Related

Chemical safety in the workplace is a critical concern for industries that use or handle hazardous substances, from manufacturing and construction to healthcare and laboratories.

Chemical Safety in the Workplace: Best Practices for Risk Reduction

American Chemistry Council Reports ‘Banner Year’ for Responsible Care Program

DEEP DIVE: The American Chemistry Council Reports ‘Banner Year’ for Responsible Care Program

Leveraging Chemical Data to Drive Sustainability and Ensure Supply Chain Transparency

The CSRD is affecting global chemical supply chains.

How the CSRD Impacts Global Chemical Supply Chains

The global supply chain is one of the most important and complex systems in the modern world. It moves everything from consumer goods to critical industrial material from one end of the globe to the other. It supports economies, fosters innovation, and connects producers, suppliers, and consumers in a rich web of interdependencies upon which almost everyone in the world relies every day.

As consumers become increasingly aware of the potential harms that accompany the global supply chain, including deforestation and greenhouse gas (GHG) emissions, organizations have looked for more sustainable approaches to logistics, in which supply chains produce economic benefit while doing minimal harm to the environment.

However, new research examines how supply chains can move beyond sustainability and minimal harm to become regenerative systems that strengthen and nurture communities and ecosystems. A recent article, which was based on ongoing academic research, questions the traditional assumptions at the foundation of modern supply chains and proposes a new paradigm that could change the way we think about our economic systems.

Problems Begin at the Foundations

The authors first diagnose the three underlying assumptions that support our modern supply chains. “These assumptions,” they say, “have played an important role in making supply chains damaging to communities and ecosystems, rather than regenerative.”

The first assumption is that the primary responsibility of the supply chain is to maximize profit by seeking growth and economies of scale while using natural and social capital as production inputs. The authors use palm oil farming as an example of this approach, in which a single crop is farmed exclusively at each location. “Such efficiency-focused production systems displace natural ecosystems, are devoid of biodiversity, and exacerbate climate change,” the authors write. “They are also fertile ground for human rights abuses and worsening social inequality.”

The second assumption is that authority over the supply chain should come from the top-down mechanisms in which large organizations impose conformity on their suppliers. According to the authors, large firms often lack an understanding of suppliers’ local context, and the imposition of sustainability standards without that understanding could, in fact, cause harm to the local environment.

The third assumption is that maximizing profits requires organizations to adjust sourcing, production, and distribution cycles to ensure they always satisfy consumer demand at the least possible cost.

According to the authors, there are profound social and ecological implications that result from these assumptions. “Supply chains managed according to these assumptions deteriorate natural capital, compromising natural cycles and other ecosystem services that are essential for human survival,” the authors write. This includes creating health and safety hazards for workers and disrupting indigenous socio-cultural relationships with the land. “Social-ecological systems are harmed when supply chains push profit, efficiency, and responsiveness to the extreme and when powerful focal companies demand that supply chain members lower prices and lead times, all while externalizing social and ecological costs.”

What is a Regenerative Supply Chain?

Regenerative supply chains are designed to enhance and benefit from the health of social-ecological systems. According to the authors, they are “interorganizational networks that sense and embrace surrounding living systems, aligning their decision-making and actions to these system’s structures and dynamics, in a way that allows for such systems to gain strength, build resilience, and sustain life.”

The quality of being regenerative is one that must be present along the entire supply chain. A supply chain is not regenerative if it benefits only one part of the supply chain to the detriment of others, or if it benefits nature but harms society.

Regenerative supply chains rely on three principles:

Proportionality dictates that supply chains must adjust the scale and scope of production and consumption to restore a balanced variety of native organisms and species and to align with what the social and ecological systems can tolerate.

Reciprocity requires supply-chain interactions, including those that involve local communities and ecosystems, to be coordinated to benefit multiple human and non-human actors. It refocuses the supply chain away from the quantity of transactions towards the quality of relationships between participants.

Poly-rhythmicity is the principle that a regenerative supply chain must keep multiple rhythms in the social-ecological system in balance simultaneously without interfering with one another.

Table 1 compares the three regenerative principles with the traditional assumptions of supply chain operations.

Table 1: Regenerative Supply Chains vs. Traditional Supply Chains

Sustainable_Supply_Chains_Table

Examples of Regenerative Supply Chains

As the authors point out, regenerative supply chains are, for now, aspirational. However, they see two distinct paths forward: creation and conversion. They also see emergent examples of these principles in some of today’s innovative organizations.

Creation means the intentional design of new supply chains that prioritize reversing ecological harm, supporting local contexts, and contributing to economic growth. Creation is already at work at Inversa, a fashion supply company that sources its leather products from invasive species in the Atlantic Ocean off the coast of Florida. By harvesting material from the invasive lionfish species, which has been devastating local ecosystems over the last 40 years, Inversa produces economically viable and ecologically stable clothing that protects local wildlife.

Conversion requires modifying existing supply chains to become regenerative ones by reframing the priorities and relationships to align with the principles of proportionality, reciprocity, and poly-rhythmicity. Conversion is already at work at Natura & Co., a Brazilian cosmetics company that works with a network of family farms to provide raw materials such as nuts and fruits for its products. The company considers its integrated supply chain as a living organism with dynamic, locally specific relationships, in which every agent in the supply chain works together to support their livelihoods and the ecosystem in which they live.

While the world might be a long way from establishing truly regenerative supply chains as a universal principle, the research into what is possible provides exciting avenues for continued innovation and experimentation.

——

Editor’s Note: 3E is expanding news coverage to provide customers with insights into topics that enable a safer, more sustainable world by protecting people, safeguarding products, and helping businesses grow. Deep Dive articles, produced by reporters, feature interviews with subject matter experts and influencers as well as exclusive analysis provided by 3E researchers and consultants.