Rethinking Supply Chains: Embracing Regenerative Practices for a Better World

Supply chains are integral to the production and delivery of every product and service we consume. These chains consist of a complex network of activities, including extraction, processing, manufacturing, logistics, marketing, retail, consumption, and waste management. Even the simplest products often rely on intricate global supply chains that link various stakeholders across multiple regions.

Each step within a supply chain has a significant impact on both society and the environment. Some of these impacts are positive, such as the creation of jobs and opportunities for skill development. However, many are negative, including environmental degradation, such as deforestation driven by the expansion of rangelands for meat production.

Over the years, there has been increasing pressure on large corporations from governments, non-governmental organizations (NGOs), and consumers to address these social and environmental challenges within their supply chains. High-profile companies like Unilever have faced scrutiny for issues like deforestation caused by palm oil plantations or the overfishing that depletes fish stocks. In response, many companies have begun incorporating social and environmental standards into their supplier agreements. They have also supported multi-stakeholder initiatives, such as the Marine Stewardship Council, to involve and influence various actors across the supply chain.

Despite these efforts, the current approach to supply chain sustainability—often framed as maintaining economic viability while minimizing harm to social and environmental systems—may no longer be sufficient. With the world facing unprecedented social and ecological challenges, a group of global scholars argues that supply chains must evolve beyond merely minimizing harm. Instead, they should focus on actively regenerating and revitalizing communities and ecosystems. This call for a new approach to supply chain sustainability was recently articulated in an editorial published by these scholars.

According to Earth system scientists, humanity is rapidly approaching or has already surpassed several planetary boundaries, which are crucial for maintaining the stability of the Earth’s life support systems. In light of this, the argument is made for supply chains that do more than just avoid negative impacts. The future of sustainable supply chains lies in their ability to be regenerative—designed and managed in ways that strengthen both communities and ecosystems.

To make this shift towards regenerative supply chains, it is essential to challenge some of the long-standing assumptions that have shaped traditional supply chain management. One of the key assumptions is that supply chains should be managed primarily for profit maximization. This focus often leads to practices like large-scale monoculture plantations, which, while efficient, contribute to ecosystem destruction, loss of biodiversity, and exacerbation of climate change. Such practices can also lead to human rights violations and increased social inequality.

Another assumption that warrants reconsideration is the idea that sustainability in supply chains can only be achieved through large companies imposing standards on their suppliers. While setting standards is crucial, research shows that these efforts are often limited by the cost-cutting imperatives of large firms. Moreover, these companies may lack the local knowledge necessary to implement sustainability practices effectively, and their actions can sometimes do more harm than good.

While knowledge about truly regenerative supply chains is still emerging, there are already inspiring examples that point towards promising principles. One such principle is proportionality, which emphasizes aligning the scale and scope of supply chain activities with natural and social limits. For instance, Inversa, a company that markets leather goods made from invasive species, creates supply chains that help protect ecosystems while generating economic opportunities for local communities. Another example is Reyneke Wines, which integrates significant areas of indigenous vegetation into its vineyards. This approach not only promotes biodiversity but also helps control pests naturally.

Another principle is poly-rhythmicity, which recognizes the diverse rhythms of communities and ecosystems. Supply chain managers must respect these natural cycles, whether they relate to agriculture or the social dynamics of local communities. Failure to do so can lead to conflicts and disruptions, as seen in the case of Anglo Platinum’s Mogalakwena mine in South Africa, where a rushed community resettlement led to resistance, grievances, and operational setbacks.

A third principle is reciprocity, which underscores the interdependence between supply chains, workers, and communities. In regenerative supply chains, there is a focus on mutual benefit. For example, Inversa’s supply chain involves local communities in the hunting of invasive species, with economic benefits extending to the sale of the meat. Similarly, Reyneke Wines supports its employees through initiatives like home-ownership schemes, which strengthen their contribution to the supply chain and enhance its resilience.

As supply chains evolve to meet the demands of a changing world, embracing these principles can pave the way for more sustainable and regenerative practices. In
doing so, supply chains can become a force for good, helping to heal and strengthen the social and ecological systems they touch.

Stay updated with the latest in supply chain news at The Supply Chain Report. For free international trade tools, visit ADAMftd.com.

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