This Ag Commodities Giant has Rolled Out a New Sustainable Supply Chain Technology

More companies are feeling the pressure to ensure their supply chains are minimizing their environmental and social impacts. To that end, Olam International recently announced what it calls AtSource – a traceable sourcing solution the company says will offer insights into the journey raw materials take from farms to consumers’ shopping carts. Based in Singapore and operating in 66 nations, Olam is among the globe’s largest supplier of cocoa, coffee, rice and cotton.

TriplePundit had a few questions about this supply chain initiative. Answering them are Simon Brayn Smith, Vice President, Cocoa, with Olam, and the company’s Head of Corporate Responsibility and Sustainability, Dr. Christopher Stewart (whose answers are noted by his initials).

What were the developments that led to the adoption of AtSource? 

The development of AtSource stems from our purpose to “Re-imagine Global Agriculture.” As a company, Olam has been focused on many initiatives to drive sustainable practices across our own operations and our third-party sourcing. These include for example, the Olam Livelihood Charter, which today embraces just under 363,000 smallholders across Africa, Asia and South America, while across our supply chains, we have been rolling out our supplier code.

However, until the development of AtSource, we haven’t been able to give our customers a clear and holistic view of a single product’s journey from the farm right through all the stages, such as various logistics and processing, until we deliver that product to the customers’ doors (as in food manufacturers, not consumers.) This has required a huge amount of work to put the structures in place internally to capture all of this information, which relate to over 80 key performance indicators across 12 sustainability topics.

What is some of the feedback you're receiving from customers?

We’re receiving positive feedback from those customers is that we’ve met with so far to introduce them to AtSource.

As sustainability and responsible sourcing become increasingly important issues for consumers, the whole food supply chain needs to become more visible, so companies can reconnect their customers with where their food comes from. Our customers’ appetite for real-time data and transparency has therefore never been stronger, and AtSource helps satisfy this demand by providing the ability to track the social and environmental footprint of their product to the source of supply.

How are you supporting suppliers? As companies strive to make their supply chain more responsible, there are more costs involved; and many of these suppliers and producers run on thin margins. So how is Olam supporting this to ensure it works?

This is a huge and costly task for Olam given our vision of all our physically sourced products being “AtSource ready” by 2025. It’s true that many companies within the supply chain are investing heavily in sustainability initiatives - and this is why we think AtSource can be particularly beneficial because with the data and insights it provides, it means our customers can make their investments based on more knowledge, which is therefore both more efficient and effective.

How can this create a "net positive impact?"

(CS) Many companies are making demanding commitments within a framework of “do less harm.” But this is not scaled to the challenge, because if we all continue to “do less harm” on a bigger and bigger scale, ultimately, we will continue to do harm. Instead, what we need to do is have a net-positive impact, which means putting back more into farming systems than we take out. In concrete terms, this means drawing down more carbon dioxide than we release, building back organic matter into the soil, restoring and regenerating natural ecosystems within farming landscapes, raising water tables, and regulating the flow of water - not just minimizing the abstraction of water.

On the social side, it means that we need to address not just the symptoms of farmer poverty in developing nations, but also understand the root cause of poverty in that community. Getting to the root of the problem and then working on reducing and halting the negative impacts is at the heart of this net-positive model.

As you may have already seen, in April we announced our new Living Landscapes policy, with its overarching vision of having a net-positive impact. Its aims apply across products, and cover Olam’s plantations and farms, as well as its extensive third-party sourcing network of more than 4 million small and large-scale farmers. The Policy represents a step-change in ambition for Olam: to re-imagine agriculture by putting back more into food and farming systems than is taken out.

How does all of this align with the United Nations’ Sustainable Development Goals (SDGs)?

(CS) Our global corporate responsibility and sustainability framework integrates our new purpose, to “Re-imagine Global Agriculture” with ten new material areas and the SDGs on which these material areas will have an impact.

The intended outcomes of our purpose-prosperous farmers and farming systems, thriving communities and re-generation of the living world are the criteria for having a net-positive impact. To achieve this, we need to drive positive transformation at scale, where there’s shared learning, benefits and responsibility, and involves the participation of local communities and stakeholders.

Aligned with SDG 2: Zero Hunger, for example, Olam is improving economic opportunities for farmers with its joint initiative Better Rice Initiative Asia (BRIA), which aims to develop rice production and consumption through a value chain system. This has achieved income increases for producers of between 10 and 25 percent. The initiative is transformative because it targets the whole rice system at scale, across a number of countries, addressing all the different elements of farm production, from management and water use, to health and safety and labour rights.

Another example is how we’re addressing the global challenge of water security, aligned with SDG 6, is on our coffee plantation in Tanzania. We’re looking at water management not just on our plantations, but at a landscape scale. As well as promoting better irrigation on our farm, we’ve set up a water management board for the Upper Ruvuma river, to tackle the challenges needed to ensure water security for the 300,000 people who live in the surrounding river basin.

Image credit: Olam International