demonstrating contribution to the SDGs is a collective responsibility within the corporate world, there’s a bigger and infinitely better resourced lobby amassing scale, capable of exerting not just influence, but also hitting businesses where it hurts financially – the investor community. Pressure from this sector has helped generate traction in high profile media.

In December 2017, the FT reported that investors with more than $26tn under management have pledged to push 100 of the highest-emitting companies worldwide to do more to tackle the threat of climate change. About 225 institutions, led by funds including HSBC Global Asset Management and Calpers, the California state employees’ pension system, joined the Climate Action 100+ initiative, intended to co-ordinate pressure on companies to cut greenhouse gas emissions, and improve disclosure and oversight of climate-related risks.

UK giant Legal & General Investment Management (LGIM) last year voted in favour of 95% of climate-related resolutions in companies that it invests in, compared with an average of 21% from other institutional investors.  Even more traditionally ‘passive’ investors, like the world’s largest asset manager Blackrock, have found their teeth, with CEO Larry Fink challenging companies to act with purpose in his now infamous 2018 letter. A quick google of ‘Larry Fink Blackrock letter’ returned 49,400 results, proof enough perhaps that money talks.

For smaller and private companies, where institutional investors hold less sway, there are other factors influencing their supply chain choices. B Corp, the ‘business as a force for good’ movement emanating from the US is spreading geographically and extending its reach from consumer facing small business into B2B and services businesses. Becoming a B Corp is a business certification that requires a supply chain audit as part of a holistic appraisal of operations and values. Danone and other corporations which have achieved B Corp certification (much harder as an established multinational) have been rewarded with huge amounts of positive attention across all media platforms.

All of this is good news for driving change at scale. But how easy will it be for businesses to seek out more ethical supply chain partners? Does conscience always cost more?

Technology buffs would argue that supply chain innovation is driving efficiencies that actually save companies money. In an article published at the end of 2016 which looked at this issue, the Wall Street Journal observed ‘The ability to measure and adjust performance relies on new technologies, as well as collaboration and communication with suppliers — and their suppliers. Technology and communication feed innovation. Innovation feeds growth.’ Investors in Blockchain start-ups would surely agree.

Although they are reported less in the mainstream media, there are many instances where B2B practices are creating entirely new product flows and commercial opportunities. Dubbed ‘web approaches’ these less linear and often asymmetrical partnerships span across large and small firms, corporates and start-ups, public and private, business and NGOs.

An example from the automotive industry is GM which is seen as a leader in supply web approaches by many. Its work in the supply chain has resulted in used water bottles being re-used in Chevrolet Equinox V-6 engine covers and air filters for 10 GM plants. A spin-off product developed in cooperation with The Empowerment Plan, a Detroit NGO is insulation for coats for the homeless.

Whilst sustainability reporting has become increasingly sophisticated and will become further standardised once GRI Standards become compulsory from July 1, media space to report on innovations like these is still scant, but awards are springing up that create a focus for specific supply chain innovation – such as the Global Good Awards for Sustainable Supply Chain, Edie.net’s Sustainability Leaders Awards and Business Green’s new Supply Chain Project of the Year category for 2018.

At best, business-to-business supply chains are shaping up to be catalysts for innovation that rewards companies with new revenue streams. But there is still a long way to go before every component or service is sourced as sustainably as possible.

The good news in terms of where the pressure is coming from is that there is a growing band of activist stakeholders from investors to procurement managers asking for sustainability assurances in contracts. Their influence is underpinned by positive role modelling of award winners and case studies in media. Added up, it certainly shows that B2B supply chains are getting more of the attention and spotlight they deserve.

Narda Shirley and Gong Communications are hosting a roundtable discussion, called ‘Business to business supply chains: Who cares?’, today (25 April) at The Crowd’s XComms event.

DOES CULTURE REALLY HAVE TO COME FROM THE TOP?

Narda Shirley, managing director, Gong Communications

In a pressured corporate environment, organisational culture – the purpose, values and behaviours that characterise a business – are widely understood to be a more effective route to decision making with integrity than a rulebook.

From Simon Sinek’s book Start with Why? to Larry Fink’s annual Blackrock CEO letter, we know that we should care about culture to attract and retain the best talent and impress leading investors. A strong culture mitigates reputational risk and adds value.

EY and HBR tell us that culture starts at the top with the Board and good governance and with strong narratives and corporate stories. But not every company can have an activist CEO like Paul Polman or a purposeful founder like Elon Musk to motivate the team and charm the media.

The reality in most organisations is that if the Board isn’t prioritising it, culture isn’t anybody’s actual responsibility. Unless the culture is actively broken (Oxfam, Bell Pottinger, The Weinstein Company) and people are leaving in droves, or the business is on the rocks because of a cultural misdemeanour, it doesn’t usually warrant much pro-active attention. It’s more likely that culture is viewed as ‘just the way things get done around here.’

But external factors like climate change, plastic in the oceans, the gender pay gap, sexual harassment and the sustainable development goals are forcing the issue. Organisations are self-selecting into two camps: those that are heads-up and engaged with the world and others that are head down and pursuing business as usual.

We would argue that taking single use plastic out of the supply chain is a cultural as much as an operational issue. It requires a massive effort to make a change like that in a big organisation. It takes determination to push against the status quo, lobbying various stakeholders around the business to get buy-in and support. And there’s no guarantee of any positive outcome other than the knowledge that as a company you have acted with integrity. The reward will hopefully come in terms of customer loyalty and team motivation but that’s going to be quite hard to quantify in absolute terms.

View the full article here

LOVE CHRISTMAS, HATE FOOD WASTE

Libby Wyman, account director, Gong Communications

I love Christmas.  I’m obsessed with it. On the 1st of December, like clockwork, Mariah Carey’s ‘All I want for Christmas’ rings out from every speaker, and along with it, I prepare to gain an extra kilo or two accompanied by a dollop of food guilt. I blame the stream of client and journalist Christmas lunches, festive catch-ups with friends and a massive family meal….all of which probably create tens of kilograms of food waste. And here’s where it gets a bit ‘Grinchy’…

Globally, we waste one third of all food produced.  That’s 1.3 billion tons per year or the equivalent of about 325 million turkeys. The resource needed for this food waste bonanza is staggering. It’s enough to fill the combined land mass of Canada and India and the equivalent of three refills of Lake Geneva. And the cost of this waste?  £1 billion worth of food is binned worldwide each year according to WRAP – much of it accumulated at this time of year.  If that isn’t enough to make your eyes bulge and your pocket hurt, I could move on to the associated deforestation impacts of this never-to-be-eaten food production (roughly 20% of all deforestation), but it’s Christmas so let’s move on to something a bit jollier.

The good news is progress is being made. Earlier this month the East of England Co-op announced it would sell food products past their sell by date for 10p, urging consumers: ‘Don’t be a binner. Eat it for dinner’. It estimates this could save over 50,000 products annually from landfill. While progressive legislation in France has made it illegal for supermarkets to throw away food waste since 2016, instead compelling them to donate it to foodbanks and charities. This, alongside other policies to limit consumer waste has resulted in it being lauded as the top performing nation by the most recent Sustainable Food Index, while food-obsessed Italy came out trumps in sustainable agriculture.

In developing countries, where many of our clients’ global supply chains originate, up to 40% of food is lost during harvest, drying and pre-consumption storage and transport. Our client Olam Cocoa is taking a lead in tackling Sustainable Development Goal 12.3 (to halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains), by supporting farming communities where food waste is at the centre of a knot of complex issues, such as climate change, land degradation and gender disparity.

So, while big businesses are figuring out how to limit waste within their food supply chains, we’re also starting to see a corresponding shift in consumer attitudes – something I personally find encouraging. Whilst taking part in a recent B-Corp hackathon tackling SDG 12 (responsible production and consumption), a straw poll identified that the majority of people would take the sustainability, including waste management, of a restaurant into account when selecting somewhere to eat. However, what’s lacking at the moment is the platform for consumers to find these places to assert this choice.

Tackling food waste is an issue we all have a stake in, whether it’s a company re-thinking its practices or an individual planning their shopping list more consciously. What’s needed now is scalable innovation and a shared commitment to change.

For my part, it’s hugely rewarding to help clients communicate their contribution to sustainable food supply and on a personal level,  bring on those turkey leftovers!

Further food for thought:

• The World Food Programmes report: Counting the Beans – The true cost of a plate of food around the world, November 2017
• The Food Sustainability Index, December 2017
• Capgemini’s report: The Role of Retailers and Technology in Reducing Consumer Food Waste
• Wasted! The story of food waste

MORE TO REPUTATION THAN A SHARE PRICE

Nikki Francis-Jones, associate director, Gong Communications

For decades to come, events on United Airlines Flight 3411 on Sunday 9th April and the aftermath will go down in the annals as a ‘how not to’ manage a PR crisis in the digital age.

But before students can get their hands on it Nikki Francis-Jones looks at the lessons that can be learned and what the full scale of the reputational damage might be.

View the full article here

WHY SLOW BURNS CAN BE THE BRIGHTEST

Amanda Lyons, associate director, Gong Communications

Much as I dislike most of the caricatures about PR folk, the image of the time-poor, plate-spinning, device-juggling communications professional isn’t much of an exaggeration. Whether agency or in-house, the demands of a permanently ‘on’ 24/7 media environment and satisfying the competing needs of multiple stakeholders mean that we constantly run in the fast lane.

 
Although brand building requires quick thinking and speedy delivery, it’s important to take the time to slow down for a moment and appreciate that not all great things happen in a flash. At Gong we’ve been reminded of this over the last few months. Some of our biggest and best ideas have literally taken years to come to fruition. For example, creating an anthology of perspectives from global leaders and a ground-breaking symposium to convene great minds to tackle some of the most challenging food security issues for one client. Both of these were a slow burn to progress from concept to reality – but the results were more than worth the wait.

 
Achieving industry change or engaging high profile thought leaders in a meaningful conversation is a different model to opportunistic activations to generate a quick win. For us, getting big ideas off the ground is a mastery of helping clients to secure buy-in from internal supporters and budget holders, securing the right people to participate, timing any outreach with the broader corporate strategy, as well as making sure the stars align with what’s going on in clients’ industries and the wider world.

 
We’re also reminded of this in business development. As with our personal lives, timing plays a great part in whether a relationship is going to get off the ground and grow into something beautiful. In January we supported The END Fund to communicate its inspiring agenda at Davos – a client that we started initial conversations with nearly three years ago and hope to work with for a long time to come.

 
So to everyone out there, whether you’re working in a corporate communications agency or building brands and reputations in-house, let’s remind ourselves that there’re more to results than short-term success. When we experience barriers to getting projects over the line or converting an opportunity into an outcome, we need to keep sight of the big vision. Let’s have faith that we’ll achieve it because patience (and determination) isn’t just virtuous, it’s valuable.