Chris Brown of ASDA describes the changing conditions affecting the sourcing of raw materials and their impact on supply chain resilience. The need to consider natural capital in sustainability planning is increasingly important.
“…While raw material sustainability has become more embedded in business planning with many companies publishing their strategies and results, the fundamental supporting resources (natural capital) have not received the same level of attention. The concept and principles associated with natural capital are starting to be used by companies in their sustainability planning. Several options are being considered to bring natural capital into financial reporting . The financial markets are already operating Environmental, Social Governance (ESG) indices to assess these business attributes. The direction of travel indicates that the supply chain vulnerabilities and, often overlooked or discounted, strengths are accounted for. Terms such as ‘stranded assets’, where investments are vulnerable to limits in raw material accessibility, are being considered in investment decisions.
The concepts associated with natural capital will increasingly become more important in supply chain discussions. Already, the Natural Capital Protocol  has been established to develop the framework for assessing natural capital for business. ASDA is working with the Cambridge Institute for Sustainability Leadership  on the relationships between natural capital and agricultural production. Accounting for a business’s natural capital impacts is likely to be a requirement for both consumers and for investment decisions. ASDA is developing programmes on soils, biodiversity and water. Its parent company Walmart has expressed a commitment to longer term targets for improving the stewardship of natural resources. In 2005 the then CEO, Lee Scott, set three sustainability targets, one of which was to sell products that sustain people and the planet (the other two being 100% renewable energy and zero waste)…”
Read on at: Food Science and Technology Journal.