Are wildfires destroying your supply chain?

There have been 74,155 fires reported in The Amazon rainforest (supplies 20% of earth oxygen). This is an increase of 85% since last year (2018), according to a Washington Post report. The fires have caused a dramatic spike in carbon monoxide and carbon dioxide emissions over the last 12 months. The emissions which then increase global warming.

These fires aren’t natural and are directly effecting the supply chain while trying to meet increasing demand for various products. 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 fires 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”.

On September 9th, 2019, large organisations such as H&M and VF Corp 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”.

As procurement professionals we should ensure we have transparency and assurance within our supply chains and pro-actively address areas of environmental and social concerns, such as modern slavery. This will require resourcing, expertise, training and allocating resources away from sourcing to supplier and contract management.