Building Greater Sustainability in Supply Chains

A companyrsquos sup-

ply chain is inte-

gral to its business

operations plan-

ning risk manage-

ment and profit

level Disruptions in

a supply chain due

to plant closures

shutdowns quality issues or shortage of key

resources can significantly disrupt a companyrsquos

production cycle product sales and employment

level (Accenture 2013 Hayward et al 2013)

As Kiron Kruschwitz Haanes Reeves and

Goh (2013) state

As companies in many industries grapple

with costs they are turning to their sup-

ply chains to reduce energy use simplify

packaging mitigate commodity price risks

and meet customer sustainability expecta-

tions (p 3)

Sustainability is increasingly used by companies

to evaluate their performance It is also being used

by stakeholders to evaluate companies In addition

managers of companies are increasingly including

environmental impacts from their supply chains

when they are estimating their overall environmental

footprints Moreover corporate managers are in-

creasingly recognizing that their companiesrsquo per-

formances and

reputations can be

affected by the per-

formance of their

supply chainsmdashand

stakeholders are ask-

ing companies to

do more (Unilever

2011)

Further indication of the increased impor-

tance of including supply chains in sustainability

strategies can be found in the Global Reporting

Initiativersquos (GRI) new G4 sustainability report-

ing guidelines which include two supply chain

indicators under its Supplier Environmental As-

sessment aspect These indicators are G4-EN32

ldquoPercentage of New Suppliers That Were Screened

Using Environmental Criteriardquo and G4-EN33

ldquoSignificant Actual and Potential Negative En-

vironmental Impacts in the Supply Chain and

Actions Takenrdquo (GRI 2013)

Reducing Supply Chain Risks and Increasing Sustainability

Several companies have described the impor-

tance of their supply chains to their business and

environmental performance and strategy Baxter

Environmental Quality Management DOI 101002tqem Summer 2014 13

Published 2014 This article is a US Government work and is in the public domain in the USAPublished online in Wiley Online Library (wileyonlinelibrarycom)DOI 101002tqem21376

Richard M Kashmanian and

Justin R Moore

Building Greater Sustainability in Supply Chains

Challenges companies face and

tools they use to identify and reduce

their environmental footprints

across their supply chains

Richard M Kashmanian and Justin R Moore14 Summer 2014 Environmental Quality Management DOI 101002tqem

Coca-Cola considers a healthy secure and

sustainable agricultural supply chain to be critical

to protecting the well-being of the communities

in which it operates meeting the expectations of

its stakeholders including consumers and cus-

tomers and enabling the success and growth of

its business (Coca-Cola 2013a)

In its operating context and strategy Gap Inc

states ldquoWe are strengthening our environmental

strategy to focus more comprehensively on our

supply chain to ensure that our company thrives

in a rapidly evolving business environmentrdquo

(Gap 2014b bullet 3)

Unilever set a goal in 2010 to double its sales by

2020 while reducing environmental impacts from

its products by 50 adding ldquoonly through part-

nering with our suppliers will sustainable and prof-

itable growth be achievablerdquo (Unilever 2011 p 1)

Tesco expresses a similar sentiment by linking

its supply chain to the companyrsquos sustainability

with the statement ldquoOur strong belief is that

we cannot build a sustainable business on an

unsustainable supply chainrdquo (Tesco 2013 p 37)

In addition Coca-Cola McDonaldrsquos Nestle

PepsiCo Procter amp Gamble SC Johnson Uni-

lever and other companies refer to responsible

andor sustainable sourcing

Supply Chain Impacts on CompaniesA companyrsquos supply chain can represent a

significant percentage of its overall environmen-

tal impact during the lifecycle of its products For

example 96 of Timberlandrsquos carbon footprint

takes place within its value chain beyond its

owned operations (Timberland 2013) McDon-

aldrsquos estimates that approximately two thirds of

its carbon footprint is associated with its sup-

ply chain with livestock as the biggest driver

of emissions (Starr 2013) Unilever determined

that some of its biggest impacts (eg greenhouse

emissions waste and water use) occur in its sup-

ply chain (Unilever 2011)

made the following statement in a document

discussing its supply chain

Given the size scope and complexity of

a companyrsquos supply chain especially for

a large multinational organization like

Baxter supply chain focused sustainabil-

ity initiatives can have dramatic posi-

tive contributions to a companyrsquos overall

sustainability efforts For healthcare

companies maintaining a safe secure

and reliable supply chain is essential to

ensure patient safety Also a significant

amount of a companyrsquos overall environ-

mental footprint is represented by its

supply chain so collaborating with sup-

pliers to improve their performance can

collectively support the companyrsquos overall

performance (Baxter 2013a para 1)

Baxter also makes

a clear connection be-

tween its suppliersrsquo

and the companyrsquos

performance in its

ldquoSupplier Quality Stan-

dardrdquo stating ldquoBaxter

is committed to developing manufacturing pro-

cesses that are inherently less wasteful and haz-

ardous minimizing or eliminating adverse envi-

ronmental impacts from the beginningrdquo (Baxter

2011 p 4) In the same document the writers

go on to say ldquoBaxterrsquos suppliers are responsible

for the quality related activities of their sup-

pliers subcontractors service providers andor

material sourcesrdquo (Baxter 2011 p 4) Baxterrsquos

requests for proposals and supplier agreements

ask each supplier for its sustainability policy

mission statement and information about how

the supplierrsquos sustainability initiatives will sup-

port the companyrsquos (Baxterrsquos) sustainability goals

(Baxter 2013b)

A companyrsquos supply chain can represent a significant percentage of its overall environmental impact during the lifecycle of its products

Environmental Quality Management DOI 101002tqem Summer 2014 15Building Greater Sustainability in Supply Chains

help our suppliers improve labor health

and safety and environmental conditions

in the workplace and to help our suppli-

ers understand how to move from basic to

leadership sustainability practices (Pata-

gonia nd p 1)

Further the company states that it takes a col-

laborative approach because its

[S]uppliers are jointly responsible for

ensuring social and environmental re-

sponsibility and the integrity of [its] prod-

uct content claims

from the farm

through the fin-

ished goods factory

level The only way

to work towards

this goal is to have

transparency and

traceability into all levels of [its] supply

chain (Patagonia nd p 4)

Writing for The Economist in a 2008 column

The Economistrsquos Intelligence Unit asserted that com-

panies were paying too little attention to their sup-

ply chains The writers emphasized the importance

of considering the stakeholder perspective warn-

ing ldquoInattention to supply chains shows a failure

to understand how societal expectations are chang-

ingrdquo (The Economist Intelligence Unit 2008 p 23)

Increasing Efforts to Build Greater Sustainability in Supply Chains

According to a survey of corporations pub-

lished in 2010 by the UN Global Compactndash

Accenture 81 of company chief executive offi-

cers (CEOs) believed that sustainability issues were

fully embedded in their companyrsquos strategy and

operations (Lacy Cooper Hayward amp Neuberger

2010) However according to the same survey

Coca-Cola worked with the Water Footprint

Network (WFN) The Nature Conservancy (TNC)

and the World Wildlife Fund (WWF) to estimate

the water embedded in its products They first

assessed the full water footprint of Coca-Colarsquos

most popular product and determined that 99

was due to its supply chain and in particular

from growing sugar (ie 80 of the total Coca-

Cola 2011) Similarly Nestle recognized that its

biggest water impacts and risks are from its agri-

cultural supply chain (Nestle 2013d)

A companyrsquos supply chain can also affect its

reputation and how it is perceived by the market-

place and by its stakeholders For example

At McDonaldrsquos our Core Values are in-

tegral to how we do business and we

expect our suppliers to respect and pro-

mote these values We recognize that

our suppliers are independent businesses

However the actions of our business

partners can be attributed to McDonaldrsquos

affecting our reputation and the level of

trust we have earned from customers and

others At a minimum we require

that all suppliers and their facilities meet

the standards and promote the principles

outlined in [our Supplier] Code which are

intended to advance McDonaldrsquos com-

mitment to all aspects of sustainability

(ethical environmental and economic)

(McDonaldrsquos 2012 p 4)

A companyrsquos reputation can also be affected

by the performance of a sister facility to one of

its suppliers (Starr 2013)

Patagonia has as its mission to

[B]uild the best product cause no unnec-

essary harm and use business to inspire

and implement solutions to the environ-

mental crisis Patagonia pledges to

A companyrsquos supply chain can also affect its reputation and how it is perceived by the marketplace and

by its stakeholders


businessmdashthat is into capabilities processes

and systemsrdquo (p 11)

As stated in the results of another global

survey by McKinsey amp Company the writers

comment ldquoMost companies are still strug-

gling to factor sustainability into the rsquohardrsquo areas

of their business such as supply chainrdquo (McKinsey

amp Company 2011 p 11)

When the accounting firm Deloitte asked

companies in its own survey which was pub-

lished in 2010 to identify those areas where

increasing sustainability was most important to

them the top three responses were

bull Manufacturing process and operations (46)

bull Brand enhancements and perception (31) and

bull Supply chain (21) (Deloitte 2010)

The challenge that companies face integrat-

ing sustainability fully was emphasized in the

UN Global CompactndashAccenturersquos 2013 corporate

survey where the difficulty of implementing

sustainability throughout a companyrsquos supply

chains was considered to be one of the top

four barriers to full integration of sustainability

(Hayward et al 2013)1

Further in the 2010 UN Global Compactndash

Accenture survey the writers stated

Most CEOs said they were paying greater

attention to the activities of their suppli-

ers however an equal number of respon-

dents expressed concerns about whether

they can effectively manage sustainability

issues throughout such large complex

supplier networks (Lacy et al 2010 p 35)

According to a recent study published in

2013 by UL which was conducted to better un-

derstand manufacturer and consumer concerns

about products supply chains were considered to

be a significant and increasing priority The study

Although 88 percent of CEOs believe that

they should be integrating sustainability

through their supply chain just 54 per-

cent believe that this is being achieved

within their own company (Lacy et al

2010 p 35)

This survey finding points to a disparity be-

tween the direction in which companies want

to move how much progress they believe they

have made in this direction and the difficulty in

making progress That is many companies un-

derstand the importance of being more sustain-

able from a global competitiveness perspective

and in a world of growing and more competi-

tive country economies increasing population

and constraining re-

sources Indeed ac-

cording to a corpo-

rate survey published

in The Economist

again authored by

The Economistrsquos Intel-

ligence Unit (2010)

ldquo87 of respondents

agree that sustainabil-

ity will become more

important over the next three yearsrdquo (p 2)

Hayward et al (2013) referred to this as the dif-

ference between ambition and execution and

acknowledged that the recent world economic

recession has had a dampening effect on com-

pany sustainability plans

This interest in making further progress in

implementing integrating and building greater

sustainability has been noted in other surveys

For example in the UN Global Compactndash

Accenture survey published in 2010 which was

referenced previously authors Lacy et al (2010)

state ldquowhile sustainability has clearly become

part and parcel of how many businesses oper-

ate it has yet to permeate all elements of core

Many companies understand the importance of being more sustainable from a global competitiveness perspective and in a world of growing and more competitive country economies increasing population and constraining resources


It is not always clear how inclusive a companyrsquos

supplier code of conduct is ie whether the code

applies only to the companyrsquos tier 1 suppliers or

to its tier 1 and subtier 1 suppliers In addition

suppliers that have multiple customers may also

have multiple supplier codes of conduct with

which they must conform

Companies are increasingly being asked by

their customers public interest groups and

other stakeholders to be more responsible for

their supply chains and to be more transparent

There are several dimensions to this increased

responsibility Given how vast diverse and

global supply chains have become this article

focuses on the extent to which these tools are

being used to reach beyond tier 1 suppliers also

referred to as subtier 1 suppliers To address this

issue interviews were

conducted of repre-

sentatives from several

compan ie smdashCoca -

Cola Mars Inc Mc-

Donaldrsquos Staples and

VF Corporationmdashas

well as representatives

from several organi-

zationsmdashAIM-PROGRESS BSR Environmental

Defense Fund (EDF) and Sustainable Apparel

Coalition (SAC)

Reaching Beyond Tier 1 SuppliersIncreased responsibility for its supply chain

may expand the reach of a companyrsquos supplier

codes of conduct beyond tier 1 suppliers andor

require that the company supplement its supplier

codes with additional tools to expand and bolster

supplier engagement There can be a cascading

effect such that a company expects that each tier

of its supply chain will have similar codes of con-

duct for its own suppliers

For example McDonaldrsquos states in its supplier

code ldquoWe expect suppliers to hold their supply

chain including subcontractors and third-party

identified seven rising priorities or emerging driv-

ers of growing importance over half of which re-

late to supply chains In fact nearly half of the re-

spondents from the manufacturing sector claimed

that they would increase global sourcing over the

next five years (UL 2013) The study states

For manufacturers and consumers glo-

balization is contributing new complexity

and heightening the importance of emerg-

ing considerations such as transparency

traceability ethical sourcing and country

of origin (UL 2013 p 5)

Thus for companies engaging with their

supply chains is expected to become both more

important to address consumer sustainability

concerns and more challenging in the future

Engaging Supply ChainsCompanies employ a number of tools to en-

gage with their suppliers and improve their per-

formance (BSR amp UN Global Compact 2010) For

example Lee and Kashmanian (2013) assessed the

use of supplier codes of conduct supplier audits

monitoring and supplier sustainability perfor-

mance scorecards Other tools include companies

providing technical assistance information edu-

cation incentives and awards to suppliers and

third parties sharing supplier audit findings and

leading practices with companies and suppliers

Many companies have developed supplier

codes of conduct to state their expectations of

suppliers (eg to be in compliance with laws

regulations and standards) There has been much

attention in the literature on supplier codes of

conduct and their key elements (eg BSR amp UN

Global Compact 2010 Keller 2008 Kolk amp van

Tulder 2002 Lee amp Kashmanian 2013)

BSR considers the supplier code of conduct

to be a part of the initial stage that companies

go through to engage with their suppliers and to

raise supplier awareness of their expectations2

For companies engaging with their supply chains is expected to

become both more important to address consumer sustainability



that these ingredients are sustainably sourced

(Coca-Cola 2013b)

Patagonia takes a similar approach Its

document ldquoWorking with Factoriesrdquo states

ldquoRequirements in this Code apply to the whole

supply chain including sub-suppliers sub-con-

tractors and farmsrdquo (Patagonia 2013b p 1)

VF Corporationrsquos Global Compliance Principles

ldquoapply to all facilities that produce goods for VF

Corporation or any of its subsidiaries divisions or

affiliates including facilities owned and operated

by VF and its contractors agents and suppliersrdquo

(VF nd p 1) In its 2013 document on factory

audit procedures VF provides additional clarifica-

tion regarding the reach of its supply chain

This will include all cutting facilities sew-

ing plants screen printers embroiderers

laundries and packaging locations At

[VFrsquos] discretion audits may also encom-

pass raw material suppliers for knit and

woven fabrics tanneries and branded

component suppliers (VF 2013 p 1)

Furthermore the companyrsquos audit procedures

document states that ldquoFacilities are expected to

make sustainable improvements in environmen-

tal performance and require the same of their

suppliers and sub-contractorsrdquo (VF nd p 3)

The auditmonitoring mechanism is an im-

portant tool that companies use to determine

whether their suppliers are conforming to their

codes of conduct Audits can be conducted by

the company or by a third-party organization

Audits are typically conducted of tier 1 suppliers

and there are some cases where a company will

also audit its tier 2 suppliers directly or through a

third-party organization (VF 2013)

Patagonia (2013a) conducted environmental

and social audits of 90 of its supply chain in

2010 including audits of subcontractors of its

primary cut-and-sew factories4 Timberland as a

labor agencies to the same standards contained in

this Coderdquo (McDonaldrsquos 2012 p 4) Staples states

ldquoWe strongly recommend that our other branded

suppliers and subcontractors comply with our

Code or similar standardsrdquo (Staples 2011 p 1)

The Electronic Industry Citizenship Coalitionreg

(EICC) supplier code of conduct states even more

strongly ldquoParticipants must regard the Code as a

total supply chain initiative At a minimum Par-

ticipants shall also require its next tier suppliers

to acknowledge and implement the Coderdquo (Elec-

tronic Industry Citizenship Coalition 2012 p 1)3

AIM-PROGRESS is a global forum for consumer

goods manufacturers and their common suppliers

that is designed to promote responsible sourc-

ing practices through-

out supply chains It is

based on the principle

that each supply tier

should pass along simi-

lar responsible sourcing

expectations and mir-

ror a similar code of

conduct to its suppli-

ers as brand manufacturers expect of their supply

chain partners (Recke 2013)

Alternatively a company could reference all

of its tiers of suppliers in its code of conduct

For example Nestlersquos supplier code of conduct

applies to its suppliers and their subcontractors

and refers to ldquofarming practices and agricultural

production systemsrdquo as part of its supply chain

and their need to be ldquofully awarerdquo (Nestle 2010

p 1 and 3 respectively 2013c) of the code of

conduct implying that its supplier code reaches

beyond its tier 1 suppliers Nestle states that it

has ldquodirect contactrdquo with more than 690000

farmers in its global agricultural supply chain

(Nestle 2012a) Coca-Cola has developed a set

of Sustainable Agriculture Guiding Principles to

provide guidance to the growers of its agricultural

ingredients and works with its suppliers to ensure

The auditmonitoring mechanism is an important tool that companies use to determine whether their suppliers are conforming to their codes of conduct


into the owned andor subcontracted

farms mills plants factories and other

sites that are involved in the production of

[its] products (Patagonia nd p 4)

ldquoIt should be easier to trace a high-value com-

plex product whether manufactured or agricul-

tural than an interchangeable commodity because

companies selling the former product likely need

to have a better handle on their supply chains to

ensure their product is made to specifications such

that there is minimal risk to the company reputa-

tion and brand valuerdquo

(Hutson 2013) In the

case of Coca-Cola for

example about one half

of what the company

buys is agriculture re-

lated so agriculture is its

big focus with subtier 1

suppliers (Jordan 2013)

Because it is a good

practice for a company

to know who are its tier 1 suppliers (Norton 2013)

identifying tier 1 suppliers andor direct manufac-

turers may be a first step in mapping out its supply

chain A company may segment its suppliers into

groups (eg direct and indirect) Mars considers

suppliers of inputs for its products to be its direct

suppliers and suppliers of capital goods building in-

sulation office supplies furniture electronics etc to

be its indirect suppliers (Spitzley 2013) When Mc-

Donaldrsquos is selecting the suppliers for its restaurants

the company considers distribution centers and final

processing facilities to be its direct suppliers and

primary processing plants production plants farms

and ranches to be its indirect suppliers (McDonaldrsquos

2013c) If a company groups its suppliers using

methods similar to the examples just given it may

identify key or strategic suppliers as a follow-up step

To better understand these mapping challenges

it is helpful to know that company supply chains

VF brand has decided to have all of its tanner-

ies audited according to both VFrsquos Compliance

Principles (VF nd) and the Leather Working

Grouprsquos (LWG) environmental protocols (Von

Haden 2013) Alternatively it is also possible for

a tier 1 supplier to take on the responsibility of

auditing its suppliers and so forth

Mapping Supply Chains Increasing Supply Chain Traceability

Information is key to knowing whether

subtier 1 suppliers are conforming to a code of

conduct This includes information regarding

which suppliers are part of a companyrsquos supply

chain as well as information collected as part of a

supplier audit To communicate its conformance

expectations to its subtier 1 suppliers it is ben-

eficial for a company to be able to map out its

supply chain Although mapping its supply chain

can be challenging for a company particularly

if many of its suppliers are located in far away

locations or if the suppliers change frequently to

accommodatemdashfor examplemdashchanging designs

requirements etc mapping may provide great

value by helping a company understand just how

sustainable its supply chain really is

Many companies may not know who all of their

tier 1 suppliers are or where they are located They

are probably even less likely to know who their sub-

tier 1 suppliers are and where they are located Many

other companies possess this information however

For example HP provides a list of its top suppliers

collectively representing 95 of its procurement ex-

penditures to promote transparency in the electron-

ics industry (HP 2013b) and Patagonia identifies

textile mills and factories in its supply chain (Patago-

nia 2013a) In addition the company

[R]equires suppliers to map and continu-

ously track and monitor all locations in

all levels of their supply chain and upon

request provide transparency information

Information is key to knowing whether subtier 1 suppliers are

conforming to a code of conduct This includes information regarding

which suppliers are part of a companyrsquos supply chain as well as information collected as part of a

supplier audit


bull Regular monitoring and reporting of supplier prog-

ress in improving performance (Nestle 2012a)

Nestlersquos Cocoa Plan includes traceability to

the farmer group level (Nestle 2013a) the com-

pany has similar traceability efforts underway or

in development for coffee dairy eggs fish and

seafood hazelnuts meat palm oil paper and

board poultry soya sugar and natural vanilla

(Nestle 2012a) Staples is also facing a daunting

challenge The company currently has approxi-

mately 125000 product SKUs (stock-keeping

units) and at some point in the future it may

have one million product SKUs Knowing all

of its subtier 1 suppliers is very challenging for

the company and it will likely become an even

greater challenge in the future (Buckley 2013)

Safety Security and Prohibited Materials and Activities

As safety security and other concerns in-

crease in certain sectors such as the chemical

food and information technology sectors and as

sector-based labor and safety issues grow there

will likely be increasing pressure for companies

to map out their supply chains and increase

traceability For certain sectors traceability is not

a new issue For example the Lacey Act of 1900

and later amended in 2008 prohibits companies

in the United States from trading in wildlife fish

and plants that have been illegally harvested and

sold This prohibition includes illegal logging

In addition the US Securities and Exchange Com-

mission (SEC) adopted a rule in 2012 that requires

companies to publicly disclose the use of conflict min-

erals which include tantalum tin gold and tungsten

that were extracted from the Democratic Republic of

the Congo or an adjacent country if the company

files reports to the SEC (SEC 2013)6 7 Companies can

extend such disclosure further For example Nestle

requires that its suppliers not harvest conflict wood or

other forest-based commodities (Nestle 2012b)

are becoming more diverse complex and dispersed

As discussed previously a companyrsquos supply chain

may represent a significant part of its environmental

footprint or product lifecycle impact and the supply

chain may include thousands of subtier 1 suppliers

For example in the case of Staples 93 of its

environmental impact takes place outside of its

operations including within its supply chain and

through customer use of its purchased products

In another example McDonaldrsquos purchases beef

from millions of farmers around the globe and

each area of the world handles traceability in a

different way This is one of the challenges of

agreeing to principles and criteria for sustainable

beef production (Starr 2013)

Nestle has developed a Responsible Sourcing

Traceability Programme as one of three levels

for its responsible sourcing5 The Programme

promotes compliance

by Nestlersquos ldquoextended

value chainsrdquo with

its Responsible Sourc-

ing Guidelines which

provide guidance to its

procurement staff and

consultants and are

shared with suppliers and stakeholders (Nestle

2013b) According to its Traceability Programme

in cases in which Nestle does not ldquopurchase direct

from the farm or feedstock [it has] a programme

to establish transparent supply chains back to the

origin and develop suppliers that meet its com-

mitments and policiesrdquo (Nestle 2012a p 119)

Nestlersquos Traceability Programme includes

bull Defining requirements based on its commit-

ments (eg no deforestation) and policies as

described in these sourcing guidelines

bull Transparency by mapping supply chains back

to their primary level of production

bull Transformation of suppliers through continu-

ous improvement and

To better understand these mapping challenges it is helpful to know that company supply chains are becoming more diverse complex and dispersed


performance and sustainability of supply chains

Although companies generally have more expe-

rience working with their tier 1 suppliers than

working with their subtier 1 suppliers their ef-

forts could cascade through their supply chains

and provide ideas and opportunities for their

tier 1 suppliers to influence the next tier of

supplier(s) Third-party organizations can play a

number of key roles some of which provide them

with opportunities to engage more directly with a

companyrsquos subtier 1 suppliers

Role of CompaniesFor certain sectors (eg apparel) producers

and their profit margins may become smaller

the further up a com-

panyrsquos supply chain

one travels (Kibbey amp

Young 2013) These

attributes may create

challenges for these

suppliers to consis-

tently meet their cus-

tomersrsquo sustainability expectations In addition a

company may be reluctant for competitive and

pricing reasons to terminate its contract with a

supplier if it is in noncompliance or nonconfor-

mance with the supplier code of conduct (Kibbey

amp Young 2013)

Increased expectations of suppliers may need

to be matched with increased technical assistance

and incentives In this regard a company can

play a key role in collecting and sharing lead-

ing practices among its suppliers For example

McDonaldrsquos invites its suppliers worldwide to

nominate their best practices A panel compris-

ing McDonaldrsquos representatives and an external

group of stakeholders including nongovern-

mental organizations (NGOs) review hundreds

of submissions and selects those that will be

highlighted as sustainable supply best practices

(McDonaldrsquos 2010)

There are other efforts to better understand and

improve supply chains For example the Tropi-

cal Forest Alliance (TFA) 2020 is a public-private

multicountry partnership that has set a goal of

reducing tropical deforestation by 2020 for four

agricultural commodities beef palm oil pulp and

paper and soy For the private sector this effort is

largely about companies working with their supply

chains One of the private sectorrsquos roles in the part-

nership is to ldquoWork with suppliers to develop tropi-

cal deforestation-free sources for the commodities

which they are purchasingrdquo (United States Agency

for International Development [USAID] nd p 1)8

According to Nestle

We recognise that to achieve rsquono defor-

estationrsquo we must work with all agents in

the supply chain from plantation owners

processors and suppliers all the way to the

consumer [In addition to] ensure the

palm oil we source is not associated with

deforestation we must know where it

comes from (Nestle 2012a p 127ndash128)

In addition GRIrsquos (2013) G4 sustainability

reporting guidelines ask organizations to describe

their supply chains As de Man and Ionescu-

Somers (2013) explain in a quote that leads us

into our next section

Sourcing from anonymous commodity

markets does not provide [a] company with

realistic possibilities to impact the farmersrsquo

practices owing to the lack of traceability

transparency A practical solution here

may be to require compliance with an ex-

ternally defined and independently certi-

fied sector sustainability standard (de Man

amp Ionescu-Somers 2013 p 32)

Improving Supplier PerformanceCompanies and third-party organizations

are working to improve the environmental

Companies and third-party organizations are working to

improve the environmental performance and sustainability of

supply chains


sustainability [Jordan 2013]) technical assis-

tance and training and paid-for consultation to

provide suppliers with training education or

continuous improvement programs required to

respond to audit findings (Nestle 2012a Patago-

nia 2013b) low-interest loans to support capital

projects (IKEA case studymdash[Pedersen amp Andersen

2006]) and the implicit knowledge that contracts

could be extended from other businesses of the

company (Von Haden 2013)

Role of Third-Party OrganizationsSupply chain issues can be bigger and more

formidable than an individual company might

wish to tackle on its own Third-party organiza-

tions have been playing a valuable role by bring-

ing companies together in noncompetitive ways

informing the marketplace and enabling the

development of learning- and sharing-networks

to deal with some of these issues In addition to

the actions that companies are taking to improve

the performance of their suppliers third-party

organizations also have a role to play to

bull Increase supply chain efficiencies

bull Expedite sharing of information on innova-

tive practices

bull Increase networking and learning

bull Certify supplier performance

bull Incentivize sustainable sourcing and

bull Convene forums to focus on key issues

Indeed companies often engage with third-

party organizations to assist them in advancing

sustainability strategies in mutually beneficial

ways (Kashmanian Wells amp Keenan 2011)

Exhibit 1 includes examples of a number of

third-party organizations that play key roles

in developing more sustainable supply chains

through the use of a variety of means including

bull Benchmarking supplier codes of conduct

across companies

Most leading companies would likely prefer

to work with their suppliers to address problems

rather than ldquowalk awayrdquo from them but this

is balanced by their need to minimize business

risk from noncompliant suppliers For example

although Mars will tell its suppliers that they

must meet its code of conduct the company

retains the right to terminate the relationship to

reduce its business risk However the company

believes that it is preferable not to terminate its

contract with the supplier and to instead empha-

size the use of positive incentives (Spitzley 2013)

In another case VF has a ldquothree strikesrdquo

phased policy whereby the supplier needs to

demonstrate improvement on poor audit find-

ings within 18 months If improvements are not

made VF will terminate the contract with the

supplier (Von Haden 2013)

Lack of commitment from a customer can

prove to be a major impediment for a supplier

that may want to improve its environmental per-

formance but does not

know whether doing

so will pay off in ad-

ditional orders Tesco

addresses this issue by

offering contracts for

durations of at least

two years to all of its

suppliers who want

them (Tesco 2013) A

supplier wants to make a return on its invest-

ment and it helps the supplier to do so if the cus-

tomer guarantees orders (Kibbey amp Young 2013)

Other incentives that a company could offer

to suppliers to support the adoption of more

sustainable practices include access to market

consistent demand receipt of consistent and

fair prices (Nestle 2012a) longer term contracts

reduction in audit frequency of the suppliers9

(eg Coca-Colarsquos Pass-It-Back program for sup-

pliers meeting a score and progressing with

Lack of commitment from a customer can prove to be a major impediment for a supplier that may want to improve its environmental performance but does not know whether doing so will pay off in additional orders


The supply chain ecosystem includes companies their supply chains and NGO or third-party or-

ganizations that work to

bull Harmonize practices within or across sectors

bull Increase efficiencies for suppliers andor companies

bull Share leading practices

bull Reduce burdens on suppliers and companies

bull Certify performance by suppliers and

bull Inform the marketplace

Below is a list of some of these NGOs and programs Some are environmental organizations and

some are industry organizations most of which were identified during the research performed dur-

ing the writing of this article As a result this list is not meant to be all-inclusive but to be illustrative

These summaries are obtained directly with some modification or editing from the organizationsrsquo

websites Visit their websites for additional information

AIM-PROGRESS (PROgram for RESponsible Sourcing) httpwwwaim-progresscom

AIM-PROGRESS is a global forum for consumer goods manufacturers and their common suppliers

to enable promote and advance responsible sourcing practices and sustainable production systems

AIM-PROGRESSrsquos key objectives include

bull Develop assess promote and share responsible supply chain sourcing practices

bull Develop and promote use of common evaluation methods to determine corporate social respon-

sibility (CSR) performance within supply chains

bull Create efficiencies by collecting assessing and sharing noncompetitive information on social

compliance performance of supply chains and

bull Reduce suppliersrsquo ldquoaudit fatiguerdquo by encouraging them to share audit reports with customers

through mutual recognition of their compliance assessments thereby avoiding duplicate au-

ditsmdashan audit for one is an audit for many

Mutual recognition is based on four criteria

bull Acceptable audit coverage (including environmental compliance)

bull Acceptable auditor

bull Acceptable process and

bull Audit integrity

Better Cotton Initiative (BCI) httpbettercottonorg

BCI works to reduce the environmental impact of cotton production through continuously

improving crop-growing and protection practices water use and soil fertility BCI also works to

improve labor issues as they relate to the cotton industry and the livelihoods of families and commu-

nities that depend on cotton production BCI has created a tracking system to follow Better Cotton

through the supply chain

Exhibit 1 Key Parts of the Supply Chain Ecosystem


Bonsucro httpwwwbonsucrocom

Bonsucro fosters the sustainability of the sugarcane sector through a metric-based certification

system and support for continuous improvement by its members Bonsucro works to define perfor-

mance-based principles criteria indicators and standards for sugarcane production that take into

account local conditions and circumstances and that are based on a credible and transparent process

focused on key sustainability drivers in sugarcane production Bonsucro has developed a certification

system that enables producers buyers and others involved in sugar and ethanol businesses to obtain

products derived from sugarcane that have been produced according to agreed credible transparent

and measurable criteria

BSR httpswwwbsrorg

BSR helps companies develop internal approaches engage with suppliers and build meaningful col-

laborations to improve the labor environmental and economic performances of their supply chains

BSR is also requested by its industry members to convene groups and focus on key issues This conven-

ing role led to the formation of the Center for Sustainable Procurement Mills and Sundries Working

Group and the Pharmaceutical Supply Chain Initiative In addition BSR works with companies to

bull Develop and review sustainable procurement strategies and policies

bull Identify opportunities to integrate sustainability into procurement and implement changes by

working with senior management and purchasing teams and

bull Design and execute supplier engagement and training programs

Carbon Disclosure Project (CDP) httpswwwcdprojectnet

CDP uses measurement and information disclosure to improve the management of environ-

mental risk CDP leverages market forces including shareholders customers and governments to

incentivize companies and cities to manage measure and report their environmental information

CDPrsquos supply chain program provides opportunities for companies to engage with their suppliers to

for example reduce risks due to greenhouse gas emissions and water use

Center for Sustainable Procurement (CSP) httpwwwbsrorgenour-workworking

-groupscenter-for-sustainable-procurement

CSP helps procurement professionals make informed purchasing decisions based on the best

available sustainability data and information CSP conducts research and works with companies to

integrate sustainability data into their product procurement processes

Consumer Goods Forum (CGF) httpwwwtheconsumergoodsforumcom

CGF brings together CEOs and senior management from major retailers consumer goods manu-

facturers service providers and other stakeholders across 70 countries CGF provides a global plat-

form for knowledge exchange and initiatives around five strategic priorities that are central to the

advancement of the consumer goods industry

bull Emerging trends

bull Sustainability

Exhibit 1 (Continued)


bull Safety and health

bull Operational excellence and

bull Knowledge sharing and people development

CGF members develop and lead the implementation of leading practices along their value chains

EcoVadis httpwwwecovadiscom

EcoVadis partners with procurement organizations to implement sustainable supply manage-

ment practices EcoVadis works to improve environmental and social practices of companies by

leveraging the influence of their global supply chains EcoVadis works to help procurement organi-

zations improve their performance and to reduce the costs associated with performance monitoring

of supplier CSR

Electronic Industry Citizenship Coalition (EICC) httpwwweiccinfo

EICC is a coalition of electronics companies working together to improve efficiency and social

ethical and environmental responsibility in their supply chains EICC developed a supplier code of

conduct in order to establish a common supplier code that provides guidelines for performance and

compliance with critical CSR policies EICC also provides tools and practices for companies to audit

compliance with the supplier code and helps companies report on their progress It established a

Validated Audit Process as a collaborative approach to auditing to the EICC supplier code of conduct

and as a means to share supplier audits with multiple customers thereby reducing audit fatigue and

duplication of effort

Fair Factories Clearinghouse (FFC) httpwwwfairfactoriesorg

FFC facilitates continuous improvement in social environmental and security standards and

the establishment of safe and humane working conditions for workers making consumer goods FFC

collects data from its members which it enters into a database and shares with its participants to in-

crease their compliance capability This Information Clearinghouse improves accessibility availabil-

ity transparency comprehensiveness and standardization of information among its participants in

accordance with antitrust rules regarding factory workplace conditions

Sharing this information and expertise advances knowledge about workplace conditions and

the steps companies are taking to address them and therefore advances global efforts to improve

factory conditions Industry-wide collaboration becomes more commonplace and results in greater

efficiency and cost savings risk mitigation and assurance in factory monitoring for all participants

Forest Stewardship Council (FSC) httpsicfscorg

FSC promotes responsible forest management by enabling businesses and consumers to make

informed choices about the forest products that they buy FSC works with stakeholders to define best

forestry practices that address social environmental and economic issues

Global Apparel Footwear and Textile Initiative (GAFTI) httpwwwgaftiorg

GAFTI brings retailers consumer brand manufacturers mills and factories together to improve

efficiencies and set uniform global standards Its goal is to reduce complexity remove costs from

common industry practices and improve performance



Global Forest amp Trade Network (GFTN) httpgftnpandaorgabout_gftn

The World Wildlife Fundrsquos (WWFrsquos) GFTN is driven to eliminate illegal logging and increase

responsible forest management and trade to save the worldrsquos valuable and threatened forests GFTN

works with companies to assess the risks in their forest industry supply chain provide training and

technical support share best practices achieve responsible wood sourcing and credible chain-of-

custody certification and facilitate trade between companies supporting responsible forestry

Global Roundtable for Sustainable Beef (GRSB) httpgrsbeeforg

GRSB works within the beef industry and with environmental groups retailers and others to

continuously improve sustainability in the global beef value chain These organizations share their

knowledge of leadership and science and collectively engage and collaborate GRSBrsquos efforts include

identifying evaluating and enabling increased adoption of leading production and supply chain

practices and technologies

Global Social Compliance Programme (GSCP) httpwwwgscpnetcom

GSCP was created by and for global companies that want to work collaboratively and improve

the sustainability (laborsocial and environmental) of their often-shared supply base Using consen-

sus and best practices GSCP focuses on

bull Developing consistent supplier codes of conduct

bull Creating a uniform and clear message to suppliers

bull Reducing supplier audit duplication

bull Providing mutual recognition of supplier codes and audit monitoring

bull Simplifying buying and

bull Identifying causes of noncompliance and opportunities for continuous improvement of working

and environmental conditions in supply chains

As part of these activities GSCP developed an environmental framework and scoring methodol-

ogy to assess factory environmental performance across supply chains with regard to reducing each of

its environmental impact areas Factories can achieve GSCP Level 1mdashldquoCompliance and Awarenessrdquo

Level 2mdashldquoProactive Management and Performance Improvementrdquo or Level 3mdashldquoLeading Practicerdquo

Green Chemistry amp Commerce Council (GC3) httpwwwgreenchemistryandcommerceorg

GC3 advances the application of green chemistry green engineering and design for the envi-

ronment by sharing case study information and experiences across supply chains and across sectors

encouraging dialogue to overcome barriers and helping to increase consumer demand

International Trade Centre (ITC) Standards Map httpwwwstandardsmaporg

The ITCrsquos Standards Map provides users with information enabling them to analyze and compare

information on 120 voluntary standards eco-labels supplier codes of conduct and audit protocols

operating in more than 200 countries and certifying products and services in more than 80 eco-

nomic sectors including agriculture forestry fisheries mining textiles and manufactured products

This evaluation can help companies identify prospects for adopting private standards and assess

costs and benefits for developing or expanding related product or market opportunities



Marine Stewardship Council (MSC) httpwwwmscorg

MSC works with retailers brands seafood businesses and consumers to promote sustainable

fishing practices and increase availability and purchase of certified sustainable seafood to incentiv-

ize other fisheries to improve their practices MSC develops standards for sustainable fishing and

seafood traceability based on best practices

Outdoor Industry Association Sustainability Working Group (OIA SWG) httpwww

outdoorindustryorg

OIA SWG explores issues of corporate environmental and social responsibility in the outdoor

industry The SWG works on the most pressing supply chain challenges that large and small outdoor

industry companies face and that are key to their business survival One of the outdoor industryrsquos

most notable accomplishments is the development of the OIA Eco Index a product sustainability

indexing tool that can chart a companyrsquos progress toward sustainability OIA SWG is currently focus-

ing on four key work areas

bull Index developmentmdashbuilding sustainability indexes for outdoor apparel footwear and equipment

bull Responsible chemicals management

bull Materials traceability in the supply chain and

bull Social responsibility and fair labor

Pharmaceutical Supply Chain Initiative (PSCI) httpwwwpharmaceuticalsupplychainorg

PSCI is a group of major pharmaceutical companies that share a vision of better social economic

and environmental outcomes for those involved in the pharmaceutical supply chain PSCI created

the Pharmaceutical Industry Principles for Responsible Supply Chain Management to address key

areas of responsible business practices and to support suppliers operating in a manner consistent with

industry expectations in ethics labor health and safety environment and management systems

Programme for the Endorsement of Forest Certification (PEFC) httpwwwpefcorg

PEFC is a forest certification system developed to transform how forests are managed and to

consider their environmental social and economic benefits PEFC is also an umbrella organization

that endorses national forest certification systems developed through multistakeholder processes

and that focuses on local priorities and conditions

Rainforest Alliance httpwwwrainforest-allianceorg

The Rainforest Alliance works to conserve biodiversity protect rainforests and ensure sustain-

able livelihoods by transforming land-use practices business practices and consumer behavior and

ensuring profitability to businesses and communities The Rainforest Alliance developed the Smart-

Wood program in 1989 and is a cofounder and certifier for FSC (see above) In addition the Rainfor-

est Alliancersquos SmartSource Sustainable Sourcing Program helps businesses

bull Analyze their supply chains

bull Improve understanding of their sourcing risks



bull Determine whether responsible sourcing practices have been used

bull Improve forest product purchasing practices

bull Establish legal traceable and sustainable supply chains and

bull Develop solutions to address challenges

The Rainforest Alliance also helps farmers forest managers and tourism businesses receive

greater economic benefits by ensuring that ecosystems within and around their operations are

protected Once businesses meet certain environmental and social standards the Rainforest Al-

liance works to help them receive marketplace support and increased demand for their goods or

services

Round Table on Responsible Soy Association (RTRS) httpwwwresponsiblesoyorg

RTRS is a multistakeholder initiative that has developed a standard for responsible soy pro-

duction The standard includes five principles (including environmental responsibility and good

agricultural practices) 27 criteria and 98 indicators

Roundtable on Sustainable Palm Oil (RSPO) httpwwwrspoorg

RSPO works to transform markets such that sustainable palm oil becomes the norm by

bull Advancing production procurement finance and use of sustainable palm oil products

bull Developing implementing verifying assuring and reviewing global standards for the supply

chain of sustainable palm oil

bull Monitoring and evaluating economic environmental and social impacts from increasing market

availability of sustainable palm oil and

bull Engaging and committing stakeholders throughout the palm oil supply chain including govern-

ments and consumers

RSPO has endorsed GreenPalm (httpwwwgreenpalmorg) to manage the sustainable palm oil

certificate trading program

Supplier Ethical Data Exchange (Sedex) httpwwwsedexglobalcom

Sedex works to help companies reduce risk protect their reputation and improve global supply

chain practices Sedex offers an online database to help company members manage ethical and re-

sponsible practices in company supply chains by sharing supplier audit reports to reduce the burden

on suppliers facing multiple audits questionnaires and certifications and driving improvements in

the ethical performance of global supply chains

Sustainable Apparel Coalition (SAC) httpwwwapparelcoalitionorg

SAC is an industry-wide organization of apparel and footwear brands retailers and suppliers as

well as nonprofits and NGOs working to reduce the environmental and social impacts of apparel

and footwear products Through a multistakeholder process SAC works toward a shared industry

vision of sustainability that is built upon an approach to measure and evaluate apparel and footwear

product sustainability performance



Sustainable Fisheries Partnership (SFP) httpwwwsustainablefishorg

SFP is a business-focused NGO that has created a database of fisheries accessible to all which

contains assessments of sustainability and improvement needs These information tools allow

companies and their procurement officials to directly engage with their fishery supply chains and

implement sustainability policies SFP does not campaign or provide eco-labels but works to reduce

the barriers to action by industry by providing access to reliable and detailed information related to

improving fishery practices and creating more sustainable fisheries and developing fishery improve-

ment projects with multiple local stakeholders

Sustainable Forestry Initiative (SFI) httpwwwsfiprogramorg

SFI focuses on responsible forest management and fiber sourcing requirements and considers

environmental social and economic concerns SFIrsquos chain-of-custody certification tracks the per-

centage of fiber from SFI-certified forests

The Common Code of the Coffee Community (4C) httpwww4c-coffeeassociationorg

The 4C Association includes coffee farmers traders industry players and civil society working

together to increase sustainability in the coffee sector The association developed the 4C Code

of Conduct which includes social environmental and economic principles related to increas-

ing sustainability of production processing and trading of green coffee To illustrate continuous

improvement the 4C Code of Conduct includes a ldquotraffic light systemrdquo marked by red yellow

and green colors to identify practices that need to be discontinued improved or continued

respectively

The Forest Trust (TFT) httpwwwtft-forestsorg

TFT works with companies and communities to provide solutions to deforestation create

ldquoresponsible supply chainsrdquo and deliver ldquoresponsible productsrdquo Its supply chain model provides

technical support to the extraction and production stages and communication support to the distri-

bution and consumption stages however its main focus is on the extraction stage where environ-

mental impacts during the product life cycle may be at their greatest TFT also focuses on traceability

systems although it originally focused on wood it has expanded its focus to also include leather and

shoe cotton palm oil and paper

The Leather Working Group (LWG) httpwwwleatherworkinggroupcom

LWG works to develop and maintain a protocol that assesses the compliance and environmental

performance of tanners and promotes sustainable and appropriate environmental practices within

the leather industry LWG also works to align sector environmental priorities identify and share

leading practices and provide guidelines for continual improvement

The Sustainability Consortiumreg (TSCreg) httpwwwsustainabilityconsortiumorg

TSCreg is an organization that works collaboratively with stakeholders to build a scientific basis

for driving innovation to improve consumer product sustainability These innovations are focused

on the development of methodologies tools and strategies to create products and supply networks

that address environmental social and economic needs



bull Developing sector-based or comparable com-

mon supplier codes of conduct andor other

sustainability initiatives

bull Conducting supplier audits or assessments

bull Providing mutual recognition of participating

company supplier codes of conduct and sup-

plier audit or assessment reports

bull Sharing supplier audit or monitoring reports

and supplier assessments with companies that

have contracts with common suppliers to re-

duce audit fatigue

Tropical Forest Alliance 2020 (TFA 2020) httpwwwtfa2020com

TFA 2020 is a publicndashprivate partnership with the goal of reducing (and eventually eliminating)

tropical deforestation by 2020 for beef palm oil pulp and paper and soy production The private sector

is represented by the Consumer Goods Forum The governments of the United States the Netherlands

Norway and the United Kingdom are also members of the partnership as are the following NGOs

bull Carbon Disclosure Project

bull Conservation International

bull Forest Trends

bull National Wildlife Federation

bull Rainforest Alliance

bull SNV (httpwwwsnvworldorg)

bull Solidaridad Network

bull Sustainable Trade Initiative

bull The Nature Conservancy

bull Wildlife Conservation Society

bull World Resources Institute and

bull World Wildlife Fund

TFA 2020 partners will work together to accomplish the following

bull Improve planning and management related to tropical forest conservation agricultural land use

and land tenure

bull Share best practices for tropical forest and ecosystem conservation and commodity production

including working with smallholder farmers and other producers on sustainable agricultural in-

tensification promoting the use of degraded lands and reforestation

bull Provide expertise and knowledge in order to assist with the development of commodity and

processed commodity markets that promote the conservation of tropical forests and

bull Improve monitoring of tropical deforestation and forest degradation to measure progress


bull Mapping out supply chains and increasing

traceability of supplies

bull Measuring supplier sustainability perfor-

mance and

bull Certifying supplier performance or products

To understand how its suppliers are perform-

ing a company may audit or monitor them or

work with a third-party organization to do so

Companies can also encourage their suppliers to

be certified by a third-party organization have


bull 30 by 2012 (note the company achieved

36 by the end of 2012) and

bull 50 by 2015 (Unilever 2013b)

IKEA has a sustainability product scorecard

and a goal that by fiscal year 2017 the majority

of its renewable materials such as cotton and

wood will come from preferred andor certified

sources (IKEA 2010) The company also has a

goal to reduce carbon emissions by 20 by 2015

and a 2020 goal for its suppliers to increase en-

ergy efficiency by 20 (IKEA 2013) McDonaldrsquos

uses its Environmental Scorecard to encourage

suppliers to measure and reduce energy waste

and water normalized

to production and to

submit these data into

a software database

system (McDonaldrsquos

2013a) Gap is partner-

ing with ZDHC (Zero

Discharge of Hazard-

ous Chemicals) on its

goal of zero discharge

of hazardous chemicals

in its supply chain by

2020 (Gap Inc 2014a)

HP has set a goal for its

tier 1 manufacturing suppliers and product trans-

portation providers to reduce their greenhouse

gas intensity by 20 by 2020 compared with

2010 figures (HP 2013a)

The SAC developed a tool for understanding

and measuring the environmental and social per-

formance of apparel and footwear products called

the Higg index Although the current version of

the index primarily evaluates performance using

qualitative indicators SACrsquos goal is to develop ad-

ditional quantitative indicators (eg actual energy

use) Apparel and footwear companies can use the

Higg index as a standard for comparison rather

than create separate scorecards Other sectors can

their suppliers evaluated based on a sustainability

performance scorecard report their sustainability

progress publicly etc

Audits are typically focused on conformance

to a supplier code of conduct whereas a scorecard

can be used to measure and track supplier sustain-

ability performance over time A certifying organi-

zation benchmarks and certifies the supplier or its

product with respect to a standard Alternatively

a company could encourage its suppliers to pub-

licly report progress toward a publicly stated goal

(eg reducing and reporting greenhouse gas re-

leases to the Carbon Disclosure Project) PepsiCo

(PepsiCo 2013) Unilever (Unilever 2013a) and

Walmart (Cremmins 2013) are but a few of the

companies that embrace this approach

Examples of Companies Using Supplier Audits Scorecards and Certification Programs

A companyrsquos choice between relying on a sup-

plier sustainability performance scorecard or prod-

uct supply certification (in some cases companies

rely on both) may be based on which metrics mat-

ter most to the company or which metrics it will

use to portray and measure its sustainability In

addition the company may consider to what ex-

tent it should incorporate supply chain improve-

ments or certifications into its corporate goals

As an example to meet its commitment to buy

only responsibly sourced wood more than 90

of BampQrsquos products containing wood or paper are

produced from chain-of-custody certified sources

(BampQ 2013a 2013b 2013c) Coca-Colarsquos 2020

goals include sustainably sourcing key agricultural

ingredients such as cane sugar beet sugar corn

tea coffee palm oil soy pulp and paper fiber and

oranges (Coca-Cola 2013a Moye 2013)

Unilever also has a goal to sustainably source

100 of its agricultural raw materials by 2020

and has set interim milestones

bull 10 by 2010

The Sustainable Apparel Coalition (SAC) developed a tool for

understanding and measuring the environmental and social

performance of apparel and footwear products called the Higg

index Although the current version of the index primarily evaluates

performance using qualitative indicators SACrsquos goal is to develop

additional quantitative indicators


LWG program have a clear understanding

of where their raw material is originat-

ing from With this information and in

co-operation with NGOs the LWG aims

to reduce the impact cattle ranching has

on deforestation in Brazil and potentially

in other areas of the world if necessary

(LWG 2010 para 1ndash2)

In addition The Leather Working Grouprsquos

Auditing Protocol recognizes the need to

Have visibility through the supply chain

of their raw material Those sourcing

material in Brazil will need to demonstrate

traceability to the slaughterhouse

Suppliers sourcing from Brazil will need to

ensure [that] [t]he farms [were not] in-

volved in any form of deforestation in the

Amazon biome since October 05 2009

(LWG 2012 p 6)

Third-party organizations can provide an-

other valuable role in certifying the perfor-

mance of suppliers McDonaldrsquos has set (and

has met) a goal that requires all of its palm oil

suppliers to become members of the Roundtable

on Sustainable Palm Oil (McDonaldrsquos 2013c)

In addition Mars has made the following

statement

Mars has pledged to certify 100 of its

cocoa as sustainably produced by 2020

Because we canrsquot have a direct relation-

ship with every farmer we use certification

to implement change on a larger scale than

we could achieve on our own Certification

creates a set of standards against which

cocoa farming can be measured and enables

us to verify through a third party organiza-

tion that those standards are being met

This means we know that the cocoa we use

also use this index The use of common scorecards

provides a common means to communicate with

stakeholders regarding sustainability (SAC 2012)

Mapping and Materials Traceability with Third-Party Organizations

As discussed previously it can be important

for a company to better understand its supply

chains including where and how its supplies are

being sourced To aid in mapping its supply chain

Staples works with the Rainforest Alliance and its

SmartSource 360 tool to trace its paper supply and

better understand where it is coming from (eg

tiers 2 3 and 4 Buckley 2013 Rainforest Alli-

ance 2013) McDonaldrsquos has a policy that states

that no beef raw material will be sourced from the

Amazon biome (McDonaldrsquos 2013b)

If a product is certified it becomes easier to trace

According to the LWG

U n d e r s t a n d i n g

where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified

by Greenpeace and other NGOs as a major

problem in Brazil

As a result of this situation the LWG

has introduced an assessment of traceabil-

ity into the environmental stewardship

audit process This will ultimately ensure

that the leather manufacturers within the

Questions that a company may face when considering whether to encourage its suppliers to be certified include whether it is sufficient for suppliers to perform as if they meet a certification standard but not go through actual certification or whether it is more important that suppliers actually be certifiedmdashand for this to be communicated to consumers and other stakeholders


the standard and marketplace acceptance and

support for the certification) (de Man amp Ionescu-

Somers 2013)

ConclusionThe supplier code of conduct focuses on com-

pliance and as such it is an important tool in

the toolbox for building greater sustainability in

supply chains Companies should make clear to

which parts of their supply chains (eg tier 1 sup-

pliers tier 1 and subtier 1 suppliers) its supplier

code of conduct applies It is also important that

a company clearly communicates its expectations

for each tier of its chain how it will support sup-

plier conformance with the code of conduct and

the possible consequences of nonconformance

This can increase the effectiveness of the sup-

plier code of conduct Other tools such as those

discussed in this paper can help support suppli-

ers in their efforts to

continuously improve

along their sustain-

ability paths as well

Company supply

chains are expected to

grow andor expand

over the foreseeable

future As companies

focus more on the

sustainability of their

supply chains and

are asked to assume

greater accountability

for their suppliers it is

expected that manag-

ers will devote greater attention to mapping out at

least key segments of their supply chains monitor-

ing and assessing the performances of their suppli-

ers and improving the traceability of the materials

through their supply chains

There are numerous steps along a companyrsquos

sustainability path There are also numerous steps

is produced in a way that is good for farmers

and good for the environment (Mars 2012

para 1ndash2)

Further according to de Man and Ionescu-

Somers (2013)

The more the raw material has a rsquocom-

modityrsquo character the more uniform the

raw material is and the less direct influ-

ence the company has on farmers In such

rsquocommodityrsquo supply chains it may make

sense to rely on external standards and

the related certification systems In supply

chains where a company is sourcing di-

rectly and as a result has more direct con-

tact with suppliers and farmers it may be

less obvious to rely on external standards

and systems (de Man amp Ionescu-Somers

2013 p 23)

Considering the Costs and Benefits of Certification

Cost versus benefit is one factor a company

may consider when determining whether cer-

tification affects the price paid to the supplier

andor the price paid by the end consumer

Questions that a company may face when con-

sidering whether to encourage its suppliers to

be certified include whether it is sufficient for

suppliers to perform as if they meet a certifica-

tion standard but not go through actual certi-

fication or whether it is more important that

suppliers actually be certifiedmdashand for this to be

communicated to consumers and other stake-

holders Other important questions a company

needs to consider include who should pay the

certification fee and the marketplace value that

the company will derive from having its sup-

pliers certified (based onmdashfor examplemdashrobust-

ness of the criteria method of verification to

As companies focus more on the sustainability of their supply chains

and are asked to assume greater accountability for their suppliers it is expected that managers will

devote greater attention to mapping out at least key segments of their

supply chains monitoring and assessing the performances of

their suppliers and improving the traceability of the materials through

their supply chains


not imply endorsement of use or verification

testing of the company organization or product

claims nor the companyrsquos overall practices or past

compliance history by the US Environmental

Protection Agency Any views expressed represent

the authorsrsquo assessments and do not necessarily

reflect those of the Agency or the Administration

Notes1 Following lack of financial resources (51) competing strategic priorities (44) and no clear link to business value (37) extending strategy throughout the supply chain was identified by 33 of respondents (respondents could identify up to three choices)

2 The stages identified by BSR are (1) Setting expectations (2) Monitoring and evaluation (3) Remediation and capabil-ity building and (4) Partnership Coca-Cola has a five-tier supplier engagement model which assumes compliance with its supplier guiding principles (1) Dialogue on sustainability opportunities (2) Supplier operational improvements (3) B2B supply chain efficiencies (4) Accelerating signature programs and (5) Emerging opportunitiesinnovations (Jordan 2011)

3 EICC members include Advanced Micro Devices Apple Best Buy Blackberry Cisco Dell EMC Hewlett-Packard IBM Intel LG Microsoft Motorola Philips Oracle Samsung Sony Texas Instruments Toshiba and Xerox

4 Patagonia (2013b) conducts environmental and social audits either itself through a third-party organization or in collaboration with another company or receives audit reports of its suppliers from an organization like Fair Factories Clearinghouse

5 The other two Responsible Sourcing Programmes include its Audit Programme of its tier 1 suppliers and its Farmer Con-nect Programme (Nestle 2012a)

6 In light of the US Court of Appeals ruling on April 14 2014 the SEC staff issued guidance stating that during the pendency of the litigation companies would not be required to identify their products as ldquonot been found to be lsquoDRC conflict freersquordquo in their conflict minerals report See SEC statement from April 29 2014 which is available at httpwwwsecgovNews PublicStmtDetailPublicStmt1370541681994U4NHTsbmZX0

7 Intelrsquos White Paper on a ldquoConflict-Freerdquo supply chain de-scribes its effort to achieve a conflict-free supply chain includ-ing its goals to manufacture a microprocessor that is conflict-free for these four metals by the end of 2013 (Intel 2013)

8 US Agency for International Development (AID) nd p 1 The private sector is represented by the Consumer Goods Forum whose members include Ahold Campbellrsquos Carrefour Coca-Cola Colgate Danone General Mills IBM Johnson amp Johnson Kelloggrsquos Kimberly-Clark Kroger Nestle Nike Oracle PepsiCo Procter amp Gamble SC Johnson Tesco Unilever Walgreens Walmart and Wegmans

9 Audits are typically paid for in part or in total and there-fore owned by the supplier and are therefore an expense for it

along a companyrsquos path to build greater sustain-

ability in its supply chain but it is important for

a company to get started If a company chooses

to move along its own sustainability path and

engage more closely with its supply chain it will

find opportunities to learn and adjust its efforts

and it will likely advance forward in a stepwise

manner The company will be able to partner

with others (including third-party organizations

and perhaps other companies) to help it share

leading practices increase efficiency and ad-

vance along its sustainability path

Acknowledgments and DisclaimerThe authors would like to thank the company

and organization representatives who agreed to

be interviewed shared their valuable time and

provided important perspectives and insights In

addition the authors would also like to thank the

following individuals for their review and helpful

comments on an earlier draft of this article Mark

Buckley Staples Andrew Hutson Environmental

Defense Fund Mitch Kidwell US EPA Jason Kib-

bey SAC Ben Jordan Coca-Cola Terry Lee Grad-

uate of Columbia School of International and

Public Affairs Harry Lewis US EPA Tara Norton

BSR Katrin Recke AIM-PROGRESS David Spitzley

Mars Inc Rona Starr McDonaldrsquos Colleen Von

Haden TimberlandVF and Ryan Young SAC

The companies and organizations mentioned

in this article do not constitute an all-inclusive

list of companies using supplier codes of conduct

or supplier sustainability performance scorecards

or those that engage with subtier 1 suppliers or

third-party organizations involved with supply

chain engagement or product certification related

to sustainability The purpose of this article is to

share information about these supplier codes of

conduct performance scorecards supply chain

engagement and certifications and to provide ex-

amples of what is in play The mention of a com-

pany organization certification or product does


Retrieved from httpwwweiccinfodocumentsEICCCodeof ConductEnglishpdf

Gap Inc (2014a) Goals Retrieved from httpwwwgapinc comcontentcsrhtmlenvironmentgoalshtml

Gap Inc (2014b) Operating context and strategy Retrieved from httpwwwgapinccomcontentcsrhtmlenvironment html

Global Reporting Initiative (GRI) (2013) G4 sustainability reporting guidelines Reporting principles and standards disclosures Retrieved from httpswwwglobalreportingorg resourcelibraryGRIG4-Part1-Reporting-Principles-and -Standard-Disclosurespdf

Hayward R Lee J Keeble J McNamara R Hall C amp Cruse S (2013) The UN Global Compact-Accenture CEO Study on Sustainability 2013 Architects of a better world Retrieved from httpwwwaccenturecomMicrositesungc-ceo-study Documentspdf13-1739_UNGC20report_Final_FSC3pdf

HP (2013a) HP announces supply chain greenhouse gas (GHG) emissions reduction goal Retrieved from httpwww8 hpcomusenhp-newspress-releasehtmlid=1489007 UtAqSP17km0

HP (2013b) HP suppliers Retrieved from httph20195 www2hpcomV2GetPDFaspxc03728062pdf

Hutson A (2013 June 25) Interview of director global value chain initiatives Environmental Defense Fund (EDF)

IKEA (2010) Sustainability report 2010 Retrieved from httpwwwikeacommsen_USabout_ikeapdfikea _ser_2010pdf

IKEA (2013) People amp planet positive IKEA group sustainabil-ity strategy for 2020 Retrieved from httpwwwikeacommsen_USpdfreports-downloadspeopleandplanetpositivepdf

Intel (2013) Intelrsquos efforts to achieve a ldquoConflict-Freerdquo supply chain Retrieved from httpwwwintelcomcontentdamdocpolicypolicy-conflict-mineralspdf

Jordan B (2011) Supplier engagement pyramid Inside Supply Management 22(3) 36ndash37

Jordan B (2013 July 8) Interview of director of supplier sustainability Coca-Cola

Kashmanian R Wells R amp Keenan C (2011) Corporate environmental sustainability strategy Key elements Journal of Corporate Citizenship 44 107ndash130

Keller H (2008) Codes of conduct and their implementation The question of legitimacy Erasmus University Rotterdam Retrieved from httpwwwyaleedumacmillanHeken _Keller_Paperpdf

Kibbey J amp Young R (2013 June 27) Interview of executive director and index manager Sustainable Apparel Coalition (SAC)

Kiron D Kruschwitz N Haanaes K Reeves M amp Goh E (2013 Winter) The innovation bottom line MIT Sloan Man-agement Review 54(2) 1ndash20

Kolk A amp van Tulder R (2002) International codes of conduct trends sectors issues and effectiveness Erasmus University Rotterdam Retrieved from httpwwwib-smorginternationalcodesconductpdf

ReferencesAccenture (2013) Reducing risk and driving business value CDP supply chain report 2012ndash2013 Retrieved from httpswwwcdprojectnetCDPResultsCDP-Supply-Chain -Report-2013pdf

BampQ (2013a) Forest friendly Retrieved from httpwwwdiy comdiyjspbqtemplatescontent_lookupjspcontent=contentmarketingone_planet_homeforest_friendlyindex jspampmenu=eco and httpwwwdiycomcontentmarketing one_planet_homeforest_friendlyjspmenu=eco

BampQ (2013b) Read our FAQs Retrieved from httpwwwdiy comdiyjspcorporatecontentfaqsenvironmentjsp

BampQ (2013c) Verification schemes Retrieved from httpwwwdiycomcontentmarketingone_planet_home verification_schemesjspmenu=eco

Baxter (2011) Supplier quality standard Retrieved from httpwwwbaxtercomdownloadspartners_and_suppliers suppliersSupplier_Quality_Standardpdf

Baxter (2013a) Supply chain Retrieved from httpwww sustainabilitybaxtercomsupply-chainindexhtml

Baxter (2013b) Sustainable procurement Retrieved from httpsustainabilitybaxtercomsupply-chainsustainable -procurementhtml

BSR and United Nations (UN) Global Compact (2010) Sup-ply chain sustainability A practical guide for continuous improvement Retrieved from httpwwwunglobalcompact orgdocsissues_docsupply_chainSupplyChainRep_spread pdf

Buckley M (2013 July 16) Interview of vice president for environmental affairs Staples

Coca-Cola (2011) Towards sustainable sugar sourcing in Europe water footprint sustainability assessment (WFSA) Retrieved from httpwwwwaterfootprintorgReports CocaCola-2011-WaterFootprintSustainabilityAssessmentpdf

Coca-Cola (2013a) Our 2020 environmental goals Retrieved from httpwwwcoca-colacompanycomstoriesour-2020 -environment-goals-infographic

Coca-Cola (2013b) Sustainable agricultural guiding principles and criteria The Coca-Cola company Retrieved from http assetscoca-colacompanycombb280d592b834e9d8fd9afcccb1829b6sustainable-agricultural-guiding-principlespdf

Cremmins B (2013) CDP and Walmart A partnership to reduce suppliersrsquo greenhouse gas emissions Retrieved from httpwwwwalmartgreenroomcom201302cdp-and -walmart-a-partnership-to-reduce-suppliers-greenhouse-gas -emissions

Deloitte (2010) Sustainability in business today A cross- industry view Retrieved from httpwwwdeloittecom assetsDcom-UnitedStatesLocal20AssetsDocuments IMOsCorporate20Responsibility20and20Sustainability us_es_sustainability_exec_survey_060110pdf

de Man R amp Ionescu-Somers A (2013) Sustainable sourcing of agricultural raw materials A practitionerrsquos guide Retrieved from httpwwwbsrorgfilesfbasustainable-sourcing-guidepdf

Electronic Industry Citizenship Coalitionreg (EICC) (2012) Electronic Industry Citizenship Coalitionreg code of conduct


Nestle (2013a) Cocoa Retrieved from httpwwwnestle comcsvresponsible-sourcingcocoa

Nestle (2013b) Nestle responsible sourcing guideline Retrieved from httpwwwnestlecomasset-librarydocuments librarydocumentscorporate_social_responsibilitynestle -responsible-sourcing-guidelinespdf

Nestle (2013c) Responsible sourcing Retrieved from httpwwwnestlecomcsvresponsible-sourcing

Nestle (2013d) Water in our supply chain Retrieved from httpwwwnestlecomcsvwatersupply-chain

Norton T (2013 July 23) Interview of director of advisory services BSR

Patagonia (nd) Supplier workplace code of conduct Retrieved from httpwwwpatagoniacompdfen_US Patagonia_COC_English_02_13pdf

Patagonia (2013a) The footprint chronicles our supply chain Retrieved from httpwwwpatagoniacomusfootprint

Patagonia (2013b) Working with factories Retrieved from httpwwwpatagoniacomuspatagoniagoassetid=67583

Pedersen E amp Andersen M (2006) Safeguarding corporate social responsibility (CSR) in global supply chains How codes of conduct are managed in buyer-supplier relationships Journal of Public Affairs 6 228ndash240

PepsiCo (2013) Responsible amp sustainable sourcing Retrieved from httpwwwpepsicocomPurposeEnvironmental -SustainabilityResponsible-Sourcing

Rainforest Alliance (2013) Sustainable sourcing Retrieved from httpwwwrainforest-allianceorgforestrysourcingsustainable

Recke K (2013 July 2) Interview of senior sustainability and supply chain manager AIM-PROGRESS

Spitzley D (2013) Interview of responsible sourcing man-ager Mars Inc

Staples (2011) Supplier code of conduct Retrieved from httpswwwstaplescomsbdcremarketingstaples_souldocumentsstaples-supplier-code-of-conductpdf

Starr R (2013 July 1) Interview of director supplier work-place accountability McDonaldrsquos

Sustainable Apparel Coalition (SAC) (2012) The Higg index Retrieved from httpwwwapparelcoalitionorghiggindex

Tesco (2013) Tesco and society report What matters now Using our scale for good Retrieved from httpwwwtescoplc comfilespdfreportstesco_and_society_2013_ipadpdf

The Economist Intelligence Unit (2008) Doing good Business and the sustainability challenge The Economist Retrieved from httpgraphicseiucomuploadSustainability_allsponsors pdf

The Economist Intelligence Unit (2010) Managing for sus-tainability The Economist Retrieved from httpgraphics eiucomuploadebEnel_Managing_for_sustainability_WEB pdf

Timberland (2013) Cutting emissions in our value chain Retrieved from httpresponsibilitytimberlandcomclimatesupply-chain

UL (2013) The Product Mindset 2013 Retrieved from httpproductmindsetulcom

Lacy P Cooper T Hayward R amp Neuberger L (2010) A new era of sustainability UN Global Compact-Accenture CEO Study Retrieved from httpwwwunglobalcompactorgdocsnews_events81UNGC_Accenture_CEO_Study_2010pdf

Leather Working Group (LWG) (2010) LWG on hide trace-ability Retrieved from httpwwwleatherworkinggroup comabouthide-traceabilityhtm

Leather Working Group (LWG) (2012) Tannery environ-mental auditing protocol Audit questionnaire Retrieved from httpwwwleatherworkinggroupcomimagesdocumentsProtocol2052320(2020January202012)20English pdf

Lee T amp Kashmanian R (2013) Supply chain sustainability Compliance- and performance-based tools Environmental Quality Management 22(4) 1ndash23

Mars (2012) Securing cocoarsquos future Certification Retrieved from httpwwwmarscomglobalbrandscocoa-sustainability cocoa-sustainability-approachcertificationaspx

McDonaldrsquos (2010) McDonaldrsquos best practices Sustainable sup-ply vision Retrieved from httpbestpracticesmcdonaldscom sections2-best-of-sustainable-supply

McDonaldrsquos (2012) McDonaldrsquosreg Supplier code of conduct Retrieved from httpwwwaboutmcdonaldscomcontentdamAboutMcDonaldsSustainabilityLibrarySupplier_Code _of_Conductpdf

McDonaldrsquos (2013a) Environmental scorecard Retrieved from httpwwwaboutmcdonaldscommcdsustainability librarypolicies_programssustainable_supply_chain Environmental_Scorecardhtml

McDonaldrsquos (2013b) Sustainable land management com-mitment Retrieved from httpwwwaboutmcdonaldscommcdsustainabilitysignature_programssustainable_land _management_commitmenthtml

McDonaldrsquos (2013c) Sustainable supply chain Retrieved from httpwwwaboutmcdonaldscommcdsustainabilityour_focus_areassustainable_supply_chainhtml

McKinsey amp Company (2011) The business of sustainability McKinsey Global Survey results Retrieved from httpwww mckinseycominsightsenergy_resources_materialsthe _business_of_sustainability_mckinsey_global_survey_results

Moye J (2013) Beyond water Coca-Cola expands partner-ship with WWF announces ambitious environmental goals Retrieved from httpwwwcoca-colacompanycomstories beyond-water-coca-cola-expands-partnership-with-wwf -announces-ambitious-environmental-goals

Nestle (2010) The Nestle supplier code Retrieved from httpwwwnestlenlasset-librarydocumentsthe20nestleacute20supplier20codepdf

Nestle (2012a) Nestle in society Creating shared value and meeting our commitments 2012 Retrieved from httpwwwnestlecomasset-librarydocumentslibrarydocuments corporate_social_responsibilitynestle-csv-full-report -2012-enpdf

Nestle (2012b) Responsible sourcing guidelines Framework for forest-based materials Retrieved from httpwwwnestlecomasset-libraryDocumentsMediaStatements2012-October Nestleacute20Responsible20Sourcing20Guidelines20for20Forest-based20Materials20October202012pdf


United States Securities and Exchange Commission (SEC) (2013) Disclosing the use of conflict minerals Retrieved from httpwwwsecgovNewsArticleDetailArticle 1365171562058Uk4PkBZ7nOw

VF (nd) VF Corporation global compliance principles Retrieved from httpwwwvfccomVFcorporation resourcesimagesContent-PagesCorporate-ResponsibilityVFC-Global-Compliance-Principlespdf

VF (2013) VFrsquos factory audit procedure for vendors facto-ries buyers and agents Retrieved from httpwwwvfccomVFcorporationresourcesimagesContent-PagesCorporate -ResponsibilityVFC-Factory-Audit-Procedurepdf

Von Haden C (2013 July 18) Interview of senior man-ager for supplier sustainability and compliance Timberland VF

Unilever (2011) Responsible and sustainable sourc-ing standards guide for our supply partners Retrieved from httpwwwunilevercomimagesResponsible_and _Sustainable_Sourcing-Standards_guide_for_our_supply _chain_partners(2011)_tcm13-388078pdf

Unilever (2013a) Climate change partnerships Re-trieved from httpwwwunilevercomsustainable-living greenhousegasesclimatechangepartnershipsindexaspx

Unilever (2013b) Targets amp performance Retrieved from httpwwwunilevercomsustainable-livingsustainablesourcing targets

United States Agency for International Development (US AID) (nd) Tropical Forest Alliance 2020 Reducing commodity-driven deforestation Retrieved from httpwwwusaidgovsitesdefaultfilesdocuments1865TFA2020MissionGoalspdf

Richard M Kashmanian is a senior economist with the US Environmental Protection Agencyrsquos Office of Policy Office of Strategic Environmental Management in Washington DC During his nearly 30-year tenure in the policy office he has undertaken and managed numerous projects related to environmental stewardship sustainability innovations and incen-tives He has written more than 40 papers on these and related topics He led the development of and managed US EPArsquos Performance Track Corporate Leader Program He holds an MS and a PhD in resource economics from the University of Rhode Island He can be reached by email at KashmanianRichardepagov

Justin R Moore holds a Master of Public Administration from the University of Pittsburghrsquos Graduate School of Public and International Affairs concentrating on international energy and environmental planning In particular his research has focused on the linkages between environmental planning and sustainable development both nationally and internationally He has conducted interviews with Japanese officials on nuclear energy planning engaged in environmental and social impact assessments in Mexico and currently studies the reclamation of vacant lots as urban green spaces He can be reached by email at jrm187pittedu


Coca-Cola considers a healthy secure and

sustainable agricultural supply chain to be critical

to protecting the well-being of the communities

in which it operates meeting the expectations of

its stakeholders including consumers and cus-

tomers and enabling the success and growth of

its business (Coca-Cola 2013a)

In its operating context and strategy Gap Inc

states ldquoWe are strengthening our environmental

strategy to focus more comprehensively on our

supply chain to ensure that our company thrives

in a rapidly evolving business environmentrdquo

(Gap 2014b bullet 3)

Unilever set a goal in 2010 to double its sales by

2020 while reducing environmental impacts from

its products by 50 adding ldquoonly through part-

nering with our suppliers will sustainable and prof-

itable growth be achievablerdquo (Unilever 2011 p 1)

Tesco expresses a similar sentiment by linking

its supply chain to the companyrsquos sustainability

with the statement ldquoOur strong belief is that

we cannot build a sustainable business on an

unsustainable supply chainrdquo (Tesco 2013 p 37)

In addition Coca-Cola McDonaldrsquos Nestle

PepsiCo Procter amp Gamble SC Johnson Uni-

lever and other companies refer to responsible

andor sustainable sourcing

Supply Chain Impacts on CompaniesA companyrsquos supply chain can represent a

significant percentage of its overall environmen-

tal impact during the lifecycle of its products For

example 96 of Timberlandrsquos carbon footprint

takes place within its value chain beyond its

owned operations (Timberland 2013) McDon-

aldrsquos estimates that approximately two thirds of

its carbon footprint is associated with its sup-

ply chain with livestock as the biggest driver

of emissions (Starr 2013) Unilever determined

that some of its biggest impacts (eg greenhouse

emissions waste and water use) occur in its sup-

ply chain (Unilever 2011)

made the following statement in a document

discussing its supply chain

Given the size scope and complexity of

a companyrsquos supply chain especially for

a large multinational organization like

Baxter supply chain focused sustainabil-

ity initiatives can have dramatic posi-

tive contributions to a companyrsquos overall

sustainability efforts For healthcare

companies maintaining a safe secure

and reliable supply chain is essential to

ensure patient safety Also a significant

amount of a companyrsquos overall environ-

mental footprint is represented by its

supply chain so collaborating with sup-

pliers to improve their performance can

collectively support the companyrsquos overall

performance (Baxter 2013a para 1)

Baxter also makes

a clear connection be-

tween its suppliersrsquo

and the companyrsquos

performance in its

ldquoSupplier Quality Stan-

dardrdquo stating ldquoBaxter

is committed to developing manufacturing pro-

cesses that are inherently less wasteful and haz-

ardous minimizing or eliminating adverse envi-

ronmental impacts from the beginningrdquo (Baxter

2011 p 4) In the same document the writers

go on to say ldquoBaxterrsquos suppliers are responsible

for the quality related activities of their sup-

pliers subcontractors service providers andor

material sourcesrdquo (Baxter 2011 p 4) Baxterrsquos

requests for proposals and supplier agreements

ask each supplier for its sustainability policy

mission statement and information about how

the supplierrsquos sustainability initiatives will sup-

port the companyrsquos (Baxterrsquos) sustainability goals

(Baxter 2013b)

A companyrsquos supply chain can represent a significant percentage of its overall environmental impact during the lifecycle of its products







gonia nd p 1)






uct content claims

from the farm

through the fin-

ished goods factory

level The only way

to work towards


transparency and



























































by its stakeholders













































2010 p 35)











sources Indeed ac-

cording to a corpo-


in The Economist

again authored by


ligence Unit (2010)







































conducted of repre-



Cola Mars Inc Mc-







Coalition (SAC)

























































(Coca-Cola 2013b)


































































































of what the company




































































supplier audit



























































promotes compliance







consultants and are















ous improvement and



















Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains



















































































































































gonia nd p 1)






uct content claims

from the farm

through the fin-

ished goods factory

level The only way

to work towards


transparency and



























































by its stakeholders













































2010 p 35)











sources Indeed ac-

cording to a corpo-


in The Economist

again authored by


ligence Unit (2010)







































conducted of repre-



Cola Mars Inc Mc-







Coalition (SAC)

























































(Coca-Cola 2013b)


































































































of what the company




































































supplier audit



























































promotes compliance







consultants and are















ous improvement and



















Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains

























































































































































































2010 p 35)











sources Indeed ac-

cording to a corpo-


in The Economist

again authored by


ligence Unit (2010)







































conducted of repre-



Cola Mars Inc Mc-







Coalition (SAC)

























































(Coca-Cola 2013b)


































































































of what the company




































































supplier audit



























































promotes compliance







consultants and are















ous improvement and



















Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains
































































































































































conducted of repre-



Cola Mars Inc Mc-







Coalition (SAC)

























































(Coca-Cola 2013b)


































































































of what the company




































































supplier audit



























































promotes compliance







consultants and are















ous improvement and



















Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains















































































































































(Coca-Cola 2013b)


































































































of what the company




































































supplier audit



























































promotes compliance







consultants and are















ous improvement and



















Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains





























































































































































of what the company




































































supplier audit



























































promotes compliance







consultants and are















ous improvement and



















Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains







































































































































































































promotes compliance







consultants and are















ous improvement and



















Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains






























































































































































Young 2013) These










amp Young 2013)



























According to Nestle



























supply chains

























tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains





































































































































































tive practices














across companies























know whether doing







suppliers who want

them (Tesco 2013) A





























































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains





























































































































































































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains























































































































































BSR httpswwwbsrorg



























bull Sustainability












of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains























































































































































of supplier CSR













































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains




























































































































































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains




















































































































































outdoorindustryorg








































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains






















































































































































services













ments and consumers




































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains

































































































































































respectively































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains
























































































































































duce audit fatigue








bull Forest Trends












and land tenure











mance and
























a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains






























































































































































a software database



ing with ZDHC (Zero






2020 (Gap Inc 2014a)






















































bull 10 by 2010


























(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains
































































































































































(LWG 2012 p 6)








statement






























where the mate-

rial that makes

our footwear or

leather products

has come from is

now a concern for

many consumers

This became an

important issue

for the LWG when

the connection be-

tween cattle ranch-

ing and deforesta-

tion was identified


problem in Brazil










Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains
















































































































































Somers 2013)



















Company supply


grow andor expand


future As companies

focus more on the


supply chains and

are asked to assume













para 1ndash2)


Somers (2013)













2013 p 23)

























their supply chains





































































































































































































































































































































































































































