2. Unchaining Value
Corporate responsibility through the value chain

3. Background and objectives Describing global value chains
Unchaining Value Corporate responsibility through the value chain Workshop 31 October 2007
Background and objectives
Describing global value chains
ICT sector overview and key challenges
Food and beverage sector overview and key challenges
Issues in common
Small group discussions
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

4. Unchaining Value Corporate responsibility through the value chain Background and objectives
To understand challenges explore best practice
To understand capacity building within suppliers to address environmental and social issues in the supply chain
To explore scope for a multi-sector initiative on sustainable supply chains
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

5. Unchaining Value Corporate responsibility through the value chain Background and objectives
Fit with existing UNEP initiatives
Partnership with UNGC
Cross-sector or multi-sector?
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

6. Unchaining Value Corporate responsibility through the value chain Interviews and research
ICT
OEMs/operators: Nokia, O2, Deutsche Telekom, HP, Panasonic
Contract Manufacturers: Delta Electronics*
Academia: Wuppertal Institute, Öko- Institute, Yale University
Networks/Consultants: GRI, BSR, Verité, sustainabilityagents
NGOs: Good Electronics, ASK, TEAN
Unions: Unite the Union
Food
Manufacturers: SAB Miller, Unilever
Retailers: Carrefour, Marks & Spencer
Fast food: McDonald’s, Starbucks
Consultants: McKinsey
Multistakeholder initiatives & certifications: Business Social Compliance Initiative Food Module, Common Code for the Coffee Community, Fairtrade UK, Rainforest Alliance, SAI Platform, World Cocoa Foundation
NGOs/Think Tanks: Food Ethics Council, International Institute for Environment & Development, Oxfam
*agreed to participate, results still outstanding
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

7. Potential Re-Use or Recycle Transport & Distribution
Unchaining Value Corporate responsibility through the value chain Describing global value chains
Tier 2+ suppliers
R&D
Outsourcing
Upstream Suppliers
Raw Materials
Refinement
Suppliers
Manufac-turing
Outsourcing
Testing
Suppliers
Potential Re-Use or Recycle
End Consumer
Retail Customer
Transport & Distribution
Packaging
Outsourcing
Outsourcing
Information Management
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

8. Unchaining Value Corporate responsibility through the value chain ICT sector overview and key challenges
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

9. Unchaining Value Corporate responsibility through the value chain ICT sector overview and key challenges
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

10. Unchaining Value Corporate responsibility through the value chain ICT sector overview and key challenges
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

11. ICT sector characteristics:
Unchaining Value Corporate responsibility through the value chain ICT sector overview and key challenges
ICT sector characteristics:
OEMs aim for strategic long-term partnerships with suppliers of high-end components and products
Impacts (environmental/social; across sourcing, manufacturing, use, disposal) often determined in the design phase
Performance affected by infrastructure, education, incentives, culture, ability to reach out to workers, available technology, etc.
Overall price pressure, outsourcing and offshoring
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

12. Unchaining Value Corporate responsibility through the value chain ICT sector overview and key challenges
ICT sector responses:
Industry-wide efforts to set minimum standards and facilitate uptake among suppliers, notably Electronic Industries Code of Conduct (EICC) and the Global e-Sustainability Initiative (GeSI)
Minimal uptake among contract manufacturers
Interest in product labelling, though no significant activity
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

13. Unchaining Value Corporate responsibility through the value chain Food sector overview and key challenges
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

14. Unchaining Value Corporate responsibility through the value chain Food sector overview and key challenges
Breeder
Producer
Middlemen
/ Market
Middlemen / Market
Slaughterers
Distributors / Market
Processors
Restaurants
Supermarkets
Wet market
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

15. Food sector characteristics:
Unchaining Value Corporate responsibility through the value chain Food sector overview and key challenges
Food sector characteristics:
Wide range of growers, from huge agri-business to smallholders, family and community farms
Supply and distribution across processors, manufacturers, distributors, retailers, middlemen
Size and volatility of world commodity markets
Increasing demands for traceability
Variability of supply and demand
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

16. Food sector responses:
Unchaining Value Corporate responsibility through the value chain Food sector overview and key challenges
Food sector responses:
Commodity-specific, e.g. coffee, soya, palm oil
Monitoring focused on raising performance, not compliance
Broad commitments that leverage corporate distribution and buying power via business-NGO partnerships
Focus on benefits to suppliers, beyond cost savings and efficiency
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

17. Unchaining Value Corporate responsibility through the value chain Food sector overview and key challenges
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

18. Unchaining Value Corporate responsibility through the value chain Issues in common
Role of consumers: how important?
Product labelling may present important opportunities
The business case for suppliers is critical
Collective action, partnering and free riders
Burden of review and documentation
Challenges in partnering upstream and downstream, e.g. planning, processing of information, coordination, training
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

19. Unchaining Value Corporate responsibility through the value chain Three-stage model:
Drivers
Actions
Phase 1: Comply
Risk management: Product safety, regulatory compliance, reputation
Business value: Short-term viability, reliability and quality of supply
Heavy focus on supplier standards
Cost minimisation and ‘policing’ approach to auditing
Phase 2: Compete
Business value: cost savings (e.g. energy or material use reduction); improved productivity; strengthened demand from customers or consumers
Capacity-building e.g. Training programs, technical assistance
Supplier engagement in developing standards and approaches
Guidelines and learning
Philanthropy
Phase 3: Lead
Business value: New market creation; brand enhancement; long-term viability of supply; premium quality supply
Creating value and innovation, e.g. developing livelihoods; shaping demand and loyalty
Innovative partnerships / chain networks
Multistakeholder collaboration to raise the level of the entire industry
Institutional capacity building
Efforts to measure outcomes (rather than inputs)
Background
Value chains
ICT sector
F&B sector
Issues
Small groups

20. Unchaining Value Corporate responsibility through the value chain Small group discussions
Part one: Major challenges within sectors; solutions needed; moving through the three phases
Lunch break
Part two: Highlighting good practices; evaluating success; scope for multistakeholder initiatives
Background
Value chains
ICT sector
F&B sector
Issues
Small groups