NEW YORK: The UN Global Compact has released the first-ever guide on supply chain traceability to identify and track products from raw material to finished goods.
The UN says traceability has become a key topic for companies in response to increasing regulatory pressure and consumer demand for organic, fair trade and environmentally and socially-friendly products and materials.
However it acknowledges that traceability has a long way to go to be considered an integral part of sustainable supply chain management.
"With corporate supply chains growing in scale and complexity globally in recent decades, it is critical for companies to think beyond short-term financial considerations and build capacities to deliver long-term value along the entire supply chain," said Ursula Wynhoven, the UN Global Compact's general counsel and chief of Governance and Social Sustainability. "Traceability systems offer an unprecedented opportunity for companies to improve transparency throughout the supply chain and fulfil their wider sustainability promises."
The guide offers recommendations to large and small companies on how they can consider and implement traceability while highlighting the importance of collaboration with stakeholders around a common purpose. Examples include gaining a full understanding of all relevant sustainability issues for commodities; developing the business case for traceability once it is identified as the best way to mitigate those risks; and participating in existing traceability schemes.
The UN notes that while beef, biofuel, cocoa, cotton, fish, leather, minerals/diamonds, palm oil, sugar and timber are increasingly subject to traceability, many other commodities could benefit from a similar approach.
Michael Rohwer, programme director of the Conflict-Free Sourcing Initiative commented: "Strong traceability practices are vital for companies that want to build conflict-free products, which require the ability to trace the metals in products all the way back to the mine. Only by tracing the origin of these materials in their supply chains can companies work to build conflict-free products, which are a hallmark of leading sustainable businesses today."