Danish Sustainable Sourcing: Raw Materials, Supply Chain, Transport

Denmark has carried out a series of measures to ensure the sustainable sourcing, which cover raw materials, supply chain, and transport.

When talking about sourcing, the first thing that comes to our mind is the raw materials. Danish companies have the awareness to reduce the consumption of materials used for production, so that less unnecessary waste will be produced in the producing counties, and less energy and resources will be consumed. In addition, Danish companies are finding suppliers who are capable of adopting new technology to reduce greenhouse gases emissions. The technology mentioned here can refer to relying on alternative materials for reduction of waste and pollution. To facilitate companies to select greener raw materials, Life Cycle Assessment (LCA) center offers comprehensive services to develop companies’ life cycle thinking and life cycle assessments ability.

In terms of supply chain, the Danish government supports and guides companies to implement sustainable supply chain management by developing CSR Compass website. The CSR Compass lists the requirements of sustainable supply chain, suggestions on choosing responsible suppliers, as well as standards and principles should be adopted by companies. As a result, when Danish companies are choosing the suppliers, they will consider questions like where are the raw materials produced, whether the products are produced in a clean environment and with high quality, as well as whether the workers’ rights can be protected during the production. Apart from fulfilling these requirements in CSR Compass, Danish companies also add climate factor into consideration. In other words, they selectively cooperate with the suppliers that can or will reduce CO2 emissions, which is in accordance with the Danish climate strategy. These companies have the awareness that they can have considerable impact on suppliers, thus they are capable of requiring suppliers to do business is a greener way.

In sourcing sector, transport should take into account people, goods, and equipment. A green transport process, which involves energy consumption and greenhouse gas emissions, is indispensable for sustainable sourcing. In terms of energy consumption, Denmark has developed technology to replace traditional fuel. For instance, when the raw materials or good are transported inside Denmark, the traditional diesel-consuming vehicles are replaced by electrical-charged buses to reduce pollution. In terms of greenhouse gas emissions, CSR Compass divides transport activities into two parts – company-owned vehicles and contractor-owned vehicles. Carbon footprints of the companies will include both kinds of vehicles, so companies bounded by emissions quota should seek ways to reduce carbon emissions during sourcing transactions and fulfill the carbon reduction requirement, which indeed promotes greener international sourcing.

Danish Fashion Industry: Model of Sustainable Development

Denmark is the pioneer in sustainable fashion. It leads the fashion trend while pursuing the goal of sustainable development. This pursuit is supported collectively by the fashion industry, the fashion institute, and the designers, thereby strongly influencing the pattern of Danish global sourcing.

The Danish fashion industry plays its significant role in sustainable sourcing as it emphasizes to combine Danish design heritage at a “fair” price instead of the lowest price. Apart from the industry consensus, the authority also plays an important role in promoting the sustainable idea. Industry For example, Johan Arnø Kryger, who works at the Danish Fashion Institute, initiates the notion that competition should not be based on price; rather, it should be based on quality and sustainable design. What the institute advocates to the public is the urgency and necessity of shifting the traditional trading model to a green development model.

Positively influenced by its national value (equality and mutual help), Danish designers have the conscience of becoming the green growth pioneers, and they advocate sustainable development of garment industry. For example, the designer Peter Ingerwersen developed two brands – Noir and Illuminati II.  Noir acted as the first group of brands to adopt ethically produced and organic fabrics, which were supported by high income consumers to avoid sweat shops exploitation. This sustainable trade mode serves as a good option for other brands. Illuminati II selectively cooperates with eco-friendly fabrics producers, which prohibits the exploitation of underprivileged workers.

Danish Agriculture: Pursuing Sustainability

Denmark not only leads the trend of sustainable fashion, but also does a good job in agriculture. For example, Grøn Fokus, one of the “leading total suppliers of organic products to the Danish supermarkets, caters, hotels and restaurants”, supported and participated in the Sustainability Initiative Fruit and Vegetables (SIFAV) Program, which aims to realize the 100% sustainable target of the fruits and vegetables imported from Africa, Asia and South America by 2020. If this target is achieved, a great portion of the fruits and vegetables consumed in Denmark will be “responsible”, as it ensures the yield of farmers, quality of the products and protection of environment.

Conclusion & Implications

Danish serves as a leader in sustainable sourcing, which involves raw materials, supply chain, and transport selection. The sustainable notion is shared throughout the nation and industry, and supported by the official government. This notion might trace back to Danish traditional culture and welfare system, where citizens are intertwined and show care with each other. This characteristic naturally develops Danish’s awareness of equal trade and sustainability of growth.

To learn from Danish sustainable trade and sourcing, we can develop sustainable sourcing together with the help of the industry, the government institute, the designers and the consumers. Moreover, we should keep in mind that sustainable sourcing covers several processes, from raw materials selection, supply chin monitor, and transport management. We should take into account all these aspects if we want to make sourcing process sustainable.

About the author – HUANG Huiying (Ivy)

HUANG Huiying (Ivy)

HUANG Huiying (Ivy) is a Hinrich Global Trade Leader Scholar pursuing for her BBA degree in Hong Kong Baptist University. She has been a scholar studying Global and China Business since September 2015. She is undertaking her work placement at Fung Global Retail & Technology until December 2016.