With nearly 30 000 suppliers globally, Stora Enso works in diverse environments where supply chains can sometimes involve sustainability challenges. We have a rigorous sourcing process in place, and 90% of our supplier spend is covered by our Supplier Code of Conduct. Our collaboration with the non-profit BSR is pushing us to do even better in ensuring sustainability.
BSR is an international non-profit organisation that works with companies, government agencies, and NGOs to make global business more sustainable. As networks of thousands of companies, supply chains offer immense business opportunities ¬ but they can also be challenging to control.
“You can’t manage what you can’t measure, but measuring supply chains can be difficult,” says Tara Norton, Director of Supply Chain Sustainability at BSR. “To gain control, companies need to have focus: understand where the in the supply chain the risks are, prioritise them, know which processes to put in place, and which partners to work with. BSR supports companies to develop their approach in this way.”
Carrots and sticks for suppliers
Global companies face various challenges along their supply chains, including long-standing environmental and human rights issues. Stora Enso’s investment Bulleh Shah Packaging, for example, is combatting child labour in Pakistan.
Working with suppliers who are not familiar with all the different aspects of sustainability – environmental, social, and economic – can be challenging. It is important for companies to clearly set out their requirements and ensure that suppliers know their performance will be monitored. In 2015, Stora Enso achieved a 90% Supplier Code of Conduct coverage of supplier spend, and in 2016 the scope will also include wood supply. The Supplier Code of Conduct is a binding legal document all our suppliers and contractors must commit to adhere. But successful programmes are also about engagement both carrots and sticks are needed.
“Suppliers want to know what’s in it for them,” Tara Norton explains. “This requires dialogue. When purchasers understand the challenges suppliers face and know how to address them together, they are able to work in a more collaborative way, and suppliers develop more confidence about the actions they need to take . At the same time, suppliers need to understand that not responding to sustainability requirements might mean losing business opportunities.”
As a raw materials company, Stora Enso is relatively close to its suppliers. “This gives Stora Enso a great opportunity to engage with suppliers, and to be a good partner to customers who might not have the same connection,” Ms. Norton adds. “Stora Enso is doing good work assessing, auditing, and engaging with its suppliers. The next step is to see how you can use those findings to really drive change.”
Creating sustainable supply chains
A sustainable supply chain is inclusive, allowing people to benefit through employment, business opportunities, health and wellbeing, or in other ways. Sourcing networks should also be environmentally responsible, climate resilient, and perhaps most importantly, transparent, enabling areas for improvement to be identified.
“Stora Enso’s sourcing department has people who care about and understand these issues, and sustainability is well integrated in the sourcing process,” Tara Norton says. “There is a will to put in place processes that lead to change.”
While there is more work to be done, both at Stora Enso and globally, 2015 as “the year of agreement” has brought hope:
“The UN Sustainable Development Goals and the global agreement reached in Paris have given business and government a clear mandate to address the serious social and environmental challenges that we face,” Ms. Norton says. “Now we need 2016 to be the year of global action.”