Category Archives: CSR

When Are We Going To Wake Up and Stop Wasting Food!

Recently, Italy introduced a new law designed to reduce food waste which is being celebrated by farmers and restaurant owners as it simplifies the donation of excess food that ends up becoming food (or field) waste. Approximately 100 Million tonnes of food across the EU is wasted each year. (Source: European Commission) That amount of food would sufficiently feed at least at least another 100 Million people annually (as the amount of food a person needs in a year varies between 0.5 and 1 tonne depending upon diet, weight, etc.). This is just in the EU. In the US, recorded food waste exceeds 30 Million tonnes, and is probably much higher. (Source: Feeding America) That’s at least another 30 Million people that could be completely fed. Putting these numbers together, and assuming the average amount of food consumed by a person a year is 0.75 tonnes (and not 1), that’s about 175 Million completely satiated. There are almost 800 Million undernourished people in the world. If we assumed that they were surviving on only half the food they needed (which is not reasonable, as that’s barely sustenance, and a lot of these undernourished people are in developed countries and still eating enough to work), this says that the recorded food waste in 1/7th of the world’s population could cut the number of undernourished people in the world by half! By Half!

Italy is only the second country in the EU to adopt such laws (following a similar move by France earlier this year – Source: The Guadian), so let’s hope that at least in the UK, sanity reigns. Because in North America, and in the US in particular, it does not. It’s illegal in many cities to feed the homeless (Sources: NPR and MIC), even if the food is not passed its expiration date and untouched, or you are a Pastor (Source: The Daily Signal)!. In some states, game meat donated to shelters is burned (Source: Daily Caller). And even if you can donate food without getting fined and arrested, and someone gets sick because, while it was still good when you donated, by the time it was prepared and eaten it wasn’t (or it was contaminated when you received it with e-Coli and you didn’t know), then you can get sued for millions of dollars, so why take the risk?

This is why, as per our post from August, 2012 on why it’s Not Criminal, But it Should Be, America Trashes 40% of its Food Supply. It’s insane!

Food reserves have not recovered from the all time low, over 800 Million people, including almost one third of children in developing countries, are malnourished and the two richest economies in the world (the US and the EU) are collectively wasting enough food to solve over HALF of the problem. All this in a time when agriculture produces 17% more calories per person per day than it did 30 years ago. This is enough to provide everyone in the world with at least 2,720 kCal per day, which is 30% more calories than an average person needs. Instead, the cost of staples is rising, access to food by the lower class and malnourished is falling, and, because of stupid, stupid laws made by stupid, stupid lawmakers, the situation is getting worse. When it should be 10 times better!

As per our research from four years ago, there is no excuse for wasting more than 4% of food. (That’s still too much, but the 100% solution is always difficult to achieve right away. And when the 90% could be achieved tomorrow, let’s start there!) Not only would sanity (and laws mandating food donations and feeding the homeless instead of laws preventing this) reduce costs by $150 Billion and methane emissions by 22.5% (as rotting food makes up 25%), but the US would NOT have anyone undernourished! (14% of households in the US are food insecure! Fourteen Percent! The US is the richest country in the world, how can this be???)

Bravo France and Italy for finally doing something right! Let’s hope the rest of the EU follows suit so at least some people won’t go hungry!

Economic Sustentation 21: Climate Change

When it comes to damnation, this is a doozy. While many damnations have a silver lining — a pocket of hope in a coat of despair — this is not one of them. Climate change is wiping out your crops, closing your shipping lanes, and, sometimes, killing your people.

Let’s consider the climate change shock waves discussed in our initial damnation post.

Hotter summers

More drought. More wildfires. More loss of crop, and more loss of life.

Colder winters

More blizzards and ice storms that shut down cities. More cold spells that freeze people to death.

More regulations

More paperwork hell as a result of dumb politicians, who confuse feelings with facts, that pass laws that often do the opposite of what they intend those laws to do (and almost never what they should do).

What can you do?

Very little, except do your best to prepare for the coming apocalypse and mitigate it as best you can.

1. Geographically Diversify Sourcing of Raw Materials

While major natural disasters can be devastating, they are usually localized to a small region so if you are sourcing from multiple regions, your entire supply is never affected at one time.

2. Maintain multiple options

In food and beverage, substitute fresh with frozen. In electronics, have designs that can use alternate materials, even if those materials are more expensive or slightly less preferable. For example, maybe you want silver for your devices (because it is more conductive), but if silver becomes scarcer than expected, copper might still get the job done.

3. Artificial options

For example, field grown is usually preferable (better, cheaper), but greenhouse grown is viable if it’s the only way to guarantee supply. (But not GMO over heirloom. Don’t believe the extravagant claims by those that profit most from GMO.) Zirconia can often replace diamonds. With a hardness of 9.5 on the 10 Mohs scale, it can often be substituted in high pressure experiments and in high power SiC electronic devices. Be creative. We’re coming into a world where only the strong, and ingenious, survive.

Siloed Supply Risk Management Just Wastes Time, Money, and Resources

In our last post on why Why Supply Risk Management Cannot Be Siloed we noted that, despite the fact that an organization’s supply chain is full of risks that could not only cripple the organization’s supply chain but cost it 100 Million or more in fines, the average organization’s supply chain is overflowing with risk (despite the fact that many of these risks could be mitigated).

Why? Because the average organization is not properly managing risk. Why? As per our last post, there are a number of issues including lack of resources, lack of time, and lack of immediacy, but the biggest issue is lack of cohesion. Even organizations that have risk management and sustainability efforts in place tend to be relatively ineffective overall because most of these efforts grew organically over time as individual functions encountered risks and needed to deal with them. This results in a very fragmented approach to risk management that is very inefficient and ineffective. Why? Each department sends its own surveys and questionnaires and reviews its own data sources and this results in:

  • a duplication of effort where
  • some suppliers will be assessed on the same dimensions twice while
  • other dimensions for the same suppliers go unassessed and
  • some suppliers do not get assessed at all while the process generates
  • false positives as well as
  • false negatives.

How can this happen? And just how much time and money is wasted? And what should be done? For the answer, check out Sourcing Innovation’s latest white-paper on Why Sustainable Supply Risk Management Cannot Be Siloed: Lessons From Leaders Who Beat the Odds, sponsored by Ecovadis. And you’ll learn not only what the correct approach is, and what it involves, but what it can do for you.

Supply Risk Management Can Not Be Siloed

In our post on Playing With Fire, we indicated that your supply chain was full of hidden risks, ready to materialize unexpectedly at a moment’s notice and bring your supply chain to a crippling halt as your bank account bleeds dry trying to deal with the damage. Risks that, in many cases, could be mitigated and prevent the organization suffering and, in some cases, losing 100 Million to fines alone.

Why? Because the average organization is not spending the time and resources required to properly manage risk, or if they are, they are not managing risk appropriately. There are a number of reasons for this, including:

  • Lack of Resources
    most organizations do not have enough people with the right expertise to effectively manage and monitor supplier sustainability efforts, and sometimes this is because there just isn’t the budget for the resources
  • Lack of Time
    most of the skilled resources in an organization barely have the time to do their jobs properly, and since risk management is hardly ever anyone’s primary job, it typically becomes a side issue
  • Lack of Immediacy
    even though there may have been hundreds of smaller incidents in the supply chain that resulted in small fines, unexpected cost increases, disruptions, and minor brand damage, if no single incident has been severe enough to get the C-Suite’s attention, something else will always be higher priority
  • Lack of Cohesion
    most risk management and sustainability efforts grow organically over time as different functions encounter risks, regulations, or sustainability objectives that need to be addressed — this results in a fragmented approach to risk management that is inefficient and ineffective

But regardless of the reason, fragmented risk management does not work. It’s the biggest reason that many organizations are losing millions, if not billions, of dollars a year due to supply chain incidents (that could have been caught or significantly reduced with effective supplier management). With every department running off in their own direction, no one knows what is, and is not, being done. And that’s a problem. But it’s one that can be addressed. How?

Check out Sourcing Innovation’s latest white-paper on Why Sustainable Supply Risk Management Cannot Be Siloed: Lessons From Leaders Who Beat the Odds, sponsored by Ecovadis, for the answer.

Failure to Monitor a Supply Chain for Risk Can Tarnish Your Brand

In our last post on Playing With Fire: Hidden Risks in Your Supply Chain, we discussed how your supply chain is filled with hidden risks which can bleed your bank account dry and bring your supply chain to a screeching halt if they rise up and rear their ugly head.

But they can do more than bleed the bank account and stop your supply chain in its tracks, they can tarnish your brand and cause permanent damage to your company. A recent study by CIRANO found that while there is an 80% chance of a company losing at least 20% of its value at least once during a five year period as a result of a negative, but well publicized, incident, a major incident that negatively impacts the brand in a significant way can be much worse. Just ask Airbus that had its stock plummet by over 26% in a single day, equivalent to a market capitalization loss of approximately €5.4 Billion, after it announced on the close of trading on June 13, 2006 that issues with the supply and installation of electrical harnesses would lead to a further six-month delay in the delivery of the A380 (and that the impact of the disruption on earnings before interest and tax would be €500M per year for four years).

Or ask BP, which, as a result of the Gulf of Mexico oil spill when the Deepwater Horizon drilling rig exploded on April 20, 2010, saw its stock price fall by 52% in 50 days. Ouch!

But it’s not just supply delays or disasters that cause loss of brand value. It’s reported violations of clean air, water, energy and other environmental acts that get environmentally conscious consumers to boycott your products after environmental activists get up in arms. It’s poor treatment, or even discrimination of, a class of people that can also get a company in trouble. If your supplier is known to regularly subject its employees to unfit working conditions and violate wage acts, that’s a problem. If a CXO regularly goes on record speaking out against minority groups’s rights (include the LGBTQ community or immigrants), that’s a problem. And if there are investigations of corruption, that’s a big problem.

It’s more than just environmental non-compliance risks that you have to watch out for. To find out more, check out Sourcing Innovation’s latest paper on Playing With Fire – 4 Hidden Risks Lurking in Your Supply Chain, sponsored by Ecovadis to find out the major categories of risk you need to watch out for, some major impacts of each type of risk, and just how many zeros they could take off the end of your bank account.