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ASCM Insights

Global Supply Chains Must Address Diminishing Biodiversity

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In the United States alone, 22 animal species and one plant variety fell to extinction last year. These losses include the ivory-billed woodpecker, the green blossom pearly mussel and a Hawaiian perennial herb — which join a sad list of 650 already extinct U.S. plants and animals. According to NPR, human activity has caused the loss of two-thirds of the Earth’s wildlife in the last 50 years. And the World Wide Fund for Nature reports that the current rate of species loss is 1,000-10,000 times faster than the natural extinction rate. If we don’t act now, the world will soon suffer its sixth mass extinction.

Of course, one of the greatest threats to species’ survival right now is global warming. As the world charges closer to the 1.5-2 degrees Celsius warming limit, scientists at the University of Cape Town and University College London are looking ahead to overshoot scenarios. Even if temperatures are ultimately brought back under the limits, these experts say we will experience irreversible damage. In particular, their research has found that Brazil — home to the majority of the Amazon — is in danger of heat waves that will replace forests with grasslands. This also would eliminate one of the world’s largest carbon sinks, further accelerating global warming.

If sustainability reasons are not enough to convince organizations to act, perhaps financial reasons will inspire the necessary motivation. Researchers at Cambridge University have created the first biodiversity-adjusted sovereign credit ratings, which show how ecological destruction affects public finances. Just a partial ecosystem collapse would increase annual borrowing costs for 26 nations (including the United States) by $53 billion by 2030. Even if environmental degradation occurs at just the current trend, Bangladesh, China, India and Indonesia would each lose notches in their sovereign credit ratings — raising interest payments, driving debt crises, and likely pushing them into default or total bankruptcy.

Following last week’s meeting of representatives of 193 nations for the 15th United Nations (UN) Conference of the Parties on biodiversity, sustainability advocates are saying too little is being done. Many decisions were postponed until the next meeting in December.

The Accountability Framework, an initiative for sustainable agricultural and forestry supply chains, is urging decision-makers to stop deforestation and ecosystem conversion immediately. Of course, this isn’t easy. We first need robust policies, effective governance, better traceability, supplier engagement, multi-stakeholder collaboration and progress monitoring.

International global disclosure system nonprofit CDP reports that only 36% of companies have no-deforestation or no-conversion policies and even fewer are setting timebound, quantifiable targets related to supply chain control systems. Yet, to effectively address the biodiversity crisis, it’s crucial to take swift action at scale.

Diverse perspectives for diverse environments

CDP promises the goal of no-deforestation supply chains is well within reach, if organizations buckle down and work diligently toward its achievement. Of course, this kind of action is amplified through collaboration, and ASCM corporate membership provides a network for doing just that. For instance, corporate members receive a 50% savings on registration for the ASCM Enterprise Certification for Sustainability, which demonstrates leadership in ethics, sustainability and economic responsibility.

Also, I hope you’ll join us on July 26 for a special corporate member event: Supply Chain Excellence Workshop — Enabling Organizational Resilience for a Sustainable Competitive Advantage. At this interactive, virtual workshop, you’ll gain valuable insights from your ASCM peers while learning from thought leaders. Register today to save your team’s spot.

About the Author

Abe Eshkenazi, CSCP, CPA, CAE CEO, ASCM

Abe Eshkenazi is chief executive officer of the Association for Supply Chain Management (ASCM), the largest organization for supply chain and the global pacesetter of organizational transformation, talent development and supply chain innovation. During his tenure, ASCM has significantly expanded its services to corporations, individuals and communities. Its revenue has more than doubled, and the association successfully completed three mergers in response to both heightened industry awareness and the vast and ongoing global impact driven by supply chains. Previously, Eshkenazi was the managing director of the Operations Consulting Group of American Express Tax and Business Services. He may be contacted at abe@ascm.org.

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