In your analysis, describe the project/initiative(s): the what, how much, and the who, following the IMP framework.
You must mention the direct and intended impact of the company's actions and measure how significant it is.
Learn more in the article Step 5: Assess severity and value.
Introduction
The introduction should provide background information about the importance of a resilient supply chain and the wider social impact this would have on the communities they are part of.
Discuss the vulnerability of supply chain workers that is industry-specific
It should consider the relevant geographical areas the impact is in
Consider the ways empowerment of such groups boosts community well-being
Read more on how to build a strong introduction in this article.
Core Analysis
The body shall explore the direct company’s action/project/program, delineating:
The number of suppliers the company has, and if possible, the number of employees in the supply chain (indirect employees)
What types of jobs do the workers have in the company’s direct supply chain
What the geographical reach is
- How the workers and communities are empowered, through, for example:
Microloans
Fairtrade and fair purchasing contracts and practices
Skills, such as farming, economic training, sustainable and responsible practices, etc.
Increased decision making
Local sourcing
Since when and for how long workers and communities have been positively impacted
How many people were actually reached and impacted
- The tangible outcomes and impact, such as:
Reduced poverty rates in one area
Increased security and access to resources (financial, food, employment, water, and other resources)
Increased ownership, such as land
Stable income and increased profits
It would be valuable to know how the company is driving its policies into the supply chain.
Rather than conducting relative impact assessments (representation as a percentage or only compared to the industry), an absolute impact assessment needs to be made. You should report on how the company is empowering or degrading underserved populations in absolute terms, such as systemic changes brought about by the company or in its supply chain.
What the company is doing that is helping or hurting women's standing in society, such as:
Whether the supply chain upholds what societal norms and standards accept as 'appropriate' jobs for the underserved population.
Are they working in the lowest-paid quartiles?
Are women vulnerable to sexual harassment and violence? Are there security threats when traveling during non-conventional working hours? Are the women's care responsibilities paid for?
Do the underserved communities have limited bargaining power? Are they underrepresented in unions?
Within the supply chain, is the spending for diverse suppliers significant compared to non-diverse suppliers?
Regarding inclusion, the analysis can discuss one or more ways the company has proactively built a diverse and empowered workforce in the supply chain:
Strengthening anti-discriminatory policies
Eliminating bias in the evaluation process and promotion opportunities
Spending significant amounts on diverse supplier groups
Cross-training programs, training, microloans, fair trade, local sourcing, etc.
Other initiatives such as fostering diverse thinking and changing language, mentorship programs for diversity growth, training options for diversity training
Within the supply chain, is the spending for diverse suppliers significant compared to non-diverse suppliers?
A few points to consider:
Some companies are empowering communities outside of their supply chains, such as chemical companies assisting farmers to increase crop yields through the supply of their products. A lot of empowerment is happening, but not actually in their supply chain. This should still be written about when there is a significant impact, but it should be written under the topic 'Labour Practices' (please contact a member of the team if you want to capture a significant impact).
Job security, protective equipment, and certifications = do not equal empowerment.
When companies use suppliers, it automatically created employment which does not mean that these workers are being empowered. Protective equipment is a basic standard depending on the nature of the work. And for certifications, you should be critical about these and they should not be the focus of the analysis as there is a lot of 'social-washing'.
Avoid making big claims that are unsubstantiated with quantitative data, having the text mirroring sources.
For instance, claiming that companies are ensuring "job security", "increase economic growth", "financial stability", etc. Should not be included if there is no data to prove this and show how this is being done.
You do not need to make the impact seem bigger than it actually is by making big claims about empowerment and its impacts.
Remain nuanced, unbiased, and factual to just report on the impact data.
If the company only sources locally or only spends a significant amount on diverse suppliers, this can be written about.
It should, however, include a disclaimer that to the best of our knowledge, the company has not reported initiatives on other empowerment methods. This should then be captured in the scale (smaller side).
To find impact data, you can always look for studies on specific communities (without researching the company) to see if there are any constraints faced by these communities or if they have been able to secure their livelihoods, etc.
How do measure the impact of Supply Chain Empowerment?
Example 1: Through training and microloans, Nestlé supports the livelihoods +500k farmers in its supply chain
The issue: "Global supply chains employ ~450 million (M) people11. Farmers are part of society's most vulnerable group, often facing food and wage insecurity and making most of the world's poor and undernourished12. Good supply chain practices provide better-earning prospects, & build better communities13;p6."
Program 1: "The company works directly with 550,000 farmers in its "Farmer Connect Program", providing entrepreneurial training to 400,000 each year, which represents 57% of all Nestlé's supply chain farmers3,6;p26…
Impact: …attracting young farmers and reducing food insecurity while improving nutrition6;p25-26.”
Program 2: “Village Savings and Loans Association (VSLA) scheme has helped 6,690 women save & manage their own business…
Impact: ...increasing by 5% their land ownership and involving them in decision making8;p14.”
Program 3: “Terrafertil, a controlled entity of Nestle since 2018, collaborates with small farmers in Colombia and Ecuador…
Impact: ...offering them training and stable incomes by guaranteeing crop purchases at fixed prices10;p8,9.”
Program 4: “Nestlé also set in place a Milk District Model in developing countries, offering free vet services and technical animal husbandry support as well as $25Mn in microfinance loans to more than 296,000 farmers…
Impact: ...ultimately alleviating poverty5.”
Example 2: Symrise improves livelihoods of Malagasy vanilla farmers, but might be also creating dependence
The issue: "80% of the world's vanilla is grown in Madagascar1, the 9th poorest country3, where 75%2 out of 28,361,8259 live in poverty. In addition, small-scale vanilla farming is threatened by price fluctuation, creating economic instability for the farmers5,6;p4."
Supply Chain Context: “Symrise sources vanilla directly from 7,000 Malagasy farmers in 84 villages1. By working directly with them (see report 20208;p123), Symrise provides them with a long-term guaranteed income5. This brings growth, transparency, traceability, and benefits 34,000 people1.
Partnership 1: “Symrise established partnerships to achieve sustainable vanilla sourcing in Madagascar…
Impact: …For example, its partnership with Kellogg provided resilience and crop diversification training to 1,000 Malagasy vanilla farmers3,7.”
Partnership 2: “Since 2016, Symrise also partners with Save the Children…
Impact: …The partnership provided health insurance to 9,000 households and 38,000 community memebers2. In addition, 40,000 people received essential package training to improve health and nutrition, and 2,400 people got access to education services2.”
Certifications: “Symrises uses certifications (Fairtrade, Rainforest Alliance, Organic)6;p20 to ensure fair treatment of farmers6;p4…
Impact: …As a result, it was ranked among the top 10 sustainable companies out of 9,6004. The farmers get most benefits by being given rice advances, premiums paid in advance, and crop diversification programs that all benefit the livelihoods of farmers6;p21. Further, these programs prevent early harvesting (which is positive) due to an immediate need for food money6;p21 and ensure quality.”
It is important to remain critical and nuanced. In your analysis, make sure you add value to your readers and go beyond the company’s CSR report by not merely reporting data from the company’s report but going the extra mile of providing additional metrics, studies, and sources to make your analysis robust and the impact value and severity are clear.
“On the other hand, these programs prevent farmers from selling on an open market and render the farmers dependent on the company6;p28. ”
Common Mistakes:
Make sure the empowerment initiatives take place inside the company’s own supply chain.
Go beyond the company’s own reports/websites to avoid green/social washing.
Make sure the impact is relevant.
When partnerships are discussed, individuate the company’s contribution.
We are looking for initiatives that are helping suppliers solve their problems and empowering them, initiatives aimed at making the company’s practices less carbon-intensive, or remediation initiatives that are not relevant.
Avoid making big claims that are unsubstantiated with quantitative data.
Make sure to describe the severity of the impact by taking into account:
1/ The scale of the impact
Is the life of people concerned deeply affected, or does the issue just marginally impact them?
Are the changes brought by the issue profoundly changing society or the planet?
2/ The scope of the impact
Is the impact local, national, or global?
How many people are concerned? Thousands? Hundreds of thousands?
3/ The irremediability of the impact