Reinforcing the links in the value chain


The most highly attended workshop in the 2008 Ethos International Conference - “Mechanisms to Implement Corporate Social Responsibility in the Value Chain” – showed the participants’ effort to find solutions to implement practices including all stakeholders. Interested in taking back to their companies the experience they had in the workshop, they left the Anhembi Convention Center with the same energy that characterized the conference: the certainty that the society is increasingly willing to give their contribution to the construction of socially more equitable and ecologically more sustainable Brazil.

The group work was based on the successful experience of the Tear Program – Weaving Sustainable Networks, promoted by the Ethos Institute and the Inter-American Development Bank’s Multilateral Investment Fund (IDB/MIF). Besides the methodology, the workshop shared Tear’s goals, which are increasing competitiveness and sustainability of small and medium-sized enterprises (SME), enhancing their market opportunities and contributing to the country’s development.

The workshop was divided into two sections. In the morning section, after the contextualization of the value chain, the participants were asked to bring this concept to 2008 and also expand the meaning of value, integrating economic, social and environmental aspects. They also considered the importance of alternating the concepts of linearity and circularity: figuring out situations in which “picking-doing-discarding” can be replaced with “borrowing-using-giving back”.

As evidence that the consumer is more politicized in their role of society change agent, a voluntary initiative of readers of a large Brazilian newspaper was cited. The company started receiving back the plastic bag that covered the newspaper copies distributed to appropriately dispose of this environmental liability. Uncomfortable with keeping so many plastic bags at home, some subscribers started collecting them to give back to the delivery man at the end of the month.

Gathered in groups, the participants chose the following themes to discuss in the afternoon section:

1) product life cycle / reverse logistics;

2) decent work (work conditions, child labor, forced labor, and freedom of association);

3) ethics, transparency and values in business relations / consistency between speech and practice / anti-corruption practices;

4) environmental impact management (emission, waste, disposal, impact on biodiversity and on forests, and agribusiness);

5) social inclusion / base of the pyramid / income distribution;

6) education / diffusion of value chain sustainability / technology transfer;

7) social impact management (outsourcing and sexual exploitation of children);

8) fair price / balance between all links of the chain / incentives to sustainable products.

 

The catching fair trade

Before gathering in tables to further discuss each of the eight themes, the groups attended a lecture by Beat Grüninger, one of the men responsible for the implementation of fair trade in Brazil. He showed how it is possible to include small producers in the export route, bringing economic gains for all.

Grüninger showed all paths followed and constraints faced by Brazilian coffee Bom Dia, produced by cooperatives and associations of small farmers, before reaching the shelves of Wal-Mart stores, in the United States. “Coffee is the second main commodity in the world, after oil. The greatest challenge was to ensure a minimum price for these small farmers, who can’t cope with low prices in crisis situations,” he explained.

This vulnerability to market fluctuations was overcome by setting a minimum fixed price that allows coverage of production costs, besides an extra amount to cover other business costs.

Thanks to the fair trade principles, which have also benefited the export of Brazilian orange juice, 10 thousand coffee growers worldwide, especially those from Peru and Mexico, are present in 40 thousand points of sale in the United States, the largest fair trade market.

Grüninger stresses the “high criteria” guiding fair trade, responsible for training marginalized communities in sustainable management. “Ten years ago, when we started operating in Brazil, growers had only a crude warehouse and a scale. Currently, the cooperative has its own headquarters, and the growers’ children are attending college,” he says.

Taking responsibilities

For each of the themes, the groups of participants proposed specific actions that can be enhanced either by public policy or simple, readily implementable measures.

The group that discussed social inclusion, for instance, suggested that companies set a minimum number of small suppliers for them to hire, and that they also help these suppliers to organize themselves into cooperatives and associations. The group that discussed fair price had the idea of creating a sectoral supplier database to which the companies could refer, knowing that, in the qualifying phase, they complied with environmental parameters. Another welcomed proposal was creating financial awards to the purchasing staff – since purchasing is one of the areas that faces the most pressure from the company – , for choosing more “sustainable” suppliers.

The group that discussed decent work suggested the creation of a “blacklist” reporting inappropriate labor practices, similar to an existing list of companies that use labor similar to slavery.

All groups reported the clear need to invest in specific, amplified educational actions to inform and raise awareness of value chain stakeholders about the problems they create or need to tackle.

This awareness-raising campaign was the solution proposed by the group that discussed social impact management. Its reporter, Leonardo Andrade, social responsibility analyst for Ceva Logistics, said the workshop coincides with what he considers to be critical “for organic, strong growth” of corporate social responsibility. “My company employs 20 truckers and is served by 200 outsourced ones. We know that truckers are the main users of teenage prostitution. I’m sure only an educational action can reduce this exploitation,” he explains.

Patrícia Guimarães, staff member of Banco do Estado de Santa Catarina’s management director’s office, was concerned about the impact caused by outsourced service providers hired by the bank, a mixed capital bank ruled by the same laws that regulate the state-owned companies. “We’re still obliged to hire the supplier with the lowest price. Act no. 8.666 – of bids – imposes these constraints on us. We can only require that the supplier does not have forced work and does not employ children,” she explains. She left the workshop with the conviction that every company has a huge responsibility for each link of its value chain.

The proposals and suggestions presented in this workshop will be available for reference on the Ethos Institute website, and will be put forward for discussion by Ethos’ associates in other states as of August.

Source: Ethos Institute

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