Supply chains are vastly unequal. Organizations closest to the consumer often capture the most value, leaving many in the first mile with just a minimum proportion of the profits. This inequality has been routinely demonstrated in agricultural supply chains.

The cocoa supply chain – from bean to chocolate bar

On average, cocoa farmers earn just 6% of the final value of a bar of chocolate, yet shoulder much of the increasing price of production. (Source: Fairtrade) As a result of this, combined with the effects of climate change and lack of access to financing, farming communities are facing hunger and poverty, and production is dwindling. Farmers with poor access to technology, information and quality inputs often resort to desperate measures such as child labor, irresponsible use of chemicals and slash-and-burn techniques which result in uncontrollable destruction and pollution to land, water, and air. The same is often true for many of today’s agricultural supply chains, especially when cultivation is focused in less wealthy producer nations in the Global South, trade consists of a long line of middlemen and market share is largely consolidated.

Addressing inequalities in supply chains clearly is an enabler towards greater sustainability. But how can we do it? Let’s take a closer look at four main elements: traceability, responsibility, transparency, and multi-stakeholder collaborations.

💡 Traceability is often the first step – it’s a fundamental principle that offers visibility into complex supply chains. It may not be as easy as it sounds. Large organizations with countless business interactions may struggle to map out all their Tier 1 suppliers, and rather approach this in terms of risk and relevancy. There are certain products, raw materials, geographies, and processes that pose higher sustainability risk than others. Once you have identified where intervention and oversight is most required, I would recommend making your map deep rather than simply wide – this creates an understanding of how your products are sourced, produced, transported, and ultimately disposed.

💡 Responsibility in supply chains can take many forms. Product stewardship - which addresses the entire lifecycle of a product, from design and conception to end-of-life management - facilitates a holistic view: it can serve as a viewpoint from which businesses can look at the full value chain journey of their products to unlock previously untapped potential for change. Pairing this approach with traceability can help companies address the environmental and social impacts resulting from each stage of the production, transport, and consumption of a product, and identify the parties with whom they should work more closely.

"With accusations of corporate greenwashing growing, an open approach to reporting, mapping, and engagement is necessary to ensure the consumer (and regulators) that a brand is committed to real, actionable change."

💡 Transparency is more than just communicating progress, it is also a measure of progress itself when companies choose to share information that fosters greater cooperation towards common sustainability goals. It’s great to see how companies such as Marks & Spencer (M&S) have published a public Interactive Supplier Map to demonstrate their commitment to transparency, and how solution providers such as Sourcemap are making enterprise software for end-to-end supply chain visibility that helps companies accelerate achievements. With accusations of corporate greenwashing growing, an open approach to reporting, mapping, and engagement is necessary to ensure the consumer (and regulators) that a brand is committed to real, actionable change.

💡 Multi-stakeholder collaborations and engagement across global supply chains and sectors are needed to achieve the above - it is not possible to navigate the complexity of supply chain challenges alone. Cross-sector and pre-competitive approaches have proven effective in stimulating efforts. An interesting example: The Farm to Market Alliance (FtMA) that helps African smallholder farmers transition to commercial agriculture by providing adequate information, investment and support at all stages of the process – from seed to market. They place producers at the center of these efforts, by combining public-private partnerships to empower smallholder farmers.

There lies both a business case and a human case for introducing more traceability, responsibility, and transparency into both upstream and downstream supply chains. On the one hand, it enables organizations to prepare and respond to risks as well as identify opportunities for improvement where there are points of friction or inefficiencies. On the other hand, improving the livelihoods of producer communities, increasing the lifecycle of products, and reducing our impact on the environment secures a continuous and reliable source of materials. All this adds to the trustworthiness of a brand or industry, and appeals towards today’s increasingly conscientious and informed consumer. Companies that better understand how to use sustainability to gain consumer confidence will come out ahead of the curve as sustainability is increasingly becoming a key driver of brand selection.