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Case Studies:Layout 1 27/06/2011 10:23 Page 1
Building resilient value chains
Value chain case studies illustrating different intervention types
Case Studies:Layout 1 27/06/2011 10:23 Page 2
Contents
APPENDIX: CASE STUDIES
B&Q: Sustainably sourced timber
B&Q: Sustainably sourced timber Page 2
Communicated by Jamie Lawrence, Corporate Responsibility, Kingfisher plc
Cargill: Sustainable Soy Partnership Page 5
Introduction for sustainable forestry. It is included within
Nestlé: The Nescafé Plan Page 8 B&Q’s journey to sustainably-sourced timber government procurement policies on the
began as a ‘decoupling’ intervention, but market side and within their forest
Olam International: Rice Nigeria Page 10 developed into a number of ‘transition management strategies on the production
schemes’ across their timber supply chain side.
SABMiller: Water Futures Page 13 and beyond using certification, roundtables
and land use planning. Independent verification of forestry enabled
B&Q to move towards sustainably sourcing
The intervention timber for its products. At an early stage it
Estimates of illegal logging suggest that it announced the aim to move to 100 per cent
accounts for over a tenth of the global proven well-managed and sustainably
timber trade, with products valued at $15bn sourced timber, increasing its sustainable
every year contributing to global supply each year. Several B&Q suppliers have
deforestation and climate change. In the grown with the business, grasping the
early 1990s, as rainforest deforestation and importance of FSC from an early stage.
tropical timber sourcing gained public
prominence, B&Q (part of the Kingfisher At the start, FSC was the intervention for
Group) came under increasing pressure to B&Q. However, certification does not solve all
show transparency in its timber sourcing. forest issues, and B&Q and Kingfisher have
This sparked a huge internal focus on its now developed a wider ‘forest programme’.
timber supply chain to look for solutions. This includes promotional campaigns such as
‘Good Wood’ and ‘Forest Friendly’, awareness
The company concluded, along with a raising through The Prince’s Rainforest
number of other organisations, that a Project, regulatory engagement via ‘The
sustainable timber product label which was Timber Retail Coalition’, NGO programmes
credible and trustworthy was needed to help such as ‘Forest Trust’ and WWF’s Forest and
consumers make informed purchases that Trade Network, and investment mechanisms
did not contribute to forest degradation. As a such as ‘The Forest Footprint Disclosure’.
result, B&Q became a founding member of These initiatives have led to strategic
the Forestry Stewardship Council (FSC) in relationships with suppliers to ensure
1991, and in 1993 was one of the first transparency and resource security in the
retailers to develop a responsible timber supply chain, an approach that is changing
policy. the purchasing model norm within the
Kingfisher Group.
Although the FSC was initially a roundtable
initiative for supply chain and forest Approach, challenges and achievements
management issues, its scope and Deforestation remains high in the public
partnerships grew. Non-governmental consciousness and a failure by companies to
organisation (NGO) involvement was crucial engage on the issues carries reputational
in building FSC credibility and ensuring that risks. But consumer demand remains under-
the project was achieving its aims. FSC now developed, and choice editing (in which
provides assurance and a recognised chain of lower ethical or environmental choices are
custody for certifying wood products, and is removed from the customer or supplier offer)
generally considered to be the ‘gold standard’ through timber procurement policies has
3
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been the main element of the timber protected and sustained. What was once a Lessons learnt Although B&Q realised that it was important
programme to date. certification intervention is now much more To operate sustainably and, as competition early on to proclaim its preference for FSC-
varied – with certification, roundtables, for ever decreasing resources continues, the sourced timber, its targets could only be
Refusing to buy certain species of timber, regulatory/government engagement and, company has realised that it must protect achieved with sound policies that gave a
essentially banning them in-house, and increasingly, taking retailers into land use and enhance all the environmental resources clear remit and priorities to its buying teams,
refusing to buy from non-certified sources planning discussions. and services that it uses or that are affected and effective monitoring, auditing and data
has a significant influence on the supply by its operations. Learning from what was capture mechanisms. Its focus is increasingly
chain. But, while this method can help an Impact once a third party certification and on tropical timbers, working either through
organisation meet its individual sustainability From an early stage, B&Q made the bold verification process has extended beyond FSC or partners such as the Tropical Forest
needs, it ‘decouples’ the business from non- statement that it would reach 100 per cent B&Q’s timber supply chain. It has enabled Trust, Rainforest Alliance and WWF.
complying suppliers/forests. The easier sustainably sourced timber. This B&Q to diversify sustainable sourcing and
(short-term) option in many cases is for the announcement helped to move the debate choice editing into areas such as peat use in The Kingfisher Group as a whole believed
commercial team to switch suppliers rather forward significantly, but required a process gardening products and paints using volatile that communications about corporate
than to move the supplier towards for measuring progress and checking sources organic compounds, Coordinating the responsibility issues needed to be strongly
certification. To mitigate this, B&Q has of supply. As traceability became more and timber work with other interventions, both supported by evidence, data and key
partnered with the Forest Trust and WWF to more important to the Group, human error in internal and external, has been crucial. The performance indicators. This cautious view
move forests as a whole towards certification purchasing decisions needed to be role of the consumer has also been has meant that it has not always
in a phased approach. This takes time. eliminated. Purchasing policy has now been important though through choice editing communicated its leadership position in
Moving a forest to FSC standard typically can incorporated into the Group’s quality control and not just a reliance on informed relation to timber and it could have been
take up to five years. systems together with independent consumer choice. Indeed, retailers gain louder and prouder of what it was achieving.
certification and internal monitoring and advantage if they anticipate what their
When FSC first started, initiatives required assessment – all of which requires the customers will want two or three years down Leading by example is important, and in
little coordination since very few existed. As allocation of internal resources. the line and encourage this. 2010 Kingfisher invited IKEA, M&S and
the number of initiatives increases, and Carrefour to join it in forming the Timber
sustainable sourcing becomes more From February 2011, B&Q became the first The business has also realised that it will Retail Coalition to support EU-wide
mainstreamed into company procurement major UK retailer to achieve 100 per cent need to keep pace to respond effectively. As regulations to control the import of illegally-
policies, greater potential exists for overlap proven well-managed and sustainably it moves towards 2020, B&Q aims to do this logged timber. This approach aims to create
and duplication. As part of its process of sourced timber. A major effect of B&Q’s early through continued work with governments a ‘level playing field’ since illegal timber
building strategic supplier relationships, B&Q work on timber has been the evolution of (e.g. through the EU timber regulations), continues to have easy access to the market
now assesses and rates its own suppliers on the debate internally and an opportunity to product innovation, working within ‘closed and undermine sustainable sourcing.
sustainability issues and is working on how evolve a wider B&Q/Kingfisher forest loop’ product systems and by understanding
to complement this with independent programme and strategy. the impacts of all products.
interventions such as the FSC and PEFC
(Programme for the Endorsement of Forest The company now has increased
Certification) . Nowadays, 77 per cent of understanding of what is meant by a resilient
Kingfisher Group timber is from proven, well- supply chain. It also realises that resilience
managed sources (50 per cent of this is FSC), and sustainability are not necessarily the
and 100 per cent of B&Q UK products same. Having 100 per cent sustainably
contain wood from either certified or sourced timber does not guarantee that a
independently verified sources. company will have commercial access to that
source for the next 30 years. Competitors, or
Traditionally Kingfisher/B&Q have stayed four even companies within the same
or five steps away from the forest in the organisational family, can tie up sustainable
supply chain. Now they are exploring how to resources, and longer-term resilience in the
get closer to the resource itself and influence supply chain requires strong relationships
the debate to ensure that forests are with suppliers and partners.
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and raise awareness about deforestation responsibility. Demand in the soy bean
Cargill: Sustainable Soy Partnership issues and offer the support of the market is such that the farmers could have
Communicated by Mark Murphy, AVP Corporate Affairs, Cargill Responsible Soy Partnership. As well as sold their produce elsewhere and continued
mapping, training and monitoring, the to neglect the Forest Code. Working with the
Partnership offered to assist farmers on farmers and keeping them in the supply
Introduction 350 farmers, covering an area of around working out land rights issues. Land rights chain with more sustainable practices, rather
By using roundtables, land use planning and 1,200 kilometres. The training supports the are a complex and heated topic in Brazil, with than excluding them and allowing continued
independent monitoring of compliance with farmers in working toward compliance with layers of rights on the same piece of land so deforestation, has meant that no
a national Forest Code, the Sustainable Soy the Brazilian Forest Code. A fundamental that farmers may not actually own the land deforestation has occurred the area around
Partnership is a ‘transition scheme’ that keeps requirement of the code is that 80 per cent that they think they do. Legal assistance was Cargill's soybean terminal in Santarém since
farmers in the Santarém area of Brazil in the of the farmers’ land must remain forested. given to the famers to help them navigate 2008 (as verified by satellite imagery). The
supply chain, helping them transition to the legal maze providing an attractive Responsible Soy Partnership with Cargill and
compliance with government legislation. Farmers are initially supported by the project incentive for farmers to become involved. TNC has not only halted deforestation in the
to map areas of their land which are not Santarém area, it has also provided a model
The intervention complying with the forest code, and then Cargill offered a second incentive: a market. for the Brazilian government's conservation
Centred around Cargill’s soybean terminal in helped to improve their practices to bring The company would sign supply contracts efforts in other parts of the Amazon.
Santarém in Brazil, the Responsible Soy them up to compliance. GPS (Global with the farmers that stipulated Cargill would
Partnership was initiated in 2004 by Cargill Positioning System) is used to monitor the only buy from them if they were in Soy beans produced by the project are being
and The Nature Conservancy (TNC). Brazil is rate of deforestation in the area and help compliance with the Forest Code. supplied to Cargill’s European customers,
unusual in that it has an excellent national ensure farmer compliance. helping to address commercial risks and
Forest Code to help protect high Localisation played a key role. The plant was concerns about responsible and sustainable
conservation-value land and pristine Amazon Approach, challenges and achievements local to the farmers and Cargill had a daily, sourcing practices.
forest. At the time, the code was not being Incentives to tackle the issue came from two long-term presence. This localisation
implemented nor was well enforced. directions. The first was NGO concerns about generated interest from farmers, civic and By starting with a pilot project focused on
deforestation and the second was civil society groups in the area. It also high conservation-value land management,
TNC saw Cargill as a key stakeholder in the commercial concerns from corporate presented the biggest challenge, that of Cargill has seen in practice the layers of
Amazon land use issue – soy farmers in the customers about product supply. The building trust with stakeholders. The farmers complexity that also apply to its supply
supply chain were not complying with the approach to meeting both is broadly the needed to trust both Cargill and the NGO, chains in many other geographies. Once off
Brazilian Forest Code, exacerbating same: partnership. and Cargill and the NGO needed to trust the ground, the Responsible Soy Partnership
deforestation in the area. At the same time, each other. Building relationships and was able to coordinate its work with a bigger
European non-governmental organisations Cargill had already had a long history of engaging communities takes time and project – the Roundtable on Soy Moratorium
(NGOs) were highlighting the effects of partnership with TNC in the USA before the regular two-way communication between in the Amazon. Cargill, other Brazilian soy
deforestation due to soy farming, with the NGO opened a conversation with the partners to be successful. Relationships have processors and NGOs signed the Moratorium
subject gaining ground in the media. Cargill’s company in São Paulo about soy production now been built at all levels with local and in 2006, publicly committing the soy
international customers did not want their in Santarém and the effects on deforestation national industry bodies, and local and processors to not purchase soybeans from
products associated with deforestation and on the Amazon biome (i.e. a large naturally federal government. Transparency, clear and lands that have been deforested in the
so commercial pressures were brought to occurring community of flora and fauna complementary partner objectives and clear Amazon biome. The Moratorium has
bear on the issue. Given Cargill’s role in the occupying a major habitat). This trusted communications within and beyond the contributed significantly to reducing
markets and the company’s investment in relationship was an opportunity for Cargill’s partnership have been vital in ensuring the deforestation by independently monitoring
the region, it was in a good position to show work in the Amazon to be a learning pilot project was successful in getting soy production, and penalizing farmers who
leadership to address the issue. ‘laboratory’ on soy. The NGO brought farmers on board and keeping them cut down local forests.
expertise to the partnership and did not involved.
Cargill and TNC started a pilot training expect Cargill to do all the work itself. The A number of important secondary goals
scheme of 25 small- and medium-sized farms quality of TNC’s field staff in the area gave Impact have now been achieved. The project has
in the immediate area around Cargill’s soy Cargill the confidence to move ahead with The primary project goals were to combat shown Cargill that this type of intervention is
terminal. The pilot study provided farmer the pilot project. deforestation in the Santarém area, satisfy an effective model for working with NGOs to
training, legal assistance and land mapping customer concerns, and uphold Cargill’s address supply chain issues. As a result of its
tools. The scheme has now grown to over TNC and Cargill staff would visit soy farmers reputation and commitment to corporate experience with the Responsible Soy
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Partnership, Cargill is now working in Cargill has seen the benefit in demonstrating
partnership with NGOs to address social and greater transparency and accountability, and
environmental challenges in its supply chains in looking for alternative ways to reach
in other regions, for instance, for cocoa in solutions. NGOs are increasingly viewed
Africa and palm oil in Indonesia. within Cargill not as a detractor but rather as
key partners in building successful
Lessons learnt interventions by understanding and
By building compliance to an existing providing training and solutions – as in the
national Forest Code into the operating case of the Sustainable Soy Partnership.
principles of the intervention, the
Sustainable Soy Partnership has been able to
develop a business strategy that addresses
commercial, reputational and policy issues in
their supply chain.
The Sustainable Soy Partnership has
encouraged Cargill to take a broader
stakeholder perspective on supply chain
issues and to be sensitive to a greater array of
external factors.
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the potential to increase their income by the plan has already increased the uptake of
Nestlé: The Nescafé Plan doubling their crop yield. To improve improved farming methods by developing
Communicated by Claus Conzelmann, Vice President, Head of Safety, Health & cultivation techniques the company trained direct relationships with farmers. In some
two Thai scientists in sustainable agricultural areas, Nestlé has bought direct from farmers,
Environmental Sustainability, Nestlé
techniques. These scientists then worked cutting out middle-men and thereby
Introduction optimising product packaging, making with the farmers to encourage them to increasing farmer profits and control. A
Through a partnership between Nestlé and a factories more energy- and water-efficient, adopt more sustainable practices, such as cornerstone of the plan has been the
number of non-governmental organisations and by reducing waste. Raising consumer reducing chemical use and using improved distribution of millions of higher-yield and
(NGOs), the Nescafé Plan is a ‘transition awareness about being energy efficient pruning techniques. disease resistant coffee varieties to farmers.
scheme’ that uses land use planning and the when preparing coffee products, and
sharing of technical expertise to move proposing a solution for consumers to The Nescafé Plan is not an isolated Lessons learnt
towards publicly stated targets for reduce their footprint, are important aims of intervention but comprises a number of The Nescafé Plan acknowledges the
sustainably sourced coffee, and to increase the intervention. workstreams and initiatives that build on importance of a long term (ten-year)
the stability of supply. previous work (such as the Cocoa Plan). The investment in local engagement. Training by
Approach, challenges and achievements Plan is coordinated with other Nestlé large numbers of agricultural advisors and
The intervention Partnerships have driven the intervention. initiatives, such as waste-to-energy schemes third party verification to bring suppliers up
The Nescafé Plan was created to improve the Through partnerships with public and private where spent coffee grounds are used to to standard and improve efficiencies in the
quality of coffee and to transform coffee farm institutions in a number of countries (such as meet factory energy requirements, and supply chain, is critical in this engagement.
management. Endorsed by the Rainforest Mexico, Thailand, the Philippines, Tanzania improved industrial refrigeration techniques The effect is magnified by encouraging
Alliance, the Sustainable Agriculture Network and Uganda), Nestlé has distributed over 16 that reduce energy usage, carbon emissions large-scale suppliers to address issues in their
(SAN) and the Common Code for the Coffee million coffee plantlets in the past ten years. and pollutants. supply chain.
Community (4C), the Plan supports To further improve the quality of the coffee
responsible farming, production and harvest, the company has expanded its Scaling up is the single biggest challenge Scaling up is a huge challenge. The
consumption. The initiative aims to bring all technical assistance programmes, providing that the intervention faced. Nestlé has set up intervention is in part an evolution of existing
farms that directly supply Nescafé factories 10,000 coffee farmers a year with access to pilot studies and demonstration plots, but relationships between Nestlé and NGOs, and
up to the 4C baseline code by 2015. Nestlé agronomists who advise them on there are too few ‘trained trainers’ to provide brings together a number of initiatives that
farming and post-harvest practices. expertise to the huge numbers of farming build on previous work. Joining forces with
Through the Nescafé Plan, experienced communities involved. By working with NGOs, and applying their expertise
agricultural specialists from the Rainforest The project would not be possible without partners, the intervention is increasing the specifically to Nestlé’s own supply chains, has
Alliance, SAN and Nestlé bring together the NGOs such as Oxfam and the Rainforest network of agricultural advisors who can enabled the company to push its existing
local knowledge of farmers with modern Alliance. Many other NGOs and unions, in support the farming communities directly. engagement further and faster.
science. Farmers are given new tools and coffee-growing countries and elsewhere, Nestlé also works with its large scale supplier
techniques so that they can sustainably farm also play an important role in working companies to encourage them to address
by using less water and fewer agrochemicals, towards the Plan’s goals. the issues in their supply chains.
and without clearing the rainforest.
In Thailand, partnership and research have Impacts
Based on Nestlé’s concept of ‘Creating Shared gone hand in hand. Nestlé wanted to ensure The intervention will be ‘work in action’
Value’, the Plan’s stated commitment is to a long-term supply from the 25,000 growers between 2010 and 2020. By providing-on-
safeguard the supply of coffee as an tending the robusta coffee bean. Farmers the-ground training and technical expertise,
important raw material for the company and who cannot earn a sustainable income from
for the future of the communities who coffee in the years when coffee prices fall,
produce it. The company aims to double the may change crops to para rubber trees or
coffee it purchases directly from farmers and palm oil, thereby endangering the supply
farmer associations from 170,000 farmers to chain. To head off this risk, Nestlé tested
180,000 tonnes by 2015. different varieties of robusta coffee plants
and selected the best ones for specific
Responsible production and supply forms environmental conditions. As a result, 600
the second strand of the intervention by farmers bought planting materials that had
10 - Value chain case studies illustrating different intervention types 11
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expansion. Because of the involvement of is one of Olam’s first moves into food
Olam International - Rice Nigeria the State Government, Olam and USAID, First production. As the company’s involvement in
Communicated by Chris Brett, Senior Vice President Head of Corporate Responsibility Bank of Nigeria came on board to supply this area expands, coordination will be key in
credit lines so that farmers could take out reducing duplication and overlap.
and Sustainability, Olam International
annual crop loans for items such as fertiliser
Introduction had the potential to process much larger and pesticides. Impact
An example of land use planning and quantities of rice. The challenge was two- From the start, Olam’s definition of success
international government co-ordination, Rice fold: funding and farmer training. The latter Credit has traditionally been a major was to make rice production, and the mill,
Nigeria is a ‘transition scheme’ in which Olam was not considered by Olam to be a core challenge for small scale farmers in the area. economically viable. This has been achieved.
is working with partners and suppliers to competency. Crop loans depend on the farmers’ obtaining Rice production is economic and profitable,
bring change from the base up in the insurance against crop failures, droughts, and and the Lobi Rice brand has a good
Nigerian rice supply network. To overcome these challenges, the outbreaks of pests and diseases. Insurance is reputation and sells well. Average crop yields
partnership was expanded. It now includes a major hurdle as insurers traditionally have from farmers in the partnership have risen
The intervention local Farmer Associations, the US Agency for had very little experience of dealing with from 1.5 tonnes per hectare to 4.4 tonnes per
Rice Nigeria began in 2005, when Olam International Development (USAID funding smaller farmers and have considered them hectare, raising farm incomes and
identified a business opportunity and the delivery of farmer training), the State uninsurable. Participation by Nigerian profitability.
purchased a defunct rice mill from the Government (land & fertiliser allocation), First Agricultural Insurance Company in the
Nigerian Benue state government, which Bank of Nigeria (crop finance for farmers) and programme cleared that hurdle. The farmers Olam is now confident that this type of
wanted to privatise some of its assists. the Nigerian Agricultural Insurance Company now obtain credit and insurance in groups of intervention is effective in the long-term. The
Nigeria imports approximately 1.23 million (reducing risk for farmers). Over the following 200 and not individually, so fees and programme has given the company a new
tonnes of rice each year so is heavily exposed two years, the number of farmers grew to operational costs are kept down. With Olam’s perspective on the rice supply chain, moving
to volatility in the international rice market. 12,000, split into groups of around 200 backing, and a tangible market for the from its historical view that the supply chain
The government hoped that corporate farmers each. The programme currently farmers’ crops, the farmers are considered a was about procuring, packing and shipping
investment in renovating the mill would produces up to 70,000 tonnes of rice each safer investment, and the Bank feels more Asian rice to Nigeria, to a view that rice can
support domestic rice production and year for the Nigerian domestic market under confident in the process. be competitively produced locally for the
contribute to its food security agenda. the ‘Lobi Rice’ brand. local market. This programme was Olam’s first
A big challenge is to get farmers on board, foray from cash crops, such as cocoa, into
Olam is currently the third biggest global Approach, challenges and achievements gain their trust and develop their confidence food crops.
player in the rice business, handling in excess Partnership is the driving force of the in the programme. The farmers need to trust
of one million tonnes of rice annually. The programme. Each partner contributes a vital that OIam is going to be there over the long Olam is now building a rice mill in a second
Nigerian rice mill was flagged up as a element without which the programme term, and that the partners are coordinating Nigerian state, and is in the early stages of
business opportunity because of the wider would struggle to continue. The bedrock is across the programme. Trust takes time to replicating the model in Mozambique. Feed
context. Crucially there was already a local the demand for the product, which Olam build – often over three to four growing the Future USA are looking to employ the
demand for rice, which is a Nigerian ‘fast tapped into by purchasing the rice mill and seasons - and requires an understanding of model in other countries, and the
food’. marketing the Lobi Rice brand. This created a local cultural norms. Since the farmer groups programme is being promoted as an
market for local rice farmers to sell their crops deliver the rice direct to the local mill, the example of successful interventions by
An initial partnership was born between to Olam. The state government allocated middle-man is cut out. The rice is sold locally USAID and the United Nations.
Olam and the Benue state government. In farm land for further expansion, and also rather than exported so the farmers (and
the early stages of the programme, the guaranteed fertiliser to the farmers. Giving programme partners) see their own rice For the programme to be successfully rolled
programme directly supported 1,000 local farmers a guaranteed source of fertiliser at a being processed by the mill. Since Olam runs out on a wider scale, it will need to be
rice farmers over an area of 1,200 hectares. It guaranteed government price reduces risk the mill and markets the rice locally, the adapted to the local environments where it is
contracted them to supply the renovated and allows the rice farmers to plan more company develops an ‘everyday’ relationship being deployed. Business opportunities must
mill and helped to establish model farms and effectively for the coming year. with farmers that builds trust in both be identified that will encourage corporate
farmer field schools that provided training in directions. involvement and enable partners to fulfil
crop techniques. Funding by USAID enabled the training to be complementary aims. A strong reason for the
scaled up to include more farmers. USAID’s Rice Nigeria is a standalone on-the-ground success of Rice Nigeria is that it plays an
By 2007 the programme was working well participation also leveraged further partners, intervention. It is not currently coordinated important role in helping the main partners
and Olam wanted to scale it up since the mill helping to support the programme’s with other supply chain interventions as this to achieve their aims. For the State
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Government, this means achieving food challenges from the outset: funding and
security. Local farmers improve yields and farmer training. Farmer training was funded
profitability. USAID can integrate farmers into by a major US Government development
the supply chain, and the First Bank of agency. Difficulties for farmers in obtaining
Nigeria can fulfil its licence to lend by credit and insurance have been overcome by
providing 10 per cent of loans to agriculture. providing these on a group basis and not
individually to keep down fees and
Lessons learnt operational costs. Farmers gained trust and
Rice Nigeria has required both a long-term confidence in the initiative when they saw
view of interventions and company that Olam was committed to working locally,
investment in time and money. Partnerships over time and in close collaboration with its
have been key in kick-starting the project partners. The company took care to
and its expansion to current levels. Local understand local cultural norms so that the
government and farmer groups are working intervention is adapted to local environment
with business to determine the best land use in which it is being deployed.
for the area, helping improve incomes for
local people as well as securing supply for
the business.
Scaling up the intervention had two
2 - Phase one summary report 3
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The interventions have achieved their goals Lessons learnt
SABMiller: Water Futures to date, although SABMiller recognises that SABMiller has faced three main challenges
Communicated by David Grant, Sustainable Development Projects Manager, SABMiller the partnership is still evolving and the with this project.
watershed initiatives will take time. Key to
the successes to date, SABMiller has had to • The nature of the partnerships themselves,.
Introduction Approach, challenges and achievements justify investment in Water Futures to its Partnerships by their nature can be
Water Futures is a partnership between Water Futures identifies water risks and internal stakeholders in the same way that it challenging since they combine different
business, NGOs and government with an implements mitigation strategies, where would any other business investment groups with different objectives.
objective to protect watersheds critical to appropriate, for specific watersheds. It aims decision, thereby ensuring both business Understanding how partnerships work and
SABMiller’s operations and supply chains. At to secure sustainable fresh water supplies buy-in and sustainability of the projects. providing the necessary skill sets have to
the same time, the partners aim to prove the through more effective supply chain be addressed straight away to ensure that
business case for more companies to engage management of freshwater ecosystems, from Partnerships with stakeholders are for an the operations function effectively on the
in sustainable water management. the bottom up. In doing so, it reduces shared initial 3-year period. Ultimately Water Futures ground.
risks for stakeholders (including SABMiller) will only be judged a success if operations on
The intervention from poor watershed management. the ground are sustainable over a long • Lack of data on watershed hydrology and
Water Futures was established in 2009 when period. The project intends to grow existing risk in the area which the project operates.
SABMiller identified risks to its future The intervention is still at the early stage of multi-stakeholder partnerships and build In a number of cases, considerable
operations from the impacts of water scarcity risk identification and has two initial new ones over time. investment in research is required, taking
and wanted to address global frameworks for objectives. First, to identify and reduce time to build the necessary evidence base.
managing freshwater ecosystems. Its water shared water-related risks between SABMiller Impacts of water risk management
risk management projects in Honduras, and other users of the relevant watersheds. projects • The need to work with stakeholders to
Colombia, India and the US had highlighted Second, to increase sustainability of SABMiller started with the understanding understand SABMiller’s reasons for
a lack of global consistency in approaches to SABMiller's operations and supply chains by and commitment that real change takes time undertaking the project. Governments and
fresh water management. The projects had the better management of these watersheds to achieve. Water Futures was, in part, born communities are not used to the level of
also demonstrated that fresh water is not through partnerships out of experience from previous projects that transparency that Water Future discloses. A
sufficiently valued as a resource. SABMiller has been involved in, and the fundamental part of the project has been
The project has three phases: partnership has learnt from these. These to take the time to build trust with project
The Water Futures partnership was initially 1. Water footprinting. Assess shared water projects have shown that it takes time to partners.
established with WWF, and then joined by risk and develop a plan of action at country mitigate freshwater ecosystems risks and
Deutsche Gesellschaft für Internationale and local level produce tangible results. Impacts of the As the Water Futures Partnership develops
Zusammenarbeit (GIZ), a German state- projects can only be evaluated fully - and real into a model for water risk management in
funded sustainable solutions enterprise. To 2. Multi-stakeholder partnerships. Mitigate changes seen - in locations where SABMiller several regions with relative success so far,
explore the shared risk of watershed shared water risk through multi- has been operating for two to three years, could it be replicated in other countries?
management, Water Futures ran six stakeholder partnerships such as in India and Colombia. Expansion is a definite possibility, but the
roundtable discussions between experts in local, individual nature of the interventions
water management and the local water 3. Shared learning. Spread lessons learned to In India for example, a ground water need to be taken into account. The approach
industry. These roundtables were run in other stakeholders in order to influence recharge project introduced by SABMiller is is different for every scenario and research
regions where SABMiller already had major wider change in the affected watersheds producing improved groundwater levels. In before an intervention is a major part of the
operations: South Africa, Tanzania, Peru and Bogota, Colombia, river sedimentation had work.
the Ukraine. The approach adopted has depended on the increased due to run off from surrounding
specific country since that water has very land in which vegetation had been cleared
Water Futures has benefited from the local manifestations and as such must be for livestock. As a result, the cost of municipal
expertise and experiences of both WWF and managed through local stakeholder raw water treatment had risen, with a
GIZ, establishing contacts in the partnership interventions. Stakeholders engaged can resultant impact on the utilities pricing to
countries through their combined networks. vary greatly but would typically consist of users. Through working in partnership with
In addition, GIZ provided matched funding national government, local government, local stakeholders, a project is now well
that SABMiller put into certain water projects, farming communities, industry groups, other underway with farmers to address the runoff
so the scope of the project could be businesses and local communities in the and improve local water quality and thereby
expanded. affected watershed. reducing the associated costs relating to the
resource.
18 - Value chain case studies illustrating different intervention types 19Case Studies:Layout 1 27/06/2011 10:24 Page 20
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