How are Wildfires Disrupting your Supply Chain?

In 2019, there were reportedly 74,155 fires in The Amazon rainforest (supplies 20% of earth oxygen).  This was a year on year in increase of 85% since (2018), according to a Washington Post report.  The UK, Spain, France and Portugal have recently faced unprecedented heatwave causing wildfires across western Europe and disrupting supply chains locally and globally.

These fires are a direct result of climate change. Organisations who enable deforestation for leather and food such as soya and beef are directly contributing to the problem of efficient global supply chains.  One of the most common falsehoods is that “deforestation is only driven by food and packaging supply chains”.  This is simply not true, if we look at it in a broader sense the risk can be found in numerous sectors; rubber, leather and timber just to name a few.

Organisations are starting to take note of the primary and secondary effects these wildfires will have on their supply chains.  CDP have used a questionnaire to discover how many suppliers source from the Amazon.  The data collected in 2019 showed “35% of suppliers responding to CDP’s forests questionnaire are sourcing from one or more of the 9 countries touching the Amazon rainforest.  Of these, just 18% have a commitment to ‘no land clearance by burning or clearcutting”.

Tesco one of the UK’s largest supermarkets have recently been exposed by Greenpeace for claiming their products are ‘zero deforestation’.  Whilst Tesco may not purchase meat from Brazil, much of the chicken and pork produce they sell are fed on Brazilian soya, and produced by companies owned by Amazon rainforest destroyers.

Organisations such as H&M have acted quickly to reduce the risk of leather sourced from the Amazon being included in their supply chain’s and have suspended contracts with sources from Brazil until sustainable assurances are met.

KLP is Norway’s largest pension fund who have over $80B in assets, say that they’ll “divest from transnational commodities traders operating in Brazil such as Archer Daniels Midland (ADM), Bunge and Cargill, if they work with producers who contribute to deforestation”.  KLP are also reaching out to other investors requesting they use financial influences to curb Amazon deforestation.

Vitor Gomes who’s an environmental scientist at the Federal University of Pará in Brazil stated that “According to the results of our studies, even in the best-case scenario, half of Amazonian tree species will be threatened in the future. The trends we’ve seen today could be beyond our worst-case”.

How to mitigate wildfires from your supply chain

Procurement and supply chain managers need to firstly understand the direct links of their supply chains and supply networks to climate change and then devise plans to both mitigate that risk with existing suppliers (especially when alternative supply is limited) and secondly introduce new strategies and suppliers who are not harming the planet. Minimise current impact and shape future supply chains responsibly. We could even go a step further and work partners and suppliers who are seeking to have a positive impact on nature and bio-diversity as opposed to merely be compliant or a do no harm approach.

This requires mapping of supply chain risk, category strategies that include climate change impact assessments, designing requirements which incorporate climate change impact and social value as core requirements and then managing the relevant KPI’s and compliance metrics through the entire procurement cycle.

As procurement professionals we should ensure we have transparency and assurance within our supply chains with independent assessment and pro-actively address areas of environmental and social concerns, such as modern slavery, climate, environment and inequality.

This will require resourcing, expertise, training and allocating resources away from sourcing to supplier and contract management.