Weak Rules Hindering Green Food Supply Chain
Weak Rules Hindering Green Food Supply Chain
Geneva: A new report from the World Economic Forum has pinpointed critical failures in the global food supply chain that prevent the achievement of sustainability. With an overall value of $9 trillion for the food sector, this industry is not only integral to the world's economy but extremely harmful to the climate regarding the emissions it sends into the atmosphere. The report provides a critical analysis of the complexities involved in decarbonizing food supply chains and the strategies to overcome them.
Complexities of Global Food Supply Chains
The food supply chain is notoriously long, extending to many actors within the value chain from production all the way through to consumption. It presents a complex network with both upstream, midstream, and downstream players participating in the transformation of raw materials into finished goods and ultimately delivering them to consumers. Indeed, these supply chains have been made more complex by the increasing trend in global sourcing and outsourcing, creating both cooperative and competitive relations between firms.
The WEF report identifies one of the critical challenges as being that of integrating sustainability in the operations of many food companies. More often than not, it is aggravated by the perception that sustainability initiatives may not align very well with the financial interest of food companies. A resultant challenge for many firms is therefore to implement sustainable practices, especially within the context of multi-tiered supply networks characterized by many supply and demand links, reverse logistics, and multiple stakeholders.
How to Manage Scope 3 Emissions: One of the pressing challenges of sustainability that the food industry currently faces is the management of scope 3 emissions. Associated emissions from upstream and downstream supply chain activities comprise a larger share in the overall carbon footprint of the industry. According to the report, second-tier, third-tier, and fourth-tier suppliers are businesses that have activities in nations where, in most cases, regulatory regimes are not as strict on environmental grounds. Since these suppliers lack transparency and influence, it's hard for lead firms to be sustainable.
Other reasons that hamper sustainability practice in the supply chain of food are also remarked upon in the report. These reach beyond first-tier suppliers, a general lack of trust amongst actors in supply chains, and the inherent complexity of managing inter-firm relations. Next, power imbalances, particularly those in favor of large retail buyers, are easily prone to undermine efforts aiming at promoting sustainability. Seasonality, variability in quality and quantity, and constraints on the shelf-life of food products are increasing this complexity.
Broader Challenges in the Food Supply Chain
Beyond emissions management, the WEF report points to a raft of other pressing challenges challenging the global food supply chain. These range from food shortages and pre- and post-harvest losses to unsustainable land-water-energy use, food waste, food fraud, climate change, forced labor, and unethical trading practices. The report underlines the fact that multiplicity and interconnectivity are intrinsic parts of multi-tier food supply chains, which create multiple potential points of failure for sustainability initiatives.
Five Key Strategies to Enhance Sustainability
The report identifies major failures, but the WEF also gives a way forward to enhance sustainability in the global food supply chain. Five key strategies are recommended:
Multi-tier collaboration and partnership: The collaboration across all tiers of the supply chain enables sharing of ideas and collaborative effort to sustainability challenges. This may mean mutual agreements in terms of sustainability goals and developing shared strategies to deal with them.
Diffusion of Sustainable Innovation Along the Food Chain: Innovation in different forms is called for at each stage, from the production of raw materials to the supply of the final product in food. Innovations that improve food quality, reduce livestock emissions, enhance soil management, and promote sustainable farming practices are essential in attaining sustainability.
Supply Chain Mapping: One should try to get a very comprehensive mapping for the same to locate impacts on sustainability at each stage. Comprehending the challenges each actor is facing and how efforts should be prioritized to enhance overall sustainability is important.
Sustainability Performance Measurement: Codes of conduct, followed by measuring the sustainability performance of various supply chain activities related to food production and labor conditions at periodic intervals, provide progress toward set goals in sustainability.
Capacity Building on Sustainability: Behavioral change with huge implications for the supply network can be created through the development of some training programs or capacity-building initiatives that take into consideration the dimensions from the triple bottom line of sustainability.
Conclusion
The WEF report categorically suggests that bringing about sustainability in the global food supply chain is not going to be easy. However, collaborative efforts, innovation, strategic planning, and a focus on capacity building can do so towards a far more sustainable food system. As the global food industry grows, such strategies are significant for shrinking its environmental footprint, hence assuring a sustainable future for the planet.
Source: World Economic Forum Report on Global Food Supply Chain Sustainability.