ASIA - While global FMCG brands are among the leaders in implementing responsible sourcing policies, their Asian counterparts have only started to identify and manage these issues and fall badly behind global leaders, according to a hard hitting report published by WWF World Wide Fund For Nature (Formerly World Wildlife Fund) which suggests their failure to report may lead to vulnerabilities in their supply chains.
The guide, “Asian Fast Moving Consumer Goods – A Sustainability Guide for Financiers and Companies”, claims to be the first-ever review of public data on soft commodities, water and packaging from 26 companies in nine Asian countries - China, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Thailand, Vietnam - and identifies key risks, sets out the business benefits of sustainable practice and provides practical recommendations for improvement.
According to the WWF report, the risks of serious environmental and social impact caused by poorly-managed supply chains can be avoided with improved practices that will also benefit business: “Asian brands urgently need to employ the strongest management approach possible: time-bound, quantified procurement targets based on third party certification standards.”
“Climate change, water and food crises are already causing increasing problems in the region. Events such as the regular haze in Indonesia, Malaysia and Singapore are not only unacceptable but also avoidable, and informed consumers are increasingly pointing the finger at companies they see as responsible,” said Jeanne Stampe, co-author of the guide and WWF’s Asia Finance and Commodities Specialist.
The WWF report is targeting readership in the financial and investment banking sector as Asian Fast Moving Consumer Goods (FMCG) are an important economic growth sector for Asia and a crucial component of financiers’ portfolios. But companies risk serious environmental and social impacts over coming years if their supply chains are not well-managed, especially those relating to ‘soft’ commodities (agriculture, forestry and seafood), water and packaging.
As part of its Market Transformation Initiative, WWF is working with major soft commodity buyers, supply chains and financial actors to show that commodities can be produced at affordable costs with measurably reduced environmental and social impacts.
By publishing the guide, WWF is challenging Asian FMCG companies to implement sustainable sourcing policies based on credible, international certification schemes with time-bound targets and regular progress reports.
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