Stakeholder collaboration can help management prepare for a better future: Stakeholder expertise on operations on the ground can unveil areas in supply chains where there is high risk potential and unexplored opportunities.
Companies can improve the environmental, social and economic impact of their supply chains by working with, for instance, suppliers. The challenge that climate change poses on supply chains is becoming increasingly more complex. A collaborative approach provides a robust starting point for addressing issues in a comprehensive, systematic way. Businesses can ensure that their actions create long-lasting positive impacts by collaborating with strategic partners that possess specific competences. This enables these businesses to positively affect the environment and communities they operate in, as well as their bottom line.
Every single year, the Swedish furniture giant Ikea uses nearly 1 percent of the world's cotton production. The company partnered with Better Cotton to promote the sustainable use of resources within its supply chain for cotton. This allowed Ikea not only to improve the livelihoods of 43,000 farmers in South Asia, but also to significantly reduce the amounts of costly artificial fertilizers it used. Collaborating for more sustainable supply chains should be seen as a business imperative and significant source of shared value: Healthy farmers who feel safe at work and outside of work will outperform unhealthy ones any day.
Corporate operations that include environmental and social impacts reflect a very attractive way of doing business: They foster the sustainable development of societies as such, while allowing companies to grow more dynamically. The outcome essentially reconnects environmental and community success with economic success — a factor duly noted by Swiss retail and wholesale giant Coop. By teaming up with South Pole and the World Wildlife Fund, Coop Switzerland was able to offset the emissions of all goods imported by air. This was done by investing in a community-based project that distributes efficient cookstoves to local Maasai villages in Kenya, among other activities. People from these Maasai villages currently represent the majority of the employees at Oserian Flower Farm, the Kenyan-based producer of Fair Trade certified roses, which exports flowers to Coop Switzerland. This type of client-specific development of investing in emissions reduction projects along a company's supply chain is called insetting.
Nearly everyone around the globe uses stoves to cook food. Nonetheless, a great proportion of the world's population risk respiratory diseases, poor health and premature death due to inadequate cooking stoves. Rudimentary stoves and open fires are the norm for nearly 3 billion human beings, including the Maasai people. By distributing energy-efficient cook stoves as part of the insetting project carried out by Coop and WWF, this multi-stakeholder initiative combined carbon mitigation with sustainable development.
The initiative successfully reduced emissions and harmful illnesses and halved the demand for firewood. Burning less wood saves additional trees from being cut down and shortens the time for firewood collection. This in turn translates to reducing deforestation along Coop's supply chain and maximizing school attendance of Maasai children. The multiple positive impacts of this collaborative project helped it earn the coveted Gold Standard label. This prestigious label can only be awarded if a project consults with local stakeholders, continually reduces greenhouse gas emissions, and improves both the environment and people's lives.
In summary, multi-stakeholder partnerships along companies' supply chains, such as insetting, unlock a series of positive impacts for the environment, business and society. They provide a deeper understanding of a company's stakeholder obligations and represent a genuine commitment to corporate social responsibility.