Sustainability in Global Value Chains

von Peter Hefele

International Conference

An international workshop, jointly organised by KAS RECAP, Hinrich Foundation and German Economic Institute Cologne (IW), on Sustainability in Global Value Chains took place in Hong Kong on 14 November 2018. It facilitated a productive cross-sectoral and cross-continental debate on the role of different stakeholders and the legal framework surrounding sustainable value-chains and trade practices on a global scale.

Following welcoming remarks from Kathryn Dioth, the Chief Executive Office of Hinrich Foundation Hong Kong, and Dr Peter Hefele, the Director of KAS RECAP Hong Kong, Stephen Olson, a research fellow at Hinrich Foundation presented the key findings of the 2018 Hinrich Foundation Sustainable Trade Index SDI. Despite increasing efforts, a broad regression in sustainable trade practices can be noticed, in particular among richer economies, while several middle-income countries perform well. Improvements in the economic pillar had ben offset by backsliding on social and environmental indicators.

Session 1 followed and was chaired by Eileen GALLAGHER, the Manager for Climate Change at BSR (Business for Social Responsibility) Hong Kong and focused on the experiences and challenges faced by companies when greening supply chains. The panellists included Frank HAUNERT, Vice President, Direct Procurement, BASF Asia Pacific, Amie SHUTTLEWORTH, Global Director of Sustainability, Cundall, Prof Dr Jörg S. HOFSTETTER, President, International Forum on Sustainable Value Chains (ISVC), and Björn WAHLSTRÖM, Partner & Director of Operations, Current Consulting, Hong Kong. A key insight provided by the panel discussion was that sustainability is becoming increasingly important to investors, thus strongly incentivising the creation of more sustainable supply chains. Furthermore, the reconfiguration of supply chains can have a significant impact on climate change, although certain large actors with vested interests do at times dissuade policy changes. 

Session 2 focused on the questions of whether sustainability will be a driver for future growth and what drives transformation. After a presentation by analyst Derek WU from GlobeScan centred on how aspirational consumers among “millennials” influence the behaviour of companies, a discussion was kicked off on how civil society and technology influence supply chain transformations. The session was chaired by Berenice VOETS, the Director of Marketing and Communications, Hinrich Foundation and included the panellists Derek WU, Allisa LAU, Regional Manager, China Supply Chain and Consumer Marketing, Cotton Council International, and Yam Ki CHAN, Head of Public Policy, Google.

How effective can international regulatory frameworks for sustainable supply chains be? The focus for session 3 was whether supply chains needed more government regulation or industry self-regulation. Being chaired by Robert Agnew, Chairman of the European Chamber of Commerce, panellists by the likes of Joyce Chau, the Asia Pacific Regional Director of Amfori, gave insight into how sustainable supply chains can be improved through collaborations with stakeholder advisors and their help with driving responsible supply chains. Karen Ho, Head of Corporate and Community Sustainability for WWF Hong Kong, gave a presentation on the successes of WWF Hong Kong’s Low Carbon Manufacturing Program and that companies should increase transparencies for supply chain carbon emissions. Dr Nadira Lamrad, Assistant Director for Sustainability from the Business Environment Council, and Andrew Schroth, Co-Vice Chair for the Global Apparel and Footwear Trade Initiative, furthered the discussion with insights on the complex sustainability outcomes arising from the incorporation of standards and regulations in GVCs.

The workshop was wrapped up by concluding remarks by Dr Hubertus Bardt, Managing Director from the German Economic Institute of Cologne and talked about how trade can promote sustainability in international agreements and what policymakers and businesses can do regarding greening global value chains.

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