Ethical Supply Chain Management

December 16, 2009 In Ethical Purchasing, Ethical Supply Chain Management, Out and About

Purchasers Going Green

The Purchasing Management Association of Canada (PMAC) hosted two half-day Sustainable Procurement Showcases sponsored by Grand and Toy in November. Reeve Consulting was asked to participate in a panel discussion as the local expert on crafting Ethical and Sustainable Procurement (ESP) Policies and Procedures. Fellow panelists included Vicki Wakefield from UBC, Kevin Koertje from Boise Paper and Scott McDougall from TerraChoice.

In the form of a fireside chat panelists covered topics ranging from leveraging your buying power or creating buying groups to influence suppliers into offering sustainable options; the importance of looking at full life-cycle when calculating the true cost of purchasing green products; and looking beyond the recycled paper label and asking questions about source. Kevin McCarty, from Reeve Consulting, talked about the importance of considering ethical issues as well as sustainability and how Reeve works with clients to develop procurement policies and practices that not only allow them to purchase ethical and sustainable products, but reduce risk and strengthen their brand.

To view Reeve’s 10-Steps to Activating ESP Click Here or go to the PMAC website at www.pmac.ca and click on the Sustainable Procurement Showcase under Events.

December 9, 2009 In Ethical Purchasing, Ethical Supply Chain Management, Out and About, Reeve News

Ethical & sustainable purchasing around the dinner table

What happens when you bring some of the leading policy makers and practitioners in ethical and sustainable purchasing together over dinner? Lively and informative discussion on maintaining VANOC’s Ethical and Sustainable Purchasing (ESP) momentum, the influence of larger contracts vs. smaller ones, concerns of audit fatigue, as well as the importance of supplier engagement and looking inward at your own practices were all subjects discussed in a recent congregation of Vancouver-based thought leaders.

On November 30th Reeve Consulting hosted an Ethical and Sustainable Purchasing dinner with the goal of facilitating conversation between some of Vancouver’s movers and shakers and exploring the opportunities and challenges facing the ESP movement.

The wide range of guests included:
• Kai Alderson, Fasken Martineau
• Rory Carr, RC Products
• Harvey Chan, Mountain Equipment Co-op
• Daryl Doyle, SAP
• Councilor Geoff Meggs, City of Vancouver
• Monica Netupsky, VANOC licensing
• Melorin Pouladian, Lululemon
• Denise Taschereau , Fairware
• Tim Reeve, Reeve Consulting
• Kevin McCarty, Reeve Consulting
• Amanda Mungal, Reeve Consulting

Over dinner, the desire to ensure the momentum created by VANOC is maintained post-Vancouver 2010 was discussed. Small licensees, in particular, have been able to leverage the VANOC license to encourage factory compliance and there is concern that the once the Olympics is over the influence small companies have on their supply chains will dwindle.

Common challenges raised by purchasers were both lack of buying power relative to overall factory production and audit fatigue on behalf of factory owners. Rory stated that he heard reports of one factory that had to conduct nearly one audit a week to keep up with the demands of factory compliance. Harvey suggested one possibility for addressing audit fatigue is to place more emphasis on direct engagement with suppliers and less emphasis on using a particular audit. If a factory has passed a standard audit then accepting those results while directly engaging the factory owner may bring about a more fruitful outcome. These comments lead into deep conversation on ways to share factory audit information without losing competitive edge and better ways to directly engage suppliers.

Monica and Denise both suggested that educating consumers needs to be a high priority in furthering the ESP momentum fueled by VANOC. Rory suggested that combining this with some kind of positive recognition for companies that practice ESP rather than negative recognition might help consumers make more informed choices. Often consumers are made aware of the companies they shouldn’t buy from rather than the good ones they should buy from.

Melorin and Daryl recognized the significant opportunity for large companies to move beyond “greening” their retail product by “greening” their operations. Denise agreed, stating that in her work she often finds that “green” companies have put so many resources into their retail product that they have none left for internal operations and often turn to her when they realize their promotional items are in direct contrast to their own retail product.

Also, there was a good discussion of how purchasing organizations can contribute to human rights violations by putting unreasonable demands on their suppliers. For example, when a large order is needed immediately, then it may be that employees are required to work longer days that are in violation with international labour conventions. It was agreed that it is important for purchasing organizations to recognize their influence on factory labour conditions in order to help their suppliers comply with international labour standards.

The dinner wound down with everyone feeling energized and more connected. The Reeve Team really enjoyed hearing what our industry colleagues had to say and looks forward to another opportunity to continue these discussions.

November 9, 2009 In Ethical Supply Chain Management, Out and About, Sustainable Products

Sustainable Fashion?

As Vancouver Fashion Week winds down today, one might ask oneself what impact fashion might have on the environment and working conditions around the world? What, if any, positive impact would sustainable choices in fashion make to the environment? For the fashionably conscious switching from haute couture to baggy hemp garments doesn’t really seem like a choice. Is baggy hemp the only choice?

Vancouver Fashion Week brought some answers to these question last Friday at their Eco Fashion Show in the Colin Campbell building. Thanks to Paige Donner from Greening Hollywood Reeve Consutling’s Amanda Mungal had the opportunity to attend the show and was quite impressed with the work of our local designers. Not only were the clothes completely wearable and fashionable, each designer considered the environment and working conditions in their choice of textiles.

After the show Amanda met up with Paige to discuss what makes fashion eco-friendly? The most immediate answer was textiles; what is the environmental impact of their processing, what if any employment standards are adhered to in the manufacturing plants, is the resource being used sustainable? But like most things the answer is a bit more complicated.

Bamboo has of late been the hot new trend in sustainable textiles but questions have been raised in regards to its carbon footprint as well as the amount of water and chemicals used during the processing. The proponents of bamboo have argued that at least they are taking steps in the right direction, which is true. All change and innovation has a growth period during which shortfalls will need to be addressed.

Another option is 100% organic cotton. Organic cotton is currently produced in 24 countries around the globe its production is growing at a rate of 50% a year. The switch to organic cotton is important not just for the sake of feeling earth friendly but consider this: regular cotton takes up 2.4% of the worlds cultivated land mass but makes up for 16% of the use of insecticides. Imagine the impact that a large-scale move to organic cotton would have on the planet. Cotton can be grown all over the world, reducing its carbon footprint and with Fair Trade practices in place it would be a financially viable crop that supported local economies. Organic cotton is still significantly more expensive than regular cotton, but as more people get on board production will rise to meet demand and prices will come down.

Possibly the most environmentally friendly ‘R’ and the most overlooked is Re-use. Our consumer society has not embraced this notion to its fullest as we are encouraged to regularly buy the newest item that is better for the environment. Some designers have embraced the concept of Re-using by creating new items out of previously used fabrics. Planet Claire is an example of a local designer who manages to employ the concept of Re-use by selling and/or incorporating vintage clothing, using earth friendly fabrics, including seaweed and employing socially responsible labour practices.

So to answer the question can fashion be sustainable, does it matter and could making sustainable choices have an impact? Most definitely! Furthermore, as discovered at Vancouver’s Eco Fashion Show it can be cutting edge and stylish as well.

October 19, 2009 In Ethical Supply Chain Management, Waste Reduction

Sustainable Purchasing: a tool for tackling waste reduction

From October 19th to the 25th Canadians are being challenged to reduce their waste. 

Since 2001, Waste Reduction Week (WRW) has been organized by a coalition of provincial and territorial recycling and waste reduction associations to inform, engage and empower Canadians to reduce, reuse and recycle their waste.  The program targets schools, local governments, businesses, non-profit organizations and individuals and provides educational resources to help Canadians reduce waste in all facets of daily living.

At Reeve Consulting we stand behind the three R’s of waste management (i.e. reduce, reuse and recycle) and see sustainable purchasing as a powerful tool to reduce potential waste at the source.  More and more governments, businesses and institutions are developing sustainable purchasing programs that aim to reduce the amount of waste they are generating.  There are many simple, yet effective, strategies to managing waste at the source.  Some examples include the following:

  • Work with your suppliers to reduce the amount of packaging they use.
  • Develop take-back programs that allow you to return products and/or packaging to your suppliers for reuse and/or recycling.
  • Rent or lease products that are only needed in the short-term so that they can be returned and reused.
  • Specify when buying new products that you require them to be made of recycled materials, where possible.
  • Embed clauses in your service contracts to ensure your service providers also strive to reduce waste.

Waste Reduction Week is an excellent time to start to assess how you can leverage your purchasing power to reduce the amount of waste your organization produces.  Contact Reeve Consulting to learn more about how your organization can build a sustainable purchasing program that will help to reduce waste at the source. 

Visit www.wrwcanada.com for more information on Waste Reduction Week 2009.

July 8, 2009 In Ethical Supply Chain Management, Out and About

Reeve ‘Out and About:’ Reeve Consulting Visits Sustainable Coffee Plantation in Nicaragua

Selva Negra (Black Forest) Coffee is grown at 4,000 feet above sea level in the highlands of Northern Nicaragua. The estate has been producing fine Arabica coffee for over 100 years, with the tradition of shaded coffee which helps preserve the estate as virgin forest. At the farm they also operate a sustainable tourism venture that includes a resort, restaurant, coffee tour and grow vegetables and flowers for on-site consumption and commercial sale. In June, Kevin of Reeve Consulting visited Selva Negra to learn more about sustainable coffee and tourism.

Selva Negra is a privately owned farm that is not Fair Trade certified, since it is not a cooperatively owned and operated organization and is therefore not eligible for this certification. However, it does respect Fair Trade standards as well the Rainforest Alliance and Smithsonian Institute sustainable coffee standards. Their coffee currently holds the Rainforest Alliance “Eco-OK” label and, although not certified as “Bird Friendly,” the coffee plantations do fall into the ‘rustic’ and ‘traditional polyculture’ bird friendly shade gradient, the most bird friendly coffee plantation categories.

Quality social conditions are an important component in Selva Negra’s sustainability standards. The entire operation employs 400 individuals year-round and during the harvest season this number almost doubles with migrant workers. The quality of life of all the workers at Selva Negra appears to be quite comfortable and above average of many coffee estates. The employee’s benefits include:

• Housing
• Schooling
• On-site medical clinic
• Sponsored baseball teams and social events
• Skills training and conferences
• On-site convenience store

Selva Negra has been awarded the “Semper Virens” (Always Green) recognition in the International Ecological Summit in October 1995, and is a member of the Specialty Coffee Association of America. They are also working with the Rainforest Alliance to meet sustainable tourism standards which address both environmental and social conditions.

Selva Negra currently sells their award winning coffee across North America and can be found in select Whole Foods grocery stores. Visit www.selvanegra.com to learn more.

April 21, 2008 In Ethical Supply Chain Management

Associations Attempt to Address Suppliers’ “Audit Fatigue”

When social compliance standards vary from organisation to organisation, many suppliers can experience what is known as “audit fatigue”.  As the expression suggests, it is common for suppliers to have several social compliance audits a year.  Furthermore, different auditing standards may require different corrective action plans (CAPs).  As a result, factory owners spend time and money endeavouring to meet all manner of standards, which can sap production resources and drive up costs.

A recent article in the Vancouver Sun on VANOC’s Buy Smart program illustrates the issue of audit fatigue and how it can impact the flow of business.  The article cites that one licensee factory refused to be audited as it had already endured five time-consuming audits previously and could not afford any further interruptions.  Obviously this factory does not meet VANOC’s minimum standards but it may in fact be compliant with The Code.

Two issues emerge as a result of this scenario.  One, it speaks to the lack of consistent social compliance auditing standards.  Two, it demonstrates that auditing can be duplicative, and therefore inefficient.  It is not uncommon for three or four competitive brands to have their products made in the same location and thus, having three or four individual audits seems unnecessary and wasteful.

Creating consistent auditing standards is not a new issue and so initiatives exist, already.  As an example, the Sweat Free Consortium hopes to bring both municipal and State governments in the U.S. under the same set of standards.  Groups such as the Ethical Trading Initiative (ETI) or the Fair Labour Association (FLA) also advocate for consistency in Code of Conduct standards.  This issue will certainly receive more attention as more organisations incorporate social compliance programs and we’ll likely be writing about it more so stay tuned!

For the latter issue of duplicating efforts, companies such as Fair Factories Clearing House (FFC) and the Supplier Ethical Data Exchange (SEDEX) provide opportunities for companies to eliminate these inefficiencies through sharing information.  Using custom web-based platforms, member firms are able to share information about workplace conditions in manufacturing facilities around the world on an optional basis.  FFC and SEDEX differ from ETI and FLA in that they don’t endorse one Code nor do they assign pass or failing grade to factories.  These systems simply allow aggregate audit information to be shared.  The aggregation of data addresses those issues related to antitrust or risks to a supplier’s competitive advantage.

If social compliance auditing is becoming a big part of your operation, using systems such as the FFC or SEDEX may not only allow you to store and organise your audits on a secure database, but it also could bring cost savings and increased efficiency to your program.

Here is a recent press release from FFC announcing Levi Strauss & Co., Nike Inc., Nordstrom, and Abercrombie & Fitch as its first “sharing members” for its new platform that was launched April 2, 2008.

http://www.fairfactories.org/press/Sharing%20Platform%20I%20launch%20press%20release.doc

Article in Vancouver Sun can be accessed at:

http://www.canada.com/vancouversun/news/story.html?id=b325f36b-97aa-4aec-8fea-3477d8a32cb9&k=68387