Sustainability Report: Outperforming Through Transparency and Traceability

By Peter Graham and Gabriel Thoumi

September 2018

This paper explores the next natural step for consumer goods companies adopting traceability through the supply chain: full transparency for stakeholders, suppliers and consumers. We examine examples of risk mitigation, opportunities for value creation, and distributed ledger technology (DLT) solutions that are already in use. Download the pdf: Climate Advisers Whitepaper September 2018.

MAIN DRIVERS

Creating visibility across the chain for company stakeholders, regulators, and the end consumer will open opportunities based on:

Climate Risk

External stakeholders are increasingly concerned due to the lack of information around climate risk. Traceability and transparency IT solutions can prevent surprises in the supply chain, leading to predictable revenue and earnings, and improved forecasting and budgeting.

Food Safety

The financial impact of a recall in the U.S. can be substantial: 52 percent of all recalls cost more than $10M, and 23 percent cost over $30M, according to the Grocery Manufacturers Association. Transparency and traceability can play a critical role in containing the damage.

Access to capital

From a lending and investment perspective, the notion of traceability and transparency will grow in importance alongside the burgeoning field of supply chain finance and investors’ commitment to support the Sustainable Development Goals and Paris Agreement.

Brand loyalty

Brand loyalty can be established with open communication about sourcing. A recent study by Unilever found that 33 percent of consumers are now choosing to buy from brands they believe are doing social or environmental good, and 21 percent said they would actively choose brands if they made their sustainability credentials clearer. The trends represent a potential untapped opportunity of €966 billion ($1.3 trillion) out of a €2.5 trillion ($3.2 trillion) total market for sustainable goods.

TAKEAWAY

Consumer goods companies have an opportunity to stay attuned to their market, achieve significant efficiencies, and enhance relationships from the first link of the supply chain to the Point of Sale and beyond.