Partnership mindset – toward sustainable supply chains

Today, humans are living on credit: 7.3 billion people consume 1.6 times what the Earth’s natural resources can supply. By 2050, the world population is estimated to grow by more than two billion and will reach nine billion habitants, which will require upward of a 100% increase in food production.

Along with this rise in demand, the question of how to increase production while pre-empting regulations, minimising environmental impact and improving social conditions arises.

Moreover, customers, stakeholders and employees are demanding that corporations take a leading role in responding to the world’s most pressing social and environmental challenges, as defined by the 2030 Sustainable Development Agenda and COP21. The Paris Agreement, adopted in December 2015, represents a new beginning in the global effort to stabilise the climate before it is too late. It also recognises the importance of food security in the international response to climate change.

What we know

WWF highlights that, in the near term, food production is sufficient to provide for all, but it doesn’t reach everyone who needs it. About 1.3 billion tons of food is wasted every year – four times the amount needed to feed the more than approximately 800-million people who are malnourished. By improving efficiency and productivity, while reducing waste and shifting consumption patterns, we can produce enough food for everyone by 2050 on roughly the same amount of land we use now.

The latest report published by Food and Agriculture Organization, ‘The State of Food and Agriculture 2016’, shows that unless action is taken now to make agriculture more sustainable, productive and resilient, climate change impacts will seriously compromise food production in countries and regions that are already highly 'food insecure’. Likewise, an overhaul is needed of agricultural and food policies to shift incentives in favour of investments, worldwide, in sustainable technologies and practices.

What to ask

How should companies make sense of the increasingly complex sustainability landscape? How can corporate leaders spend less time reacting to risks and more time focusing on what really matters; for example, creating solutions and shared value? While a company’s vision for sustainable development might be embodied at every layer of the organisation, the execution happens at a hyper-local level. Large companies do not have a natural inclination for serving local communities that require a highly customised on-the-ground presence. Corporations across the globe have understood that extending reach into local contexts is mandatory, as well as the adoption of the 'multistakeholder partnerships’ approach. To do so, the food industry must embrace and promote ‘the partnership mindset’ within and across all levels of participating organisations.

The Sustainable Development Goals (SDGs) adopted by UN member states in 2015 call for multistakeholder partnerships as a key tool to achieve progress across multiple sectors. A good example is the ‘Partnerships for SDGs online platform’ that was created to encourage global engagement around multistakeholder partnerships and voluntary commitments in support of the implementation of the SDGs. By working together in partnership, all stakeholders – including farmers, companies, governments and civil society – can drive a collective effort that produces an impact that is greater than the sum of its parts.

When to act

Forward-thinking companies have realised the benefits of sustainable agriculture through enhanced crop yields, improved input efficiency and value-added risk management practices. They understand the complexity, and interlinking of issues and actors across the food system, and deploy a host of sustainable agriculture measures across their supply chains. Rather than focusing purely on individual goals, they are leveraging their influence in the market and have been working together with suppliers, investors, competitors, institutions and non-governmental organisations with the commitment to make the system work.

The power of ‘coopetition’ is key. More firms and organisations that are competing in the market have found a way to work together, resulting in a better outcome for all.

It goes beyond simple competition and cooperation, combining the advantages of both and expanding the overall size of the prize. In the food sector, coopetition has become a proven core strategy. A good example is the CocoaAction plan that brings together the world’s leading chocolate and cocoa companies in a new level of collaboration and coordination.

On a voluntary basis, this initiative develops partnerships between governments, cocoa farmers and the cocoa industry, and intends to train and deliver improved planting material and fertiliser to 300,000 cocoa farmers, and strengthen communities through primary education, eradicating child labour and empowering women.

The strategy will be measured against adherence to performance indicators, mutually agreed upon by the companies and producing country governments, with aggregate progress publicly reported on a regular basis. While ten companies have provided the financial and technical support in the development of CocoaAction and are committed to its implementation, others across the sector are welcome, and encouraged to align their efforts and activities with the industry-wide strategy.

The resulting demand for increased sustainability will encourage more companies to innovate and adopt a partnership mindset. With benefits to the environment, increased consumer trust and added profits, sustainability is a win-win for food and beverage manufacturers going forward.