Photo: Bajaj Allianz
3 Ways to Make Your Supply Chain More Climate Resilient
Your business sells products that depend on agricultural commodities. You have built a great brand, you have a loyal and expanding customer base and great relationships with your providers. But is your supply chain really sustainable? Can climate change affect your business?
Most of the debate and focus in Europe and the US has been on how to mitigate climate change. Yet you keep hearing of bad harvests, conflicts, disasters that make life hard for your suppliers, affect quality and get reflected in the prices you pay. You find that the producers of your raw materials, especially agricultural small producers of cotton, coffee, cocoa, or fruit, are the ones at the forefront of fighting climate change as they face it right now, not just in some distant future. A fungal infection due to a mild winter can wipe out entire plantations, taking over 5 years to recover.
Eroded land and forests uphill cannot stop the irregularly heavy rains of El Niño, and these leach out nutrients from plantations in the valleys, affecting quality and quantity alike. It is clear that producers have to become more resilient and identify and prevent the effects that climate change can have on their plantations. Here are three ways you can contribute and make your own business more resilient.
Premium prices and certification
Paying a premium for a good quality product is not just a stamp on your packaging and some pictures of happy children. A bit of the license fees you pay enables the Fairtrade movement, Rainforest Alliance and the like, to train producers in climate-friendly agricultural practices. The premiums allow communities to invest in becoming more resilient, once they identify the risks they face.
Compensating for the carbon emissions of your products is another way of addressing this, if, for example, you fund better cooking technologies that reduce deforestation in coffee-producing regions. The new Fairtrade Climate Standard enables you to purchase carbon credits directly from small producers and communities.
Contributing to more resilient environment and community for your producers makes for a stronger and more sustainable supply chain, a better quality product, loyalty of suppliers and customers alike, and great stories to tell your customers and your grandchildren. For example, you can help teaching them to identify their climate risks, prevent disease or to improve farm practices*; help them plant trees uphill to stop erosion; improve their technology base with simple means. Companies all over the sustainability spectrum – from 100% Fairtrade Cafedirect in the UK, through global Starbucks, to discount supermarket giant Lidl are already funding such projects with some of their own producers. Start by getting to know yours, asking what they need, and finding the right implementing partners.
* Images: a rice farmer in India pioneering sustainable agricultural practices - the use of natural pesticides and watershed management
This blog is part of a special series on Inclusive Business and Climate Change and has been published on Business Fights Poverty with the support of Citi Foundation.