Consumers driving demand for greater business transparency

19 May 2015

Consumers driving demand for greater business transparency, says Sustainable Business Council

A number of New Zealand businesses are looking at innovative ways to reduce their social and environmental impact and save money as they develop a better understanding of their value chain, says the Sustainable Business Council.

The Sustainable Business Council (SBC) is launching an online guide this week to help businesses map and manage their value chains, which it says has been driven by the consumer need for greater transparency.

“What we’re seeing is businesses are now regularly being held to account for their impact across the entire value chain – whether that’s in a supplier’s factory in a foreign country or how the product is disposed of once it has been used,” said SBC Executive Director, Penny Nelson.

“Some of the world’s biggest global brands want to be sure that their suppliers aren’t going to become a reputational risk for them. There’s a growing expectation that New Zealand businesses that are part of that global supply chain have a good understanding of their own risks and opportunities, and are acting on these.

“Our member companies - both large and small - who have worked through their value chains are seeing benefits; making them more resilient and in a number of cases identifying significant business opportunities.

“Businesses are more prepared and able to manage risks when they have a good understanding of what these risks are. The businesses that have already used the SBC Value Chain Guide have shown there are benefits to both reputation and to their bottom line from having a clearer picture of what is going on throughout the value chain.”

Wellington Zoo – feeding the animals
Wellington Zoo explored its animal feed value chain to understand more about this important part of its operation. It looked at all animal feed, focussing in on the food it uses for primates and also its supply of lucerne, which is used to feed a number of grazing animals at the Zoo.

"For both feeds the process was extremely useful in helping us get a better understanding of our value chain," said Karen Fifield, Chief Executive of Wellington Zoo Trust.

"It made us realise the risks and opportunities that we hadn't considered before. For both products we did not appreciate how dependent we were on one part of the system running smoothly."

Wellington Zoo has identified ways to make improvements and is putting those into action. It has already saved $40,000 per annum by changing the way it sources its animal feed and giving it more confidence in its supply.
Toyota New Zealand – managing energy challenges
Toyota New Zealand has explored its energy use using the new SBC Value Chain Guide. Toyota New Zealand Chief Executive, Alistair Davis said: “It’s opening our eyes across the whole range of energy we use.”

“By mapping our value chain we were able to quickly identify opportunities to be more efficient. As a result we are looking at how we can work with fuel suppliers to help them manage risks around fuel supply for our customers. We’re also looking at how we can schedule the delivery of car parts around the country in a way that’s more resource efficient.”

“What we’ve found is that we are quite exposed to road transport. We use a lot of trucks to ship our cars and car parts around the country. We’re now looking at alternatives such as making better use of coastal shipping and rail. It’s helped us identify ways we can reduce risks.”

New Zealand Post – rags to riches for uniforms
Four years ago New Zealand Post became aware of the impact of its value chain when it found that approximately 8,000 New Zealand Post corporate uniforms could be ending up as rags each year. Realising that this is a scenario for many businesses that use a uniform they worked with EarthLink, Booker Spalding and Massey University’s fashion and textile design students to set up a pilot project where old uniforms now have their logos removed and the material is turned into new clothes for children and women's fashion.

Working through its value chain has helped New Zealand Post clarify the risks and opportunities for creating a market supply/demand business model for the used material. In the future, it expects this to lead to a number of changes in the way its uniforms are designed, used and recycled. The exercise has helped New Zealand Post prioritise activities that will make sure the project is a sustainable and scalable social enterprise in the long term.

ENDS

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