27.09.2020 | Supply chain
New study: SDGs can help companies spot unsustainable supply chains
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By mapping activities against UN’s Sustainable Development Goals (SDGs), companies can identify unsustainable gaps in their supply chains, a new study from Copenhagen Business School suggests. In Denmark, hardwood importer Keflico is already using SDGs to measure sustainable impacts.
When a major supermarket chain is marketing eco-friendly bananas, or a High Street coffee shop is donating five cents per cuppa to a reforestation project in Brazil, their glossy ad campaigns may make consumers feel assured their money will be working for a good cause.
But as single issues and narrow certification schemes are helping companies ad a green tint to brands, their owners may be ignoring or overlooking more serious impacts such as child labour and corrupt practices in their supply chains.
A new study from Copenhagen Business School is showing how businesses can use the UN Sustainable Development Goals (SDGs) to map out their individual sustainable activities, such as certification standards, and create a full overview of potential negative and positive impacts.
“Even though companies wish to support specific environmental standards, they are clearly not very well versed with the types of impact or overall ambitions of the certification standards in question. Through this process, companies are now better able to understand how they contribute to more sustainable commodity production,” said Kristjan Jespersen, Assistant Professor and lead author on the study.
In the study, Kristjan Jespersen and his students have analysed the two certification schemes RSPO (palm oil) and RTRS (soy), looking at how they contribute to the SDG’s by driving positive social, economic and environmental impacts.
“Moving past the generalities of the SDG goals, companies can now pinpoint the type of improvements their purchasing or sourcing choices may offer to communities that produce and manage these commodities,” said Kristjan Jespersen.
Blue Tree, a Danish consultancy firm focusing on SME’s, is already using the SDGs as a framework, when helping clients analysing supply chains - for instance when gathering data for sustainability reports. According to owner Nana Foxby-Jacobsen, the SDGs are creating transparency:
“Planting trees in Brazil is great, but if a company is using large quantities of water or relies heavily on transport, planting trees is not going to be of much use. By using the SDGs together with certification schemes to map out the impact of all supply chains, not only core activities, companies will be able to use certification and other sustainability activities in a far more targeted manner. It creates transparency that enables companies to use certification schemes strategically,” said Nana Foxby-Jacobsen.
“The SDGs are offering a common language. Take FSCTM, for instance. It is all about forests and environment. Many are probably unaware that this scheme also has indicators mitigating against impact on indigenous people and other social issues. By using the SDGs, this will become a lot more visible,” said Nana Foxby-Jacobsen.
“Companies may even become aware of positive impacts in areas they didn’t know about,” said Nana Foxby-Jacobsen.
Asking for documentation
In the past, Keflico, a major Danish hardwood importer, often became the unwilling target of rainforest campaigners. Recently however, a new business strategy has turned controversy into sustainability and the company’s volume of FSC and PEFC certified products has grown to 66 percent of the total turnover.
“Earlier, suppliers could get away with using sustainable activities for greenwashing, while not actually looking into the impact of their supply chains. This is all changing now. Clients are asking for documentation and measurable impact. If it is not documented, it is not done, so to speak,” said Kasper Kopp, Head of Sales and Purchase.
Keflico has worked closely with BlueTree’s Nana Foxby-Jacobsen to document and match activities against the SDG-framework, resulting in a sustainability report and valuable input to the company’s overall sustainability strategy.
“The SDG’s have helped us being concrete. While some companies are using individual certification schemes to make themselves look sustainable without even having a policy, we are able to show exactly where Keflico is making a difference. True to the matter, our sustainability reporting is verified by an independent third party,” said Kasper Kopp.
Certificates not enough
Michael Jakobsen, NEPCons Regional Director for Western Europe, who was involved in developing the method used by the CBS students, applauds this holistic approach:
”Keflico has used the SDGs to identify those areas, where they can create the strongest possible impact, which they will implement into their sustainability strategy. This is really interesting because they have gone a lot further than just communicating about the SDGs,” said Michael Jakobsen.
“At NEPCon we are working with various certification schemes because we know they can facilitate sustainable change. However, it is important to keep in mind that these certification schemes are tools to achieve specific goals and therefore needs to be considered in a broader sustainability context, as outlined by the SDGs,” said Michael Jakobsen.
He warns that companies may risk being accused of greenwashing if they use certification schemes or benchmark themselves against specific UN development goals without addressing major issues in their supply chains or in their business model.
“Greenwashing is happening just as much today, as it did before we got the SDGs. However, by using certification schemes in a holistic sustainability approach based on the SDGs, companies can better understand the full impact of their activities and how certification can play a positive role to bring about real change,” said Michael Jakobsen.
Greenwashing always a risk
Both Kristjan Jespersen, CBS, and Nana Foxby-Jakobsen, Blue Tree, agree that the SDGs can potentially be used to make a company look greener than it really is. According to Nana Foxby-Jakobsen, however, the SDG’s are significantly more detailed and therefore more operative than earlier attempts to create a common set of global development goals. Kristjan Jespersen believes this is exactly what makes them harder to use for greenwashing than previous initiatives:
“This is always the risk. Companies have long diluted their Sustainability reports. However, through the work undertaken at CBS, the use of specific SDG indicators makes companies less able to hide their commitment to driving the sustainable transition,” said Kristjan Jespersen.