ISSN 2412-7779

Cold Link Africa Online

REGULARS

INCORPORATING COLD CHAIN

Cold Link Africa ColdLinkAfrica

VOL . 38 - NO . 3 | JUNE 2024

Protection of Personal Information ( POPI ) Act

• You are receiving this medium in accordance with the POPI Act as a registered reader , where you have accepted receipt of the publication and / or other related information as defined in the Act .

• In the event that Interact Media Defined ( IMD ) and / or IMD Conferences Exhibitions and Workshops has received your details from a third party ( i . e ., association , official bodies etc .) we have the assurance that they have your permission to provide your information to us or as a result of being a member .

• You have granted permission to store such information as required by the Act .

• We assure readers / users that the information provided is used expressly for the intended purpose of dissemination of information by the companies print and / or electronic means and / or exhibitions relevant to your industry and is not shared beyond the scope of these businesses .

• If you have reason to believe that IMD and / or IMD Conferences Exhibitions and Workshops is in breach of the POPI Act and as it relates to your personal information , please escalate to privacy @ interactmedia . co . za .

• Should you not be satisfied with our company ’ s response to the handling of your personal information , you can contact the Information Commissioner : complaints . IR @ justice . gov . za . For general enquiries , contact inforeg @ justice . gov . za

© Cold Link Africa

Given the number of companies in the cold chain which are multinational , this trend will ultimately affect the entire South Africa and African cold chain , because nowhere is this more apparent than in the intricate web of global supply chains .

Once considered the Achilles ’ heel of the ESG framework , suppliers have now stepped into the spotlight . Stakeholders are no longer satisfied with mere lip service ; they demand transparency and accountability throughout the entire procurement process . The days of treating ESG reporting as a checkbox exercise are long gone . In today ’ s landscape , internationally listed companies subject themselves to rigorous ESG evaluations , signalling a fundamental shift toward sustainability as a core business imperative . These organisations grapple with challenges ranging from emissions reduction to ethical labour practices , all while facing mounting pressure to showcase their unwavering commitment to ESG principles . This commitment extends not only within their own operations but also across their intricate supply networks .

Within an enterprise ’ s carbon footprint , it wields immediate control over specific internal elements such as refrigeration , air conditioning , its fleet , and business travel . Additionally , it exercises marginal influence over electricity consumption . However , the challenge arises when considering the

CO 2 emissions of suppliers – the largest unknown factor . Often , there is insufficient in-depth data or established interventions in place ; in fact , these conversations frequently remain uninitiated . A telling case study conducted by an audit firm exemplifies this issue : in one company ’ s supply chain , a staggering 94 % of their CO 2 emissions emanated from its suppliers , with 71 % directly linked to purchases of raw materials .

In supply chains , an 80 / 20 rule often prevails : 20 % of suppliers account for a whopping 80 % of a company ’ s total expenditure . Among these suppliers , many are already well-established , publicly listed companies with robust ESG strategies in place . However , the real challenge lies with the remaining 20 % – typically comprising small and medium-sized enterprises ( SMEs ) or unlisted entities that operate below the ESG radar . It is evident that initiating conversations with this critical 20 % can be daunting . As a strategic starting point , refining procurement policies becomes essential . By doing so , companies can establish common ground and bridge the gap with smaller businesses , fostering meaningful dialogue around sustainability .”

A prevailing trend compels businesses to reckon with emissions – particularly those falling within their scope 3 boundaries , which encompass the emissions generated by their suppliers . As scrutiny intensifies around the origin and impact of the products and services companies procure , a critical

question emerges : how will organisations with extensive supply chains rise to meet the mounting expectations from investors and consumers ? These stakeholders demand tangible evidence that companies are actively addressing the ESG challenges and opportunities embedded within their intricate supply networks .

The surge of international initiatives , exemplified by the Net-Zero Banking Alliance and the Principles for Responsible Investing , highlights the escalating impact of ESG considerations on global capital flows . With trillions of dollars in play , investors now insist on heightened transparency and accountability from the companies they choose to support . The Alliance , in particular , has pledged to synchronise its lending and investment portfolios with net-zero emissions by 2050 , with some members even setting interim targets for 2030 . Meanwhile , the Net-Zero Insurance Alliance – a consortium of insurers representing a substantial 14 % of the world ’ s premium volume – has committed to transitioning their underwriting portfolios toward net-zero greenhouse gas ( GHG ) emissions by 2050 .

For large corporations , the ESG challenge extends beyond their direct sphere of influence . While they wield control over internal operations , ensuring the ESG performance of third-party suppliers poses a formidable task . This challenge is especially pronounced for smaller suppliers , who often grapple with limited resources and awareness when it comes to addressing sustainability concerns .

EDITOR ’ S COLUMN

However , neglecting supply chain ESG risks has far-reaching consequences . It not only erodes a company ’ s ESG credentials but also leaves it vulnerable to regulatory penalties and damage to its reputation . Compliance alone is insufficient ; treating supply chain sustainability as a strategic imperative is essential for sustained success .

Thankfully , technological progress opens up novel pathways for handling supply chain ESG compliance . AI-powered analytics and blockchain-enabled traceability are revolutionising how companies navigate the complexities of sustainability .

In the not-too-distant future , ESGconscious consumers can look forward to being able to track the provenance of just about anything they buy with the quick scan of a bar code . African firms will need to be ready . The question to ask of any link in the supply chain is : has that business ’ social licence to operate been legitimised ? CLA

Eamonn