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Supply Chain
Brands Betting the Farm on Decarbonized, Regenerative Supply Chains

At SB’23 San Diego, a variety of brands and innovators discussed on-the-ground improvements cleaning up global and regional supply chains — and how to drive them further.

The role of socially responsible procurement in building ethical, climate-resilient supply chains

Procter & Gamble is working with guar farmers in India to improve sustainability | Image credit: P&G

This Tuesday afternoon panel brought together Amanda Archila, Executive Director of Fair Trade America, Heather Terry, CEO and founder of GOODSam Foods; and John Scarchilli, Director of Brand and Scientific Communications at Herbal Essences, to discuss the opportunities and challenges in the evolving world of socially responsible procurement in supply chains.

Archila, drawing on Fair Trade’s experience working with a network of almost 2 million farmers globally, shared the perspective that socially responsible procurement is primarily about efforts at investing into communities in ways that also contribute to core business objectives — so that the company can grow while helping those suppliers facing the biggest challenges.

Terry concurred and confirmed that it is difficult to reconcile social responsibility with company growth, but that is still must be done; and it takes time to reconstruct supply chains, transforming them over time into “supply networks” where the needs of everyone can be met in a balanced way. GoodSAM, she said, is trying to build a next-generation multinational, literally from the ground up.

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To do this, she said, you need to “stay humble” and to teach and learn side by side with your suppliers, on the ground, at a local scale. This can be hard if you don’t have the resources of a traditional, large multinational.

Scarchilli said that P&G (Herbal Essences' parent company) worked with 25,000 farmers to improve best practices in socially responsible supply chain last year alone, and agreed that it was about becoming “a force for good and a force for change combined.” He discussed the company’s Sustainable Guar initiative, which is aiming to double the amount of sustainable guar that is farmed and sourced from India.

The guar bean — also known as gavar, gawar, guvar or cluster bean — is an annual legume and the source of guar gum. Valued for its conditioning and softening benefits in beauty products, guar has been cultivated in western and northwestern India for thousands of years. Herbal Essences’ program includes training in climate-smart agricultural practices to improve and stabilize guar yield and increase soil fertility. The company has also invested in communicating the benefits to consumers to help increase awareness and demand for more sustainable supply chain practices.

Terry agreed that often socially responsible procurement is about building capacity and also infrastructure for suppliers. On GoodSam’s regenerative cocoa project in Latin America, for example, their farmers were carting out hundreds of tons of cocoa on the backs of mules. Something seemingly as simple as helping build infrastructure such as roads and other modern transport networks has the potentially to dramatically improve people’s lives, she said.

The evolution of supply chain partnerships in service of regenerative livelihoods and ecosystems

Image credit: Luker Chocolate

Another Tuesday afternoon session looked at supply chain engagement through the lenses of different stakeholders. Marcela Jaramillo, VP of Marketing at Luker Chocolate — a 100-year-old chocolate company based in Colombia — emphasized that a key issue of Luker’s cocoa supply chain is the migration of rural populations to urban areas, as farmers and local residents are not finding enough opportunity to stay. For Luker, regenerative agriculture is a promising avenue to find authentic, lasting solutions to help retain farmers and ensure a prosperous future in cocoa. For Jaramillo, the initial question was, “Can there be a unique regenerative ag solution that can be done at scale to help address this local supply chain issue?” And the answer is no — when working with 65,000 different farmers, it is important to recognize the differences in their contexts, drivers, and motivations.

To create partnerships towards regeneration and better chocolate, the company needs to think about solutions that work for them. That said, Jaramillo doesn’t suggest coming up with 65,000 unique solutions; but upon engaging with enough farmers, they were able to identify types of farmers and how to cater engagement for each type. In one example, a 24-year-old farmer named Laura inherited her parents’ farm and is ready to grow specifically with regen ag and sustainable tourism in mind — looking to create a multi-faceted, positive ripple effect throughout her community. On the other hand, a farmer like Carlos, aged 67 — who is resistant to change but is motivated by his strong desire to leave a legacy for his children — demands a different customer approach than Laura. In this engagement, Luker places its emphasis on forging partnerships that involve the next generation of farmers.

Luker's Chocolate Dream initiative is a collaborative sustainability platform that unites everyday brands, farmers, universities and NGOs. This collaboration is geared toward projects such as training farmers to serve as active protectors of endangered tropical forests with the ultimate goal of working alongside local NGOs to quantify carbon credits, generating additional farmer income in the process.

As is often the case in successful supply chain engagement to reach a shared goal, the approach must involve empowering local stakeholders to build their own capacity to continue aiding themselves. Jaramillo explained the importance of “work with farmers so they can sustain themselves — not so that they need us to do that for them.”

The approach to supporting regenerative agriculture varies depending on whether it's in small communities or larger, US-based farming operations. At King Arthur Baking Company, VP of Corporate Responsibility and Sustainability Suzanne McDowell acknowledged the company’s dependence on larger agricultural suppliers for sourcing certain ingredients. To promote regenerative agriculture, the company partners with Washington State University's renowned seed breeder, Steve Jones, and supports research at WSU's Bread Lab. This collaboration focuses on developing genetically diverse crop varieties that are more resilient in today's unpredictable climate and promotes the knowledge of healthier and soil-friendly grain breeds worldwide.

Abby Ayers, Senior Director of Retail Partnerships at Fair Trade USA, observed that companies are becoming more adept at measuring their sustainability efforts — which helps in understanding the return on investment (ROI). With Fair Trade's six-year commitment to certification, retailers are realizing that transitioning to regenerative agriculture is a long-term process.

How tech and farm-level solutions can accelerate supply chain decarbonization

Kayalin Akens-Irby

Over 90 percent of emissions for most companies are found in Scope 3 — or supply chain-related — activities. With new regulations coming into effect across the globe, the pressure on organizations to understand, track and act to reduce their Scope 3 emissions is escalating faster than ever before. For consumer companies to sustain growth and still meet emissions-reduction targets, they need to sell more low-emission products. To create more low-emission products, they need to truly understand the specific drivers of emissions within each supply chain. Thus, companies need to transition from traditional spend-based (aka EEIO) carbon-accounting methods to a lifecycle assessment (LCA)-based accounting. The LCAs are crucial for understanding which processes or activities contribute the most to an organization's carbon footprint.

During a Wednesday morning breakfast session, Kayalin Akens-Irby — Head of Growth at Planet FWD — laid out a three-stage approach to accelerate scope 3 decarbonization:

  1. Measure: Current GHG data from suppliers are generally estimates and not specific to a business’ actual inputs. Getting accurate GHG measurements for each ingredient is necessary.

  2. Understand: Ensure the information is detailed enough to be able to zoom in on the specific activities and steps that are causing emissions within your supply chain.

  3. Map: When steps 1-2 are accurate, the resulting roadmap should be actionable and capable of making a substantial impact on your business.

In light of this week’s focus on regenerative agriculture, Akens-Irby highlighted the advantages of using LCA data from a regenerative-ag standpoint. Planet FWD is a technological solution that can ingest extensive data about the footprint of a supply chain into a live-data model, which enables endless what-if analyses enhanced by AI to show which action would reduce GHG the most — from cover-cropping practices of a particular supplier to implementing lightweight packaging for a particular product. As Akens-Irby asserted, the consumer sector is one of the few places that already has a lot of the innovations needed to achieve climate goals. With LCA-based carbon accounting, Chief Sustainability Officers can now move from data insights to actions faster.