Private sector boss calls for focus on sustainable supply chains

TThe head of the Barbados Private Sector Association has suggested using sustainable supply chains to meet the UN Sustainable Development Goals (SDGs).

Speaking on Wednesday evening at the launch of the UN Global Compact Network Caribbean and its Sustainable SMEs and Supply Chain Programme, Tricia Tannis noted that two-thirds of large companies’ environmental, social and governance (ESG) impact rests with their suppliers.

“SMEs are not a marginal group,” said Tannis. “They dominate 75 to 80 percent of businesses in the Caribbean and represent approximately 50 percent or less of global trade. Therefore, they are an important ingredient that we need to take into account.”

The business leader suggested focusing on aligning sustainability goals with the company’s profit motives, which also required drawing a clear line between sustainable practices and corporate profitability. To this end, she called for the SDGs to be linked to board goals to make it clear how sustainable practices can deliver financial benefits.

She stated: “Virtually no one is hiring staff, opening physical stores or e-commerce to achieve the 17 Sustainable Development Goals. They do it to get a return on investment, they do it to make a profit, so if we don’t draw a linear line between meeting the SDGs and the ten pillars that come from the SDGs, we will continually lose our audience. . . so one of the first things we need to do after today’s launch is to continue to map the sustainability goals to the board’s goals. I suppose it sounds terrible to this audience. It’s shocking that companies actually focus on profit. This is truly shocking, but this is the pragmatic reality.

“OK, we have just launched a global agreement that focuses primarily on engaging profit-first companies. The question is: how can we sustainably generate returns that are fundamentally in line with our goals? And if we can’t actually show them the benefits of doing this and how it translates into a profit agenda, we run the risk of losing our audience again.”

Tannis offered three key suggestions for advancing the sustainability agenda and supporting small and medium-sized enterprises (SMEs).

First, raising awareness of the SDGs among SMEs, as there is a “general lack of awareness in Barbados and the region” about the global compact. Tannis said efforts need to be made to “speak the language of SMEs” as many of them define sustainability as “survival” after the pandemic.

“We need to find a way to appropriately align the messaging… and ensure that the program is connected… to where they are today, not the other way around,” she said.

Second, aligning SDG goals with company profit motives by mapping goals to “boardroom goals” to show how sustainable practices impact financial performance.

“If we don’t draw a straight line between meeting the SDGs… and how that translates into a profit agenda, we risk losing our audience again,” Tannis warned.

Her third suggestion was to explore UN Compact-based financing options such as “data-driven financing and incentive-based financing” to benchmark SMEs around the world and demonstrate greater shareholder value from sustainable practices in other regions.

She said: “I would recommend that we look at panel and data-based funding and the creation of an incentive fund so that we can help draw the straight line I mentioned earlier. We can help say globally that this is how we compare SMEs around the world and although this is the first deal in this country, the deal has been rolled out globally and there is enough data at this stage to be able to demonstrate the benefits through international benchmarking of what what happened in other countries and regions in terms of what happened with this earnings program and how it delivered benefits and increased shareholder value.”

She added that by showing how sustainable practices have increased shareholder value in other regions, SMEs can be convinced of the tangible benefits. (RG)