Modern-day supply chains are often global and highly complex. The challenges that companies face in order to make them sustainable are equally diverse.
- Environmentally friendly production
Insufficient knowledge about sustainable cropping methods, the use of obsolete technologies in production processes or a lack of awareness about the eco-friendly management of natural resources constitute considerable obstacles to environmental sustainability among local supplier companies. The approaches used by develoPPP-backed projects to address these problems include training farmers in the sustainable use of cropping areas, encouraging production companies to employ low-emission technologies and bringing businesses into line with international environmental standards.
- Social standards and working conditions
Fair wages, a safe working environment, reliable provisions against health and social risks, equal rights for women and minorities: these are all essential elements of socially sustainable business. Projects that are eligible for develoPPP funding address these aspects by sensitising management personnel, setting up management systems or providing further training for employees. Certification to international standards can also help raise employees’ income by making local companies more internationally competitive.
- Transparency and certification
The more product components that are sourced externally and the more actors involved in the local value chain, the more difficult it is to seamlessly trace a product’s manufacturing process. At the same time, companies now find themselves under increasing pressure to demonstrate their compliance with environmental and social standards at every step along the supply chain. Preparing certification or rolling out innovative solutions to increase traceability are two of the approaches that develoPPP projects use.
How companies are using develoPPP in the field of sustainable supply chains
INDIA: First textile supply chain certified to Fairtrade textile standard
With their joint pilot project, the German clothing manufacturer Brands Fashion GmbH and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH have achieved a first by certifying an entire textile supply chain to the Fairtrade textile standard – from fibre production to dyeing and weaving through to garment manufacturing. In addition to environmental aspects, certification also extends to workplace safety, employee co-determination and the introduction of a living wage. The first products labelled supply chain-wide with the Fairtrade textile standard started selling in October 2021.
INDONESIA: Rubber supply chain to be made digitally traceable
In the past, one of the factors that made it difficult to trace the rubber supply chain in its entirety in Indonesia was the large number of intermediaries. As part of a joint project, the mobility supplier Continental AG and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH thus set up a digital traceability system that tracks the flow of goods along the entire supply chain. Furthermore, getting local processing companies on board and engaging in direct marketing with smallholders has created structures that ensure additional transparency. At the same time, smallholders benefit from increased productivity and higher income levels.
INDIA: Environmental and social standards established for electronics goods suppliers
India’s electronics market is experiencing a boom and global demand for Indian electronic goods is increasing. At the same time, the sector does not have enough skilled workers. To make its Indian suppliers more competitive and efficient and its supply chain sustainable, one of the steps taken by the electronics manufacturer Salcomp Manufacturing India Pvt Ltd. – working in collaboration with DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH – involved advising ten of its local suppliers on their quality, environment, health and safety (QEHS) policy. By improving these standards, Salcomp is pioneering a way forward for the entire electronics sector.
MADAGASCAR: Sustainable vanilla and better income opportunities
The German manufacturer of flavours and fragrances Symrise AG and the consumer goods manufacturer Unilever PLC have been collaborating with the NGO Save the Children (STC) on several projects with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH since 2014 in a bid to improve cropping and working conditions along the vanilla supply chain. Smallholder farmers are trained in sustainable growing methods, for example, in order to raise the yield and quality of vanilla and diversify their sources of income. Moreover, some 5,000 families are benefiting from a project-backed health insurance scheme. Further support includes awareness-raising campaigns on health, hygiene, nutrition and child welfare.
BANGLADESH: Improving women’s rights along the textile supply chain
The Swedish textile company Lindex AB joined forces with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH to mainstream gender aspects in its corporate strategy and the HR management of its textile suppliers in Bangladesh. This not only meant working closely with the suppliers themselves but also with industry and employer associations, the local labour and commerce ministries, trade unions and the Alliance for Sustainable Textiles. The guidelines thus produced form part of a toolbox that can be used worldwide. Moreover, a community-led women’s café was set up that gives employees advice on labour law and access to further training.