Dive Brief:
- A recent study revealed that 24% of multinational companies depend on revenues linked to deforestation: palm oil, soy production, cattle products, and timber, for a cumulative total of $906 billion, Forbes reported Monday.
- The companies cited include Cargill, Kraft Heinz Company, Starbucks and Marks & Spencer, and global commodity traders Archer Daniels Midland and Bunge.
- Though reports present the current level of deforestation as unsustainable, boardroom regulars routinely look the other way, preferring to accrue profits now at the risk of future environmental and economic losses.
Dive Insight:
With transparency within the supply chain promised again and again, it seems that many larger corporations and multinationals are simply unable to manage their own sources.
While it's certainly possible that some companies are immune to concerns about sustainability and human rights abuses, what's more likely is that efforts to examine their countless suppliers is insufficient. A recent DHL white paper shows 32% of 350 managers surveyed manage more than 10 distinct supply chains. Even if a company is fully aware of all actors in each tier of their supply chain, auditing each supplier can seem near impossible.
As a result, companies such as Colgate, Unilever and Nestle mislead the public by promising sustainable sourcing when in fact, no positive environmental practices are in place.It's been said before that closer examination is the key to fair practices and transparency, while active leadership is a baseline requirement for success.
Yet, as reports of violations continue to emerge, few companies express disapproval to the point of cutting a supplier altogether — in strict economic terms, the benefits of cutting a key supplier due to moral infringements rarely outweigh the costs. Lacking the corporate leadership and teeth to enforce sustainability policies, suppliers are unlikely to feel pressure to change.
