By Ian Lifshitz, vp-Sustainability & Stakeholder Relations, The Americas, Asia Pulp & Paper
What do brands like Nutella, Walmart and Disney have in common? All of these companies have needed to re-evaluate their supply-chain management when their sustainability efforts were questioned on a global scale. Sustainability is a necessity – not a trend – and the way companies communicate their environmentally friendly efforts are changing the way converters play into the process.
Today, businesses can no longer have an “out of sight, out of mind” approach to sustainability within their supply chains. Whether all operations occur under the same corporate umbrella or companies use multiple vendors or converters to manufacture a product or its packaging, each phase of the production process must adhere to the same sustainability values to secure the company’s reputation – and its sales.
Of course, sustainability practices are not “one size fits all.” For example, we introduced our Forest Conservation Policy (FCP) in February 2013, which ended all natural-forest clearance throughout our company’s supply chain and committed to supporting the protection and restoration of forests in Indonesia. Complex and extensive initiatives like this require patience, diligence, transparency and collaboration. When all members of the production process are engaged in the development of sustainable practices, everyone – including converters – can see the importance of their individual role.
Converters can be the strategic gatekeepers of sustainability needed to bridge the gap between their product-manufacturer customers and end-use consumers. Supply chains need a two-way communication path, as opposed to a traditional top-down approach (see Figure 1).
FIGURE 1. Traditional supply chains typically allow only one-way communication.
The converting cornerstone
Converters are the cornerstone of the supply chain. They take in feedback from manufacturers developing new products and consumers demanding new functionality. Aside from product development, converters also are the gatekeepers of information about issues related to corporate social responsibility and sustainability (see Figure 2). With common issues such as wastewater, fiber sourcing, chemical use and emissions, large organizations are recognizing the need to address sustainability challenges as a united front – treating converting as an integral aspect of the process – and one that does not occur behind closed doors.
FIGURE 2. Overlapping circles of the environmental, as well as social and economic, responsibility areas are where converters can serve in the gatekeeper role.
The complexities of these topics require clear and honest communications up and down the supply chain. When converters are limited in their capacity to respond to complex issues, they fail to stop problems that other sections of the supply chain may be completely unaware of.
The triple-task approach of transparency, trust and traceability is a key method for how converters can establish or build on existing sustainable supply chains.
1. Transparency is key
Supply-chain transparency directly impacts consumer trust and a brand’s sustainability performance. If third-party converters are being engaged to take a product across the finish line, sustainability policies – and the way these policies are communicated – must bridge the gap.
Transparency also can help weather storms during times of crisis. Companies without a history of open and honest communication face a greater risk of claims the organization was hiding its transgressions. Meanwhile, organizations demonstrating good transparency may be granted a greater level of trust and more room for forgiveness in times of crisis.
Engaging a third party to act as a partner to provide an oversight of a company’s top-to-bottom sustainability efforts authenticates an organization’s sustainability claims and also can help unveil potential risks in the supply chain before problems occur.
2. Trust at the point of sale
According to data from Unilever , one out of three consumers globally are choosing to buy from brands they believe are doing social or environmental good. Additionally, this firm’s 2017 Paper & Packaging Consumer Trends Report found that more than half of consumers consider sustainability in the products they buy as more important to them today than it was five years ago – a trend that is only expected to grow. An incident that damages this trust, such as the discovery of non-regulatory practices at the point of converting, can be catastrophic to a company’s relationship with consumers. The inability to provide clear information regarding the supply chain’s integrity could harm the perception of a brand in ways that can take years to rebuild.
Community engagement practices and grievance protocol and procedures are effective tools that can be implemented across the production line to build trust within the company and outside factory walls. In particular, converters are in the unique position to create partnerships with industry associations, NGOs and other independent organizations to further enable suppliers to fulfil their sustainability commitments and demonstrate trustworthiness to their consumers.
3. Traceability leads to accountability
Mistakes and oversights still will happen, even with a robust sustainability policy in place. Proactive action to address any issues before an outside party intervenes reinforces the company’s commitment to maintaining a strong regulatory framework. To establish this accountability, the converters’ role in the company’s overarching sustainability policy must be clearly outlined, with every step of the production line traceable to quickly identify problem sources. Showing chain-of custody certifications no longer is enough. Converting industry professionals can help brands develop practical and realistic procurement policies by staying close to their own upstream and downstream suppliers.
This is evident when thinking about the conversion of virgin paper fiber to food-contact packaging. Converters understand the process of developing food-packaging paper stock better than anyone in the supply chain, and they have the responsibility to educate manufacturers, distributors and consumers alike on the complicated sustainability challenges. Because many food-packaging items require a polyethylene (PE)-barrier polymer coating, recycling these items can become a challenge. Often, these products will end up in the incinerator or landfills because the process of removing the barrier coating requires more resources, more energy and dedicated facilities employed to attempt separating paper from polymer. New innovations are changing the way we think about food-contact paper, including the introduction of biodegradable options that, instead of requiring complicated separation processes at recycling plants, break down naturally over the course of time.
As gatekeepers, converters can provide strategic recommendations for developing these products to maximize sustainable efforts on behalf of the overall supply chain and provide more eco-friendly options to their end user and ultimately, the consumer. And, by engaging with brands and core suppliers proactively, converters play a crucial role in achieving sustainability goals (see Figure 3).
FIGURE 3. Converters can play a crucial role in helping produce a myriad of paper products through sustainable supply-chain management.
To foster a relationship that is beneficial for business and the environment, converters should strive to be clear beyond compliance, working with their manufacturers and distributors to further promote a brand’s sustainable reputation. Converters can develop robust supply chains capable of withstanding unforeseen environmental, social and political challenges, while also developing innovating products to further promote sustainability.
Ian Lifshitz, vp-Sustainability & Stakeholder Relations, the Americas for the Asia Pulp & Paper Group, manages an international team leading the company’s sustainability, media relations and stakeholder engagement programs across Canada, the United States and South America. He has more than 20 years of experience developing sustainability, public relations and other stakeholder strategies for international companies, governments and nonprofits, including expertise in managing issues and crisis communication strategies for companies in the pulp and paper, packaging and retail sectors. Lifshitz can be reached at 905-450-2100, ext. 297; fax: 905-450-9906, email: email@example.com, https://www.asiapulppaper.com/.