cultural differences and the supply chain disconnect

“You can’t outsource sustainability outside of your organisation” remarked Tobias Fischer during a panel discussion this week. Fischer, who is CSR project & relations manager for H&M, was speaking on behalf of the Sustainable Apparel Coalition - an industry-wide group of over 60 leading clothing and footwear brands, retailers, suppliers, not-for-profits and NGOs.

It was perhaps the most insightful comment of the whole debate. There is no way one company can place a contract with its entire supply chain to build better traceability into raw material sourcing, or demand that their customers further upstream act responsibly and become accountable for the goods they handle or consume.

It’s not as easy as just striking a deal. And it shouldn’t be. For many organisations, embracing sustainability is about wanting to do the right thing. According to Alexis Olans, who heads up adidas’ Better Place programme, most EU countries see CSR as “good housekeeping”, something that should be embedded into daily business operations as a matter of course.

But for all of this goodwill, cultural differences remain. Especially outside of the EU where countries such as China, the US and India apply less stringency … and goodwill. Global trading has built layers of complexity into supply chains and sourcing certain materials – like cotton – where traceability is virtually non-existent is now proving a real headache for the ethically minded.

I spoke to John Lewis’ head of responsible sourcing Sean Allam earlier this week on the challenges that retailers faced in trying to build more resilience into their supply chains. “I’d be surprised if anyone in the world could trace 5% of their supply chain – it’s that low,” he told me.

He pointed out some simple truths. “If you’re a factory in China, do you set yourself up for US market requirements which are probably 60-70% of your volume, or European market requirements which are 20-30%? Especially if the European requirements are a lot tougher and will cost you more money. Which market do you orientate against?”

Good housekeeping comes at a price it would seem. What is encouraging however is the emergence of alliances like the Sustainable Apparel Coalition. Fierce competitors in the marketplace, yet united collaborators in the green arena. One of the key aims of this particular coalition is to start measuring capabilities in supply chains by first forging a common language across continents and industry, and then acting on it.

According to adidas’ Olans what will result is a sound platform in which to collectively start raising standards, through pre-competitive dialogue and transferrable learning. “We have no capability as a single company to get all the answers to our questions,” she acknowledged. “This coalition is designed to move quickly, we just need to know what direction to run in”.

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