BUILDING SUSTAINABLE BUSINESSES FIT FOR A SUSTAINABLE WORLD 36 // SUPPLY CHAIN MANAGEMENT The message to our Group businesses is clear, our businesses cannot be sustainable if our supply chains are not. Securing resources and creating sustainable businesses capable of producing and supplying the raw materials, goods and services that we need for our operations is crucial in the short, medium and long terms if we are to be successful in our quest to build sustainable businesses. It is important to establish the life cycle impact and the vulnerabilities of the value chains in which we operate and that makes establishing the right systems and processes for the way that we relate to our supply chains extremely important. Supply chains can be complex, involve multiple players and span different geographies. Today, where we are not in control of the full value chain of our products, we need to work with external organisations to ensure that they are managing their operations to international standards. Partnering in the apparel sector Acknowledging the symbiotic nature of our relationship with our suppliers has led us to develop a partnership with the Sustainable Apparel Coalition (SAC) that developed the Higg Index, a performance assessment tool for the apparel and footwear industries. This tool is helping to establish a standardised approach to supply chain performance measurement. Their aim is not to burden our suppliers but to encourage good practice to enable their growth so that we can ultimately be sustainable together. Protecting forests for business success Given the industries we operate in, we recognise that protecting the world’s forests is not just good for the planet, but critical for our businesses if we want them to thrive and remain operational. Our Pulp and Fibre business’ ‘Forest to Fashion’ programme recognises the importance of effective forest management as a means of securing a sustainable share of the limited wood supply for our value chain. In order to better manage our full fibre value chain we have developed a Wood Fibre Sourcing Policy. This mandates our businesses to implement best efforts to avoid trading and sourcing wood or wood fibre from ancient and endangered forests, endangered species habitats, uncertified high conservation value forests and wood which has been harvested in violation of traditional and civil rights. Our suppliers are expected to follow these stipulations and our businesses are encouraged to work with their suppliers to change practices accordingly. We realised that annual wood growth is finite so in order to grow our businesses three things were needed. Firstly, we developed a Sustainable Forest Management System for the land we own or directly manage. The Pulp and Fibre business is committed to explore, research and develop opportunities for alternative fibre sources and invest in new technologies that reduce the environmental and social impacts of its operations. Secondly, by engaging with experts from Canopy, an organisation dedicated to protecting the world’s forests, species and climate, we are working with forest owners to create chains of custody and to certify the forest management practices to the standards set by the Forestry Stewardship Council (FSC), Sustainable Forestry Initiative (SFI) and Programme for the Endorsement of Forest Certification (PEFC). Finally, we are also developing the technology to recycle clothing to boost the amount of material available for the apparel value chain of the future. Birla Cellulose is committed to implementing an approach that effectively manages and develops its supply chain in a responsible way. Working with Canopy, it has developed a partnership focused on working with farmers in India to secure the growth of eucalyptus trees that not only diversifies the income that they receive from other crops, but given the longevity of eucalyptus growth, is securing a livelihood for farmers in the medium to long-term. By working in such a way, the business is working to secure its supply chain and access to the raw materials recognising that a sustainable and long-term approach goes hand in hand with the business’ growth strategy. Responsible Stewardship