This CBI report highlights that businesses not effectively managing the social and environmental costs embedded in their supply chain expose themselves to considerable risk. Such companies are likely also missing a chance to enhance their competitive advantage through cost savings, innovation, predictable and secure access to raw materials and improved global and local reputation.

Supply chain efforts promoting sustainability and corporate social responsibility programs for the sake of PR are increasingly insufficient alone. In fact, companies that advertise their CSR programs are at greater risk for scrutiny and criticism. Today’s changing global environment requires businesses to interact with their supply chains using a Mutual Gains Approach (MGA) to stakeholder engagement. Companies need raw materials, governments need foreign investment and communities need jobs, arable land, potable water and shelter. Finding a way to meet these interests simultaneously on a planet with dwindling resources requires a new way of doing business.

MGA seeks to address stakeholder needs and interests proactively, and seek stakeholder commitment to jointly improve environmental and social sustainability, while creating tangible business value. By adopting such an approach – via engagement with suppliers, national regulators, communities, workers, and local governments – global, resource dependent companies can more effectively respond to three critical questions:

  1. In a context of increasing global resource constraints, how do you control costs and maintain competitive advantage?
  2. How do you better anticipate and constructively manage supply chains and prevent disruptions (community protests, land tenure issues, etc.) and maximize opportunities for improved relationships?
  3. How, and with whom, should you maintain and strengthen your social license to operate in a given country when you have a global supply chain across multiple commodities, multiple countries and varied geo-political contexts?

This report answers these questions and shows how business must rethink the business case and adopt the new toolset of MGA to to build trust by identifying and leveraging opportunities for collaboration where companies, their suppliers, and their stakeholders share overlapping interests; and to reduce and mitigate conflict where interests and concerns compete. The authors highlight six global, cross-sectoral case studies that showcase the efficacy of adopting the MGA approach in supply chain management.