5 measures to create added value within the supply chain
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The new generation of socially conscious consumers is increasingly gravitating towards brands that share their values: 77% of Millennials believe that companies have a responsibility to drive social and environmental change. [1] They want to see that companies actually have a purpose and can demonstrate that it's not just a nice and shiny marketing campaign. What they are looking for are companies that don't just talk the talk, but take action. But how could this be implemented in the supply chain?
Key messages:
- Companies are successful when they align their activities with a formulated goal.
- The main purpose is to connect with customers through its products and at the same time have a positive impact on society and the environment [3].
- Companies should implement metrics to prove that they can fulfill their purpose in the supply chain.
- Regenerative agriculture can be a critical lever for creating value in the food supply chain.
Why do companies rely on purpose?
In view of the global challenges, the responsibility of companies is growing. They can no longer base their strategy on their profits alone - instead, corporate governance with the formulation of purpose can bring long-term success. We can define purpose as "a company's raison d'être beyond profit that guides its business growth and impact on society" [5]. The idea is that companies take into account social and environmental considerations and practice responsible corporate governance (ESG) to satisfy various stakeholders. For food companies, supply chains provide a wide scope to pursue the purpose. Here, many stakeholders can be involved in different locations, from food production to sourcing, manufacturing, and distribution. In addition, about 80% of emissions occur in the value chain - so addressing supply chains is a critical part of satisfying their critical climate change consumers.
5 action steps for supply chain managers
Gartner has formulated 5 action steps that supply chain managers can take to achieve the desired purpose:
1. executive commitment:
As mentioned earlier, managers risk losing their sincerity and the trust of their employees if meaningful action is not taken. According to Gartner, supply chain managers should incorporate purpose into the decision-making processes and KPIs that make up the supply chain strategy.
2. engagement in portfolio management
According to Gartner, decisions about products, purpose and marketing positions impact supply chain organizations and require them to implement the decisions. Supply chain managers must ensure that a product is promoted as sustainable and provide traceable proof of that claim.
3. align the partner ecosystem with the purpose
Supply chains can strengthen their purpose by working with partner:s across the ecosystem, but an organization can only be fully purpose-driven if its critical partner:s are aligned toward the same goal. However, according to Gartner, less than half of supply chain leaders believe that ecosystem connections are critical to supporting purpose.
4. commitment of the employees
Employee engagement must be encouraged by involving them in decision-making processes and giving them the opportunity to ask questions. This should also be encouraged when recruiting new employees: "Building a purpose-driven culture means giving employees autonomy, a basis for decision-making and the opportunity to ask questions and contribute.
5. be responsible
Accountability is necessary to reduce the risk that stakeholders will see a purpose-driven agenda as nothing more than a marketing gimmick.
"Companies are not charities," Watt said. "That said, chief supply chain officers and executives need to decide whether they want their purpose to enable long-term profits or whether the company is purely profit-driven and the purpose is just an employee engagement tool. If they choose the former, they need to put the appropriate metrics in place to prove they can deliver on those goals." [6]
The examples of Unilever and Patagonia
Food giant Unilever and apparel pioneer Patagonia are leading by example. Unilever introduced the concept of "brands with a purpose," suggesting that products like Miracle Whip serve a greater purpose than just making sandwiches taste better. Their goal, in summary: To make sustainable living commonplace.
At its core, the company has formulated the Sustainable Living Plan. Launched in 2020, the Unilever Partners with Purpose (UPWP) program aims to take purpose-driven partnerships to a new level to drive market-leading innovation and protect and regenerate nature, while also addressing supply chains.
Their strategy includes the "connected supply chain" with improved products, services and value. Among other things, they aim to deliver value by creating a positive environment for people and the planet, and by building partnerships.
Patagonia has formulated a completely purpose-driven mission: The company has radically changed its corporate strategy to focus success on environmental protection rather than growth. In 2018, the company changed its goal from "make the best product, do no unnecessary harm, use business to inspire and implement environmental solutions" to "Patagonia is in business to save our home planet."
Consider, for example, the company's wool production. Through its Supply Chain Environmental Program, Patagonia aims to create a robust standard that defines the best practices for animal welfare and land management that farmers:use. [7] This will include farm-level practices such as housing, nutrition, shearing, medical treatments, and sustainable grazing practices.
With this new corporate purpose, they have reduced the environmental impact of their supply chain over time: learning more about their suppliers' equipment and increasing collaboration on training and implementing improvements. For example, some suppliers have equipped their operations with water and air purification systems that go beyond regulatory requirements to meet Patagonia's more stringent requirements. Other companies have banned the use of hazardous chemicals and implemented procedures for the safe handling of chemicals. As of March 2020, 170 companies in 23 countries around the world have been certified, ranging from farms to brands.
What's more - you've probably already heard - the company's founder Yvon Chouinard wants to donate his future profits to the newly established Holdfast Collective foundation and invest his fortune in environmental protection - especially in measures to combat the climate crisis. All profits that are not directly reinvested in the company are to go to the foundation. According to the New York Times, that was $100 million in 2022 alone. [8]
"We had to find a way to put more money into fighting this crisis while preserving the values of the company," Chouinard added. "Hopefully this will influence a new form of capitalism that doesn't end up with a few rich people and a bunch of poor people," Chouinard told the newspaper.
We help you create value in your supply chain
At Klim, we believe that regenerative agriculture is the best solution to create merh value in the upstream agricultural supply chain of companies. For us, it's important to work at eye level with your suppliers and take their needs into account. The Klim app makes both possible: we offer farmers the opportunity to document their regenerative measures online and view the positive environmental and climate value. Companies can track the CO₂ savings of their farmers and achieve their emissions targets. The tool provides a space for exchange, shared learning and proof of the measured values. With our label, we ensure that consumers become aware of the enormous potential of regenerative agriculture and build an appreciation for the product and the farmers. In turn, the revenue generated can be used to reward the farmers, giving them an incentive and a sense of purpose.
We can achieve a holistic transformation of your supply chains by adding value through:
- Achieve net-zero targets while protecting and promoting biodiversity.
- Support your farmers and especially give them the opportunity to be part of the solution through cooperation and mutual conversion.
- Offer your customers a product that makes a positive contribution, which is visible through the transparent climate label.
Sources:
[1], [2], [3], [4], [5], [6], [7], [8]
Get more information on how to use the potential of regenerative agriculture in your business.
Similar articles you might like
Binding carbon, increasing biodiversity: CO2 certificates from regenerative agriculture
Biodiversity and climate protection: the importance of co-benefits in climate protection projects
5 measures to create added value within the supply chain
The new generation of socially conscious consumers is increasingly gravitating towards brands that share their values: 77% of Millennials believe that companies have a responsibility to drive social and environmental change. [1] They want to see that companies actually have a purpose and can demonstrate that it's not just a nice and shiny marketing campaign. What they are looking for are companies that don't just talk the talk, but take action. But how could this be implemented in the supply chain?
Key messages:
- Companies are successful when they align their activities with a formulated goal.
- The main purpose is to connect with customers through its products and at the same time have a positive impact on society and the environment [3].
- Companies should implement metrics to prove that they can fulfill their purpose in the supply chain.
- Regenerative agriculture can be a critical lever for creating value in the food supply chain.
5 action steps for supply chain managers
Gartner has formulated 5 action steps that supply chain managers can take to achieve the desired purpose:
1. executive commitment:
As mentioned earlier, managers risk losing their sincerity and the trust of their employees if meaningful action is not taken. According to Gartner, supply chain managers should incorporate purpose into the decision-making processes and KPIs that make up the supply chain strategy.
2. engagement in portfolio management
According to Gartner, decisions about products, purpose and marketing positions impact supply chain organizations and require them to implement the decisions. Supply chain managers must ensure that a product is promoted as sustainable and provide traceable proof of that claim.
3. align the partner ecosystem with the purpose
Supply chains can strengthen their purpose by working with partner:s across the ecosystem, but an organization can only be fully purpose-driven if its critical partner:s are aligned toward the same goal. However, according to Gartner, less than half of supply chain leaders believe that ecosystem connections are critical to supporting purpose.
4. commitment of the employees
Employee engagement must be encouraged by involving them in decision-making processes and giving them the opportunity to ask questions. This should also be encouraged when recruiting new employees: "Building a purpose-driven culture means giving employees autonomy, a basis for decision-making and the opportunity to ask questions and contribute.
5. be responsible
Accountability is necessary to reduce the risk that stakeholders will see a purpose-driven agenda as nothing more than a marketing gimmick.
"Companies are not charities," Watt said. "That said, chief supply chain officers and executives need to decide whether they want their purpose to enable long-term profits or whether the company is purely profit-driven and the purpose is just an employee engagement tool. If they choose the former, they need to put the appropriate metrics in place to prove they can deliver on those goals." [6]
The examples of Unilever and Patagonia
Food giant Unilever and apparel pioneer Patagonia are leading by example. Unilever introduced the concept of "brands with a purpose," suggesting that products like Miracle Whip serve a greater purpose than just making sandwiches taste better. Their goal, in summary: To make sustainable living commonplace.
At its core, the company has formulated the Sustainable Living Plan. Launched in 2020, the Unilever Partners with Purpose (UPWP) program aims to take purpose-driven partnerships to a new level to drive market-leading innovation and protect and regenerate nature, while also addressing supply chains.
Their strategy includes the "connected supply chain" with improved products, services and value. Among other things, they aim to deliver value by creating a positive environment for people and the planet, and by building partnerships.
Patagonia has formulated a completely purpose-driven mission: The company has radically changed its corporate strategy to focus success on environmental protection rather than growth. In 2018, the company changed its goal from "make the best product, do no unnecessary harm, use business to inspire and implement environmental solutions" to "Patagonia is in business to save our home planet."
Consider, for example, the company's wool production. Through its Supply Chain Environmental Program, Patagonia aims to create a robust standard that defines the best practices for animal welfare and land management that farmers:use. [7] This will include farm-level practices such as housing, nutrition, shearing, medical treatments, and sustainable grazing practices.
With this new corporate purpose, they have reduced the environmental impact of their supply chain over time: learning more about their suppliers' equipment and increasing collaboration on training and implementing improvements. For example, some suppliers have equipped their operations with water and air purification systems that go beyond regulatory requirements to meet Patagonia's more stringent requirements. Other companies have banned the use of hazardous chemicals and implemented procedures for the safe handling of chemicals. As of March 2020, 170 companies in 23 countries around the world have been certified, ranging from farms to brands.
What's more - you've probably already heard - the company's founder Yvon Chouinard wants to donate his future profits to the newly established Holdfast Collective foundation and invest his fortune in environmental protection - especially in measures to combat the climate crisis. All profits that are not directly reinvested in the company are to go to the foundation. According to the New York Times, that was $100 million in 2022 alone. [8]
"We had to find a way to put more money into fighting this crisis while preserving the values of the company," Chouinard added. "Hopefully this will influence a new form of capitalism that doesn't end up with a few rich people and a bunch of poor people," Chouinard told the newspaper.
We help you create value in your supply chain
At Klim, we believe that regenerative agriculture is the best solution to create merh value in the upstream agricultural supply chain of companies. For us, it's important to work at eye level with your suppliers and take their needs into account. The Klim app makes both possible: we offer farmers the opportunity to document their regenerative measures online and view the positive environmental and climate value. Companies can track the CO₂ savings of their farmers and achieve their emissions targets. The tool provides a space for exchange, shared learning and proof of the measured values. With our label, we ensure that consumers become aware of the enormous potential of regenerative agriculture and build an appreciation for the product and the farmers. In turn, the revenue generated can be used to reward the farmers, giving them an incentive and a sense of purpose.
We can achieve a holistic transformation of your supply chains by adding value through:
- Achieve net-zero targets while protecting and promoting biodiversity.
- Support your farmers and especially give them the opportunity to be part of the solution through cooperation and mutual conversion.
- Offer your customers a product that makes a positive contribution, which is visible through the transparent climate label.
Sources:
[1], [2], [3], [4], [5], [6], [7], [8]
Similar articles you might like
Binding carbon, increasing biodiversity: CO2 certificates from regenerative agriculture
Biodiversity and climate protection: the importance of co-benefits in climate protection projects
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