Supply Chain Tribe by Celerity January - February 2022

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Trending GL BALLY For mining giant BHP, Blockchain is ‘key to supply transparency’ Leading global resources company BHP has proved Blockchain technology can ease concerns about sustainability and humanrights transgressions in the supply chain. Australia-based mining and metals giant BHP has been piloting Blockchain to maintain high ESG (Environmental, Social and Governance) standards across its supply chains. The technology is already being adopted by the mining industry to trace materials to the mine of origin and make precious-metal investments more transparent. Blockchain helped with Tesla supply chain ESG targets The company recently ran a blockchain pilot in which it traced nickel shipments from its nickel operations in Western Australia to Tesla’s Gigafactory in Shanghai. Nickel is a key ingredient in the manufacture of car batteries. The pilot supported Tesla’s “due diligence on product provenance”. BHP ran a similar trial with rubber sourced for use in truck tyres. A major concern around rubber is whether it has been ethically sourced. BHP procures more than 6,000 giant tyres a year. Natural rubber carries a high-risk of modern slavery and illegal deforestation for supply chains. BHP was keen to see if Blockchain could mitigate such risks, by helping the company trace rubber from its source through the supply chain. She revealed the trials - which have been running for the past two years - were successful.

BHP will use Blockchain on copper value chain. BHP will run similar trials with suppliers, focused on tracking products from manufacturing to fitment, before expanding further down the supply chain. The company also plans to use Blockchain tech to trace emissions from copper used in electric cables and wires. While ensuring a more ethical supply chain, blockchain can mitigate against supply issues, as well as supporting decarbonisation initiatives by tracking greenhouse gas emissions. A BHP spokesperson said that customers increasingly care about where products come from and to this end, traceability is a key enabler to lifting sustainability standards across the value chain.

Walmart adds science-based targets to supply chain financing option

In its announcement, Walmart noted new research from HSBC and the Boston Consulting Group, which found that as much as half of the $100 trillion of investment by 2050 to achieve net-zero across global supply chains needs to come from small and mid-sized businesses. But those businesses often don’t have the in-house climate expertise and access to capital to tackle sustainability goals, the report noted. Walmart is taking the cue from the research findings

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that larger corporations need to "provide liquidity and share knowledge and resources with smaller businesses." To get access to the retailer's Sustainable Supply Chain Finance program, suppliers have two options. They can set science-based targets that will get validated by the Science Based Targets Initiative, a joint venture between CDP, the United Nations Global Compact, the World Resources Institute, and the Worldwide Fund for Nature aimed at improving companies’ work to reduce greenhouse gas emissions. Or they can meet certain score thresholds on their CDP climate change reports. Financing for eligible suppliers with Walmart-approved invoices is linked to their CDP scores, targets and reported impacts, with lower pricing linked to more ambitious efforts, per the announcement. Walmart has been working with HSBC since 2019 on the retailer’s Sustainable Supply Chain Finance program. The financing program announcement is the latest one by Walmart to advance its sustainability goals. The retailer is targeting zero emissions across its global operations by 2040.


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