New research from Stanford University reveals that the truth behind ethical and sustainable sourcing claims are far more complicated than previously imagined.
In the first large-scale analysis of corporate practices for sourcing sustainable materials, Stanford researchers found that while more than half of global companies surveyed are actively deploying sustainability practices in their supply chains, their effects and reach may be limited.
“Our results show a glass half full and half empty,” said Eric Lambin, George and Setsuko Ishivama Provostial Professor at Stanford’s School of Earth, Energy & Environmental Sciences and study co-author.
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program!Published in the Proceedings of the National Academy of Sciences, the analysis relates sourcing practices to the UN Sustainable Development Goals. With more than 80 percent of global trade relying on complex global supply chains and employing one in five workers, business has a critical role to play in delivering the ambitious environmental and social objectives outlined in the SDGs.
Until now, there has been no comprehensive, empirically grounded understanding of how companies address sustainability in their supply chains. To remedy this, Stanford researchers developed a global database based on a random sample of 449 publicly listed companies in the food, textile and wood products industries to provide insight into how the private sector contributes to advancing global sustainability via their supply chains. Half of the companies included in the analysis use some form of sustainable sourcing practice ranging from third-party certification to environmental training for suppliers.
Researchers shared their findings in “Companies’ Contribution to Sustainability Through Global Supply Chains.” According to the study, more than 70 percent of sustainable sourcing practices cover only a subset of input materials for any given product. For example, recycled materials may be used in a product’s packaging, while the rest of the product’s impact remains much the same. What’s more, 25 percent of sustainable sourcing practices only apply to a single product line.
Researchers also found that interventions were predominantly focused on materials, with only 15 percent of sustainable sourcing practices focusing on health, energy, infrastructure, climate change, education, gender or poverty. And though supply chains are complex and multi-tiered, almost all of the sourcing practices examined address only a single tier in the supply chain, with a heavy focus on first-tier suppliers.
“Advancing environmental and social goals in supply chains can quickly become very complex,” said Johan de Zeghar, a postdoctoral fellow at Stanford Graduate School of Business and coauthor of the study. “This complexity is reflected in our findings that companies use a broad range of strategies and that current efforts have limited reach.”
While there is still room for progress, the study’s authors hope the findings, coupled with increasing pressure from consumers and activist groups, will serve as a call to action for global companies to implement more comprehensive supply chain interventions.