3 telltale signs you're shifting the supply chain
One of my favorite things is to sit on a rock and listen to the sounds of a forest, knowing that someone else might do the same thing in the same place 100 years from now. While this is a viable scenario in Canada's largely protected Great Bear Rainforest, we remain a long way from making this a reality in many endangered forests around the world.
Carbon- and species-rich landscapes such as Indonesia's Leuser Ecosystem, the Amazon Rainforest and North America's Boreal forests are threatened by compounding industrial pressures, including logging to provide the fiber for paper, packaging and wood-based fabrics such as rayon. But as sustainability initiatives pick up speed, there's hope for these landscapes.
As much as I relish the quiet (or raucous, depending on the ecosystem) morning chorus of the forest, I run the busy environmental not-for-profit Canopy that I founded 18 years ago. So, rather than soaking up the early morning ambience of the forest, my mornings focus on what it takes to create lasting sustainability and supply chain legacies and how to tell if we're tracking towards achieving them. Our experience includes supporting 750 brand partners to drive environmental policies and sector-transforming projects, such as greening the Harry Potter book series.
After launching three years ago, CanopyStyle is described by brands such as H&M as the fastest moving environmental initiative in the fashion sector. Viscose production consumes 140 million trees each year and is slated to double within the decade. Given the inflection point of viscose production, motivation has been high to eliminate fiber from ancient and endangered forests from this supply chain before it becomes a more entrenched problem.
Regardless of the industry or supply chain that your work involves, Canopy's experience with the fashion industry illustrates these three key indicators to assess whether your sustainability initiative is making real headway.
1. Collective action means strength in numbers and focus
The CanopyStyle initiative contains 105 brands that have committed to eliminate ancient and endangered forest fiber from their supply chain. Representing a wide range of the industry and $130 billion in collective revenues, these brands wield significant purchasing muscle and supply chain influence. Momentum continues to grow along with the number of companies involved and their geographical reach.
Core to the success of such sector-wide sustainability initiatives is a clear, consistent message from major customers to their suppliers. That message is most effective to catalyzing change when multiple customer companies:
Are aligned on the goal and desired outcomes they want.
Understand that their request to suppliers is amplified by others in their sector.
Are willing to collaborate with peers and competitors for a common cause.
This strong, recent wood-derived policy message is reflective of the other 100 brands involved in CanopyStyle: "Gap Inc. is against the use of ancient and endangered, high carbon value forest areas to make cellulose-based textiles, including but not limited to rayon, viscose, lyocell, and modal."
A clear message such as this, amplified by 100 other major business customers, is not ignored by suppliers.
Although CanopyStyle began with only a few fashion leaders, the initiative had to go global, as it is key to transforming supply chains that are global in their sourcing and production structure. A small yet significant group led the charge — starting with strong European representation collectively setting the bar for engaging their suppliers.
By the first half of this year, a surge of American retailers rallied to the cause with additions of big retailers such as the Gap (and its five iconic brands) and the largest U.S. apparel conglomerate, VF Corporation (including the North Face, Timberland and Vans).
That moved U.S. apparel companies from 5 percent to 25 percent of the overall revenue tally of CanopyStyle brands.
As for the marketplace communicating expectations: Having a deadline is a consistent feature of effective change management. CanopyStyle brands publicly committed in their policies to a three-year timeline to eliminate the use of wood-derived fabrics made of fiber from ancient and endangered forest areas. An ambitious timeline spurs action, creativity and successes.
2. Suppliers respond with proof of action
The business adage that "the customer is always right" holds true across supply chains. In CanopyStyle, brands' requests have not gone unanswered. Many viscose suppliers have been responsive to their customers, with some among the early adopters to take action.
In just three years, viscose producers representing 75 percent of global viscose-rayon production have committed to eliminate their use of endangered forests from their supply. Encouraging, right? But as many a failed sustainability initiative will show, translating words into action is where real change happens.
In response to the requirement by leading brands that their suppliers complete formal reviews of their fiber sources, the world's two largest rayon-viscose producers, Lenzing and Aditya Birla, completed rigorous third-party supply chain audits this spring. These CanopyStyle audits are enabling brands such as Levi's, Stella McCartney, Eileen Fisher and Zara to assess the risk of their fabrics originating from controversial sources. At the present time, 42 months after the campaign's launch, 25 percent of global viscose supply is verified as low risk. We are gaining ground, but we are not out of the (endangered) woods yet.
To protect our planet's forest landscapes of hope — or institutionalize any sustainability initiative — we need to secure a critical mass of suppliers shifting their practices and fiber sourcing. In the viscose supply chain, four more producers are undergoing audits and additional actions are being taken by suppliers to help conserve forests and invest in the development of alternatives.
3. Innovators invest in solutions
Innovation is more than a buzzword. It's a survival strategy for a business wanting to stay relevant to customers and competitive in supply chains.
Canopy has worked for 15 years to alleviate the stress on forests by creating a market for papers made from agricultural residues that otherwise would be burnt or landfilled. Conventional supply chain players responded mainly with denial and resistance — reactionary stages that often accompany major transitions. However, a handful of innovators emerged and led the way to pioneer new pulping technologies that will revolutionize the environmental impacts of the paper supply chain in North America. One of these straw pulp mills recently broke ground in Washington state, paving the way for other ventures to begin commercial-scale production of straw paper and packaging.
A key signpost on the pathway of a sustainability initiative taking hold is when innovators, investors and conventional players in the supply chain step in to accelerate disruptive solutions. The fashion sector is fast-tracking this element as brands engage suppliers to ensure alternative fibers are being tested, piloted and incorporated into their products. Canopy is working with designers and retailers to establish a clear market incentive to help kick-start next-generation solutions such as viscose made from straw and recycled fabrics.
And in response, a number of enterprises offer promising technologies. Start-ups such as CRAiLAR and EVRNU are breaking open new fiber options and processes. Brands are excited to purchase these new products made in modern, water-efficient facilities that generate little air pollution and contribute to a circular economy.
Transformation of the viscose supply chain is well under way. The true test will only be known a century from now by future progeny — hopefully enjoying the morning chorus of Indonesia's Leuser Ecosystem or Boreal songbirds.