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Supply Chain
More Awareness of Environmental Regulations Needed to Tackle Water-Related Supply Chain Risks

A brief released Friday by Sedex Global and World Wildlife Fund (WWF) finds that the majority of environmental non-compliances in global supply chains originate from a lack of understanding of relevant laws and regulations, despite the fact that the majority of self-assessors believe they meet all relevant requirements. The brief concludes that although positive efforts are being made to manage and set targets around water risks, improved, more collaborative systems are needed to help suppliers ensure environmental legal requirements are met.

Published in the run up to World Water Day (March 22), the new Sedex WWF Water Risk Briefing, part of a series created by Sedex and partners to raise awareness of responsible sourcing issues, analyzed data from over 20,000 audits on the Sedex Global platform to reveal key insights into how water is managed throughout global supply chains.

The briefing studies the partnership between Sedex members Marks & Spencer and Woolworths (South Africa) with WWF and the Alliance for Water Stewardship in South Africa’s Western Cape as an example of successful collaboration. The project worked with nine farmers in the stone fruit supply chain to help assess their water usage and identify opportunities for improvements, as well as bringing the farmers together with other catchment stakeholders to assess the wider catchment risks. The resulting water stewardship opportunities will invite other farmers, the municipality and urban residents to take part, further spreading awareness and encouraging collective action.

“We don’t expect all companies to be water conservation specialists. As this brief shows, the issues are much more complicated than people realize,” said Lindsay Bass, manager of US corporate water stewardship at World Wildlife Fund. “But that’s exactly why collaboration is essential. We all need to work together to facilitate new, innovative ways to responsibly manage and share water.”

“Water-related supply chain risks can have a profound impact on companies by affecting profitability, brand value and even ability to operate,” commented Marianne Voss, report co-author at Sedex. “Good examples from Sedex’s global membership and beyond highlight how capacity building can aid suppliers’ understanding and further collaboration on a local, river basin level as well as on a bigger scale.”

The Water Risk Briefing will be used to prompt discussion around the wider topic of resource scarcity at a panel discussion at the Sedex Global Responsible Sourcing Conference on March 25 in London.

In November, CDP released its latest annual global water report, which found that 68 percent of businesses report exposure to water risk that could generate a substantive change in their business, operations or revenue. 22 percent of companies anticipate that issues around water could actually limit the growth of their business. Then in January, CDP assessed climate and water data disclosed by suppliers for its 2014-15 supply chain report, which determined that lack of preparation has left supply chains in Brazil, China, India and the US more vulnerable to climate risks than those in Europe and Japan, while suppliers in China and India deliver the greatest financial return on investment to reduce their greenhouse gas emissions and demonstrate the strongest appetite for collaboration across the value chain.


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