Supply chain professionals think about product life cycles all the time: From raw material to final customer to recycling, understanding every stage is crucial to managing an effective and sustainable network. Many of us also apply these considerations to the products we use each day, choosing to support responsible and ethical businesses in our own buying decisions. Yet just because we know where the beans in our coffee came from, that doesn’t necessarily mean we fully understand the impact of our morning cup of joe on the environment. This is why total supply chain visibility is such a critical issue in our field and beyond.
Case in point: The Wall Street Journal reports that the European Union passed a law requiring companies to prove that seven key products — cattle, cocoa, coffee, palm oil, rubber, soy and wood — aren’t causing an increase in deforestation. “Almost 40% of the world’s 500 largest companies using the commodities covered by the new EU rules haven’t set a policy on forest loss,” reports Dieter Holger in The Journal. Those that fail to meet the guidelines face fines of up to 4% of their annual revenue in the bloc, so although the ruling is based in Europe, it still affects companies globally.
To comply, businesses will literally have to “pinpoint the plot of land” their product originates from to prove that no forests were cleared from that specific location since 2020. This is a significant date due to the largely failed voluntary pledge set by the Consumer Goods Forum in 2010, in which companies promised to achieve net zero deforestation within 10 years. Holger cites a World Wildlife Fund report, which states that trees absorb carbon dioxide, and deforestation has caused around 10% of global warming. Forest loss in 2022 alone totaled a staggering 4.1 million hectares — 11 soccer fields of trees every minute. Illegal mining, the illicit timber trade, road construction, and the increase in pastures and land invasions were the main drivers of the deforestation.
According to Bloomberg, Big Chocolate (including Cadbury owner Mondelez, Mars Wrigley, Nestlé and The Hershey Company) supports the EU law “because it looks after the environment and those who grow the crops.”
Here in the United States, similar legislation is being proposed. The Fostering Overseas Rule of Law and Environmentally Sound Trade Act of 2021 states, “Deforestation in tropical countries produces about 4.8 gigatons of greenhouse gas emissions per year. Put another way, deforestation ranks as the third largest ‘country’ in terms of emissions.”
Invest in yourself for a better future
There’s no doubt that sustainable practices lead to better business, and the supply chain organizations that prioritize circularity and ethics are going to lead the way toward a better future for all. With the right education and skills, you can be the driving force for this change at your business. Leverage your knowledge and increase your authority with one of ASCM’s certificates or APICS certifications. It will prove your desire and ability to help your supply chain leaders make the tough, but necessary, choices. Sign up now to save 15% with code SUMMER23. But hurry — this offer ends today!