Throughout my career, I have been a part of more changes to the ICT industry than I could count. Among the most recent, a demand for sustainable supply chain solutions to ensure that companies are getting it right when it comes to doing business ethically. What people might not realise is that we have all the tools we need here in our home of Western Australia (WA) in order to ensure operations are ethical and sustainable. It’s just a case of knowing how to apply them.
WA is considered a geographically challenged state, existing in one of the most isolated countries around the world. Our industries and government have become well practiced at remote operations and monitoring as part of doing business. Satellite data is just one example of how technology can provide companies with the opportunity to increase transparency. The distinguishing factor in remote monitoring is being able to build trust with stakeholders by accurately identifying where and how materials are being sourced. This is especially important for consumers, who are 85 percent more likely to buy from a company with a reputation for sustainability than from a neutral company if prices were equal.
Those that have been around as long as myself would recognise the changing lexicon when it comes to ESG, previously CSR, social license to operate, the triple bottom line and other variations that preceded these. The concept is not unfamiliar to us; but the difference now is that the lens of sustainability has widened, giving more power to stakeholders in their ability and influence to pass judgement and have an opinion—especially when it comes to the sustainable sourcing of materials.
By definition, sustainable sourcing is the integration of social, ethical and environmental performance factors into the process of selecting suppliers. However, in my eyes it is so much more; sustainable sourcing is having an awareness of how a business and the businesses it relies on operate. It comes down to a sense of responsibility and ensuring that the materials used, the services provided and the outputs are all aligned with the values and ethics of the organisation.
According to a report from the McKinsey Institute, more than 90 percent of companies' environmental impact comes from their supply chain. For this reason many large businesses are not only looking at their internal operations - but on a larger scale at their suppliers across the supply chain.
The great news is that NGIS has recently been named one of five global Google Cloud sustainability partners for our work in building our sustainable sourcing solution, TraceMark. In partnership with some of the largest technology providers in the world, we are applying WA talent to manage sustainable sourcing requirements for multinational companies of scale. As an example, one of the world’s largest buyers of palm oil, Unilever, is focussed on playing a role in breaking the link between palm oil and deforestation. The Unilever team in Europe joined forces with Google and experts from NGIS to raise sustainable sourcing standards for suppliers and bring Unilever closer to its goal of a deforestation-free supply chain by 2023. By combining the power of cloud computing with Earth Observation data and artificial intelligence (AI), the companies have built a more holistic view of the forests, water cycles and biodiversity that intersect Unilever’s supply chain.
But we know and understand that sustainability can also extend further than the origin of a product and how it was sourced. Part of good business practice today includes addressing social impact too. Unfortunate events that have unfolded in our WA economy in recent years are a timely reminder of what happens when we don’t manage this risk well. Big industry, resource companies, small businesses and everyone in between have a responsibility when it comes to social and environmental impacts of their operations, for the benefit of everyone. Leveraging the power of spatial data science and Earth observations is a powerful way to monitor these activities.
Whether the issue is mitigating climate change, upholding land rights or practicing sustainable sourcing, now more than ever, companies need to demonstrate and justify their social license to operate. In a competitive market, the risk of a damaged reputation is far greater—shareholders and stakeholders can easily vote with their feet. Luckily, solutions are available locally in WA to help you operate more effectively and manage risks. It is time to take stock of how ‘sustainable’ your business really is.
About the author: Paul Farrell
Paul is the Managing Director of NGIS Australia.