Influencing Sustainable Sourcing Decisions in Agri-food Supply Chain
Sustainability standards and initiatives can achieve greater impact by fully engaging those involved at each stage of agri-food production.
This is a challenging process as globally traded agri-food products go through many different phases of production and it is the middle tiers which are the most difficult to track. However, intermediate suppliers offer a great opportunity for sustainable standard organizations and businesses to efficiently reach sustainability goals. This paper sheds light on the largely unrecognized role of intermediaries and discusses various strategy options for corporations to make sustainable sourcing decisions.
As global supply chains continue to make trade relationships more complex, companies are increasingly held accountable for implementing social and environmental good practices. In the agri-food sector especially, use of sustainability standards is growing and moving sustainability beyond its economic aspects to address social and environmental issues. Implementing sustainability standards and initiatives impacts every segment of supply chains; it requires changes in governance structures, creates a need for increased transparency and changes the roles and relationships of many supply chain actors.
Intermediaries in supply chains are those negotiating the vast expanse between these producers, final buyers and retailers of agri-food products. Often referred to as “middle-men,” their role generally gets less attention in the creation and implementation of sustainability standard schemes. However, these intermediaries act as gatekeepers (to markets and market information) and have close business relationships with producers. This puts them in a key position to influence the use and implementation of sustainability standards.
To improve strategies for sustainable production, buyers and sustainable standard organizations should make efforts to interact with intermediate suppliers and view them as sustainable supply chain managers who can use sustainability standards to promote ethical, social and environmental values. This report provides insight into how this can be implemented successfully, and offers examples of companies that have involved intermediaries at various stages.
This paper – based on a review of existing literature and public documents, websites and interviews with traders and companies that have practised sustainable sourcing strategies – is intended as a contribution to ongoing discussions. It proposes that, in order to increase the impact of sustainability initiatives, standards must be complemented by a change in procurement practices. Specifically, firms and sustainable standards organizations can look to incentivize social and environmental sustainability at the intermediate level to enhance sustainability goals. A greater focus on the role of intermediaries in future research could play a large part in successful innovative approaches to sustainability and responsibility in agri-food supply chains.