Harnessing Value Chains for the SDGs: How Far Have We Come, and What Next to Deepen Scale and Impact?

Businesses, by harnessing their value chains, can be powerful drivers of social, economic and environmental progress and, consequently, can play a critical role in achieving many of the draft SDGs, most notably: Goal 1: ending poverty, Goal 2 ending hunger, Goal 5: achieving women economic empowerment and gender equality, Goal 8: promoting sustained, inclusive and sustainable economic growth, Goal 12: ensuring sustainable production and consumption patterns, Goal 13: taking urgent actions to combat climate change and its impacts, and Goal 15: protecting terrestrial ecosystems.  

A growing number of companies are actively integrating social, environmental and economic improvements in to core business operations and their value chains, working with certification schemes like Fairtrade and Rainforest Alliance, and through sector and issue specific focused platforms and initiatives.

As the world starts to gear up to adopt and deliver the SDGs, this online discussion will draw on the perspectives of leading businesses, civil society organisations and development agencies, to take stock of where progress is being made to harness value chains for social, environmental and economic impact.  Contributors will consider how to build on progress to deepen impact and increase scale, and identify key enablers and barriers for business including governance and regulatory environments, and how to strengthen them.

Key questions to be addressed are:

  1. Where has the most progress been made in harnessing value chains for social and environmental impact, and where do the challenges remain for companies looking to translate principles in to practice?
  2. What are we learning about the key enablers for business seeking to improve their ESG performance, including the role of good governance and regulatory environments?
  3. How can businesses and development partners collaborate more effectively to take ESG performance to the next level of scale and impact, including the reporting of impact?

 

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Thanks Zahid for a good discussion - have some thoughts to go back into our team!
 
Zahid Torres-Rahman said:

That brings us to the end of the live segment of this discussion.  As always, we'll leave the discussion open, so please do feel free to continue posting your comments.

A big thank you to our panel, and to all of you who joined in today.


If you'd like to read more about the topics covered today, be sure to read the blogs in our Harnessing Value Chains Series this week:

This discussion is part of the Prosperity Theme of our Business and SDGs programme, supported by the UK's Department for International Development.  Visit the SDGs Zone here: http://sdgs.businessfightspoverty.org

Thanks for these fine points Sean about the systemic and multifaceted nature of problem solving and streamlining agricultural value chains.  ICTs and mobile phone technologies help enable these types of holistic, multi-disciplinary approaches to ag.  To my knowledge there have been a few initiatives to measure the impact of these ICT/mobile ag technologies and it seems there is a lot of room for more robust impact measurement in this area.  

Zahid Torres-Rahman said:

That's a great question, Sean.

Sean de Cleene said:

Being involved in a number of different value chain initiatives in the agriculture sector I am seeing that many of the solutions required are often systemic and multifaceted in nature and take us beyond the traditional single project based approach to solution solving towards a more platform based, or collective action, way of thinking that involve a series of cross sector actors or cross initiative actions coming together in a more aligned way. This poses challenges for traditional supply chain auditing as it will require us to be looking at how do you measure impact of a series of disconnected actions that come together at differing points along any given value chain. However before it is possible to measure collective impact there is a need to become a lot better at also coordinating and aligning actions being undertaken across different sectors  in order to bring about the necessary scale of action to achieve genuinely transformational change at an entire value chain level. This also requires  the building up of local capacity to effectively catalyse, broker and facilitate such multifaceted action and a policy environment to support this as we are seeing through the SAGCOT Centre in Tanzania amongst others.

 

My question is how much work is being done to look at measuring these more platform orientated or collective action approaches when it comes to impact assesment on the ground?

Thank you for hosting us Zahid. I look forward to following the ongoing Business and SDGs programme.

Zahid Torres-Rahman said:

That brings us to the end of the live segment of this discussion.  As always, we'll leave the discussion open, so please do feel free to continue posting your comments.

A big thank you to our panel, and to all of you who joined in today.


If you'd like to read more about the topics covered today, be sure to read the blogs in our Harnessing Value Chains Series this week:

This discussion is part of the Prosperity Theme of our Business and SDGs programme, supported by the UK's Department for International Development.  Visit the SDGs Zone here: http://sdgs.businessfightspoverty.org

Thanks Stuart - I hadn't heard of BEAM so that was a good link. I have also been working with inter alia the Sustainable Food Lab,  the Practitioner Hub for Inclusive Business and The Partnership Initiative on some of this thinking so there may be scope for alignment.  Cheers.

Stuart Coupe said:

Yes thanks Sean, the solution to a market blockage my not necessarily be found at the grassroots level.  BEAM Exchange are working on such impact questions.

Zahid Torres-Rahman said:

That's a great question, Sean.

Sean de Cleene said:

Being involved in a number of different value chain initiatives in the agriculture sector I am seeing that many of the solutions required are often systemic and multifaceted in nature and take us beyond the traditional single project based approach to solution solving towards a more platform based, or collective action, way of thinking that involve a series of cross sector actors or cross initiative actions coming together in a more aligned way. This poses challenges for traditional supply chain auditing as it will require us to be looking at how do you measure impact of a series of disconnected actions that come together at differing points along any given value chain. However before it is possible to measure collective impact there is a need to become a lot better at also coordinating and aligning actions being undertaken across different sectors  in order to bring about the necessary scale of action to achieve genuinely transformational change at an entire value chain level. This also requires  the building up of local capacity to effectively catalyse, broker and facilitate such multifaceted action and a policy environment to support this as we are seeing through the SAGCOT Centre in Tanzania amongst others.

 

My question is how much work is being done to look at measuring these more platform orientated or collective action approaches when it comes to impact assesment on the ground?

Hi Benjamin,


The system has been developed to track volumes of cotton through supply chains from producer group to end brand or retailer constantly converting the weight of product (at each production stage) back to cotton lint.

The new model I referred to is not based on end product certification or composition but in fact based on company wide cotton sourcing agreements between Fairtrade and end brands or retailers. The Fairtrace system I referred to is the 2nd party verification route for validating that the sourcing claims made by the end brands or retailers have been tracked through the system before they are communicated publicly.

Best wishes

Huw

 


Benjamin Andrews said:

Hi Huw,

Please could you elaborate on how the tracing system works? Is it a system based on weight of ethical cotton bought calculated out to decide the weight of ethical garments that can be produced or does it require only the ethical cotton to be used in the final product?

Thanks

Ben Andrews

P.s I recently worked in the cotton classing department for Plexus Cotton 


Huw Prior said:

Thanks Alison, this is Huw Prior and I work alongside Subindu Garkhel at the Fairtrade Foundation. As you may already be aware, Fairtrade offers transparency and traceability throughout the cotton supply chain and we have evolved our cotton model to a new Sourcing Programme involving an end to end track and trace tool called Fairtrace. We think that this new model is complimentary to our existing product labelling cotton scheme by empowering credible sourcing claims by brands and retailers. The credibility of these claims is enhanced by the fact that each stage of the supply chain from the farmer right through to the brand or retailer is linked through this tool. Hopefully this can help to meet the greater transparency needs of the cotton industry you mention in your comment.
 
Alison Ward said:

Giving a perspective on the garment sector good progress has been made at a factory level, with reduced water use, less and better chemical management and more attention on workers rights.  More to do!

But the cotton sector has many challenges -  a fragmented supply chain, with many brands relying on Tier One suppliers to undertake sourcing on their behalf, due to the complex nature of transactions.

Greater transparency from farm to garment is needed in order to connect brands and manufacturers to the beginning of the supply chain.  We are beginning to see a step change here, with brands increasingly establishing sourcing teams in India and China and with some developing vertically integrated supply chains.

Business and development partners need to collaborate from the onset, and they clearly define each others roles as this is key to the success of any private sector based initiative, because the challenges is private sector normally calls upon the development sector to solve some problems they would have created, and there is a missed opportunity for co-creation. In order to harness the ability of the PS Value-chains will need to encompass indicators that are specific towards achievement of the SDGs, the VC also has the potential to bring together the multiple players in a community through the MSP facilitation aspects, however there is need for VCs to have a strong gender inclination because at large value chain development is weak when it comes gender equality issues so SDGs can influence a look at VC4Gender, or the promotion of Women friendly VC etc.

Thanks Francis - The guide is a really valuable tool for business.  Thanks for sharing! Rachael

Francis West said:

Hi Rachel,

On the back of some work we did with the tour operator Kuoni on bringing Children and/or their representatives into an impact assessment process, we produced this guide that outlines the practical steps to take: ENGAGING STAKEHOLDERS ON CHILDREN’S RIGHTS

Rachael Clay said:

Francis,

This is a great example.  Can you give us some insight in to the way you brought children , as stakeholders, in to the process?  Thanks.



Francis West said:

Where companies have undertaken impact assessments, this has helped focus where value chains and expertise can be harnessed for positive impact. If a company integrates the voices of the most vulnerable into its human rights impact assessments, it will be better placed to determine where to focus its efforts to positively support the delivery of the SDGs. This is clear from the experience of the telecoms company Millicom. After conducting a child rights impact assessment across its supply chain with Unicef, Millicom supported the creation of a new SMS service in Tanzania that allows parents to register new births as well as those of children under five on any mobile phone, straight to a centrally-run database. Birth registration- the subject of another SDG target- rose from nine per cent to 40 per cent in the pilot region of Mbeya in six months.

This isn't an easy process however. There is a challenge in that determining the impacts of a business (and therefore the opportunities to best support desirable social outcomes) requires consultation with stakeholders that are potentially or actually affected by a company’s operations and supply chain, particularly vulnerable groups, rather than with those organisations that have best managed to grab the company’s attention. Impacts on individuals take place in specific geographic locations at specific times and while it might be easier to undertake stakeholder consultation with NGOs HQ’d in London, businesses really need to get as close as possible to the voices of those at the sharp end of impacts in the value chain.

 

For Unicef UK, that means bringing the voices of children into the due diligence process so that a company can understand how they affect their lives beyond the traditional focus on child labour (which remains a grave issue with 168 million child labourers worldwide). Children are important stakeholders for business - as consumers, family members of employees, young workers, and as future employees and business leaders- but are rarely treated as such. Almost every business activity can leave a footprint on children’s lives - whether through employment conditions of parents, product safety, marketing practices or environmental impact.


Zahid Torres-Rahman said:

Let's start with the first question:

Question 1: Where has the most progress been made in harnessing value chains for social and environmental impact, and where do the challenges remain for companies looking to translate principles in to practice?

John - I like your suggestion to shift from audits to engage workers and even consumers, and would be great to see leadership from one sector or geography.  Rachael

John Morrison said:

I think there should be a year where no companies are allowed to do auditing or social reports, instead the money should be invested in more innovative approaches that directly involve workers themselves, shareholders or consumers. It will take something significant to shift us out of current behaviour patterns. Post Rana Plaza at least got actors thinking together and taking an impact-led approach - but how successful have we been in involving consumers in such approaches?



Rachael Clay said:

Hi, Rachael Clay, Director of Ethicore here.

The question of how to translate principles in to practice is a critical one.  Many companies want to move beyond box ticking and reporting, to really focus on solutions to challenging risks and problems.  How can we turn projects and pilots in to real long-term changes in value chains?  What support do you think is required for companies (and INGOs) to translate?

Thanks for your thoughts!

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