Complicated, multi-layered global supply chains can often be hard to control and are often overlooked when considering a company’s impact on nature and biodiversity in favor of value chains. In this article to help businesses develop their nature strategy, we look at some of the ways they can factor nature into managing their supply chains.

“As a company that sources a lot of paperboard, we know that our most significant biodiversity impacts are in our supply chain,” explains Anni Vuohelainen, Nature Project Manager at food processing and packaging solutions company Tetra Pak. “Nature is taking an ever more prominent position within the company.” 

To address these impacts, the company recently carried out a nature-related materiality assessment that looked at issues across their supply chain. Using the information and insights they gleaned, the company has developed a nature strategy, the Tetra Pak Approach to Nature, with 23 targets and actions, that has recently been shared through It’s Now for Nature. 

“When you go through a materiality assessment, and you realize just how big a percentage of your nature-related impacts are in your supply chain, it becomes clear that sustainable sourcing has to be a really big part of any actions you take to address these impacts,” she explains.  

“It’s very easy to allow work to become siloed. But because our biggest interface with nature is our supply chain, we have ensured that the nature team works very closely with our sustainable sourcing team, and that all our targets and actions are jointly agreed.” 

The company has set minimum requirements for all its suppliers, which include deforestation free-sourcing and maintaining high conservation values in the forest, but: “this is the backbone, not a target,” she says. 

As part of its nature strategy, Tetra Pak has also introduced additional targets around sourcing materials from certified and controlled sources and is planning to use improved traceability information to carry out additional deforestation due diligence. This supplements the certification it already uses in its supply chain. 

For certain high impact materials, she adds: “we expect suppliers to do their own nature related materiality assessments too and develop their own action plans.” 

While mapping dependencies and impacts along the supply chain can help companies adopt a targeted approach, allowing them to act decisively and quickly, it can pay to delve deeper, too. 

Lucy Gaffney, director at Business for Biodiversity Ireland, believes it’s vital companies consider the bigger picture. One company that Business for Biodiversity Ireland works with imports a high volume of soy, Gaffney explains, but the owners hadn’t stopped to think where the soy came from and the impact on nature that its production was having (soy is a crop that is often linked to deforestation).  

“You need to think about the demand you are creating for commodities that are potentially causing damage in other parts of the world” she says.  

 Angela Graham-Brown, the Nature Action Director at WBCSD, agrees. “What I’ve noticed is that some companies still have little visibility and understanding about the specific nature impacts of the different products they source, and the potential risk exposure that comes with them,” she says. Companies need to break down exactly what they are buying, whether it’s ingredients, raw materials or finished products, in order to build a comprehensive assessment of their impacts along their full life cycle she explains. 

“With forest products, for instance, deforestation isn’t always the biggest impact, and the risk can be relatively easy to mitigate by buying from responsible sources. But if you look across the full life cycle of a forest product, other factors should be considered such as manufacturing – if you don’t go deep enough into a particular product, you can overlook some of these risks,” she adds. 

Another issue is that many suppliers are often small, micro businesses, says Gaffney, and as a result: “a lot of businesses, especially in the tertiary sector, find it difficult to connect to nature and to really understand how they have an impact.” 

Global building materials company Holcim works with more than 85,000 different suppliers around the world, the majority of which are SMEs from domestic markets where Holcim operates, explains Renata Pollini, the company’s Head of Nature.  

“Since 2010 we have carried out supplier due diligence programs covering 35,000 suppliers to identify, prevent and mitigate ESG impacts in their supply chain, including nature-related topics.” says Pollini.  

After piloting the new SBTN methodology, Holcim are improving the traceability of suppliers by engaging more specifically with those operating in water-stressed areas, to protect basins in risk. “We are capturing coordinates of our supplier’s operating sites to map it in for example the WRI Aqueduct platform. As a next step, we will be launching a new ‘Water Management Program’ to help suppliers build capabilities to reduce freshwater withdrawal and reduce water pollution.” 

Tetra Pak looks to work with their supply chain outside of formal procurement structures, explains Vuohelainen. This includes engaging with them through Tetra Pak’s Supplier Sustainability Initiative ‘Join Us in Protecting the Planet initiative’, which involves collaborating with key groups of suppliers, explaining targets and expectations, and providing information and educational material. 

Support for suppliers is crucial, agrees Gaffney, especially action around signposting and making them aware of tools they can use that already exist, such as ENCORE. For bigger contracts, and those with an obvious impact on nature, insisting that there is a certain level of compliance, is also important. This may involve encouraging them to change some of their practices to reduce their impacts. “Some companies are even mandating that suppliers have a nature strategy as part of tendering process,” she adds. “Suppliers need to take a bit of ownership themselves.” 

Adele Cheli, Sustainability Partnerships and Strategy Director at GSK also comments: “Our sector has complex supply chains, so the key challenge is around data traceability to better understand our upstream nature impacts. Understanding the raw materials used and where they are sourced from often means going back many tiers down the supply chain. Prioritization and collaboration with suppliers are critical. We have honest and constructive conversations and have set robust sustainable sourcing standards, focusing on business-critical materials where we know there is an impact on nature. We’re working with them to address what needs to happen and how we can help to enable it,” she continues. “We are really at the point of building a roadmap together.” 

However, as with so much when it comes to business’ impacts, speed is of the essence, says Vuohelainen. “It’s easy to spend a lot of time analyzing your supply chain in detail and trying to get better and better data, but you can’t hope to resolve all of that before you get going. 

“We can’t lose more time before  and if you do even a high-level initial assessment you will get an idea of where the main impacts are and be able to take action sooner rather than later.” 

There are more details about writing your own strategy for nature in the Nature Strategy Handbook.