Transparency & traceability
Increased transparency and traceability in the supply chain are crucial first steps to move towards sustainable supply chains. The various nut supply chains are highly complex. Looking at cashew for example, which is being produced by millions of smallholder farmers in Africa and elsewhere. The raw cashew nuts (RCN) are sold via a complex network of local traders who make use of the asymmetric information position that still exists in rural settings. It is difficult for individual farmers to understand the market dynamics and have insight into farm gate prices. As a result, farmers receive low prices and little investments take place. Through this complex network of local traders, no one is able to tell where the cashew came from. There is an amount of anonymous trade and mixing of origins during transport and processing. This way there is no knowledge on what sustainability issues there are in the supply chain.
Data driven improvement
Data collection, data assessment and management of this data are key towards more transparent and traceable supply chains. Data driven improvement tools are important to secure long-term sustainable supply, hence SNI’s efforts to develop a traceability system. A tailor-made software system for cashew, developed by ChainPoint, is available to SNI participants via ComCashew. This system allows buying companies to make informed decisions about their supply base, work on improvement and facilitates the exchange of data between links in the supply chain.
In addition, SNI provides guidance to companies that use their own system. This guidance can be seen as a reference to guarantee that the systems are similar in their set-up and the output they deliver. This supports transparent communication in the supply chain and towards the end consumer, and facilitates the creation of fully traceable supply chains.
Risk based approach
SNI aims to create a risk-based approach allowing current and future sustainability issues to be tackled on a sector level. Starting point is a shared vision on the main risks. A biennially risk assessment of the sustainability risks in the producing countries of a specific nut will help participants to focus on the sustainability risks that are most urgent and to develop a mitigation plan to address the risks in their area of procurement. The risk assessment gives the sector shared understanding of the issues that need to be tackled with priority.
The risk assessment has been executed in 2020 by BSR™ (Business for Social Responsibility™). BSR™ is a global non-profit organisation that works with its network of more than 250 member companies and other partners to build a just and sustainable world. They envision a world in which everyone can lead a prosperous and dignified life within the boundaries of the Earth’s natural resources. BSR™ has experience with agribusiness in Africa and cashew. The risk assessment is supervised by ComCashew, to ensure independence.
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Taking focused action
Based on the risk assessment, each participant of SNI makes an individual plan to work on risk mitigation and continuous improvement. These plans are shared with the secretariat. In the next mitigation plan an overview is given of the results since the previous plan. SNI has developed a clear format for participants to use.