Sustainability and ethics are not issues that every business considers right from the start, but in Julia Gash’s case they were central to every decision. “The initial idea was to create a bag made from natural fibres as an alternative to something that was damaging the environment, like plastic bags,” she says. “However, an early decision was not just to make a product that was sustainable but also to frame that within a business that was sustainable.”
While a move to sustainability was central to Julia’s beliefs, there were other tangible business reasons for the strategy. “One of the first big orders from a large blue-chip manufacturer included a long list of CSR demands,” says Julia, who was keen from the outset to tap a market of top high-street retailers, all of whom wanted a sustainable audit trail. “This made it clear that we needed to see a supply chain that was wholly ethical. So we had to source suppliers that were sustainable as well as ethical.” One such instance included sourcing suppliers that used rain-fed rather than irrigated cotton, and who didn’t overwork or underpay their employees.
Julia’s sought-after customers had a tick-box of ethical and sustainability requirements that included look, quality and price. These customers were also willing to pay more for a product that could prove its credentials. “Ethics and sustainability are not necessarily the first reasons that somebody would make the decision to buy our product, but it’s an added reassurance,” says Julia. “It helps to secure a bigger and wider market and ultimately produces more sales, as it brings added value to the customer.”
Much of Julia’s early strategy was based on gut feeling and market research. However, as with many successful businesses, there was also a little providence involved, as Julia was lucky enough to have timed the launch of BIDBI with that of the government’s Waste & Resources Action Programme (WRAP), which committed retailers to reducing their consumption of plastic bags by around 25% within three years, thus bringing sustainable bags into the public conscience.
A holistic approach
Framing a business around sustainability involves thinking not only about the product but also about how sustainability is applied throughout the business, i.e. how the product is made, the supply chain, and how the business treats its employees. Julia believes that asking employees to sign up to, and understand CSR principles is important. At BIDBI those ethics are announced through their Ethical Commitment statement.
Blue-chip clients with CSR requirements demand an ongoing commitment to ethical values; CSR doesn’t simply disappear once the contract is signed. At BIDBI, Julia and her team must constantly prove the credentials of their supply chain. “Our big blue-chip retail customers require us to regularly prove our audit trail of suppliers, including documentation that outlines our Fairtrade licences, as well as the licences from the factories we work with. Our customers also ask us to be members of SEDEX [supplier ethical data exchange], which gives them the ability to drill down through a database of yearly updated ethical audits.”
Julia and her team are also in constant communication with her suppliers via email, phone and FaceTime. She also makes regular site visits. While this is an extra responsibility, Julia regards the work as time well spent. “Many would think this was a very time-consuming process but it isn’t,” she says. “And by keeping in touch we are assured that the suppliers are working to a sustainable business model.”
Sense and sustainability
Sustainability and ethical trading can bring stability to a business, particularly when you’re trading with an unknown company in a different time zone. However, finding an ethical business to work with was initially a problem for Julia, as they were less common when BIDBI launched in 2007. Julia had to approach businesses through trade associations and the Federation of Indian Chambers of Commerce and Industry. She also visited places where she knew there was a lot of cotton production, and sought out suppliers with suitable accreditations, such as Fairtrade.
Since taking part in a trade mission to New York and Boston as part of Santander’s Breakthrough programme, Julia has received a combination of Santander solutions including Supplier Payments and Invoice Finance to ensure her suppliers are paid ahead of terms. This allows the suppliers to pay their workers a living wage and give them benefits such as longer lunch breaks and holiday pay. As Julia points out, if you have a supply chain that depends on employing cheap labour, that supply chain can also be unreliable. The staff in the business will be overworked, underpaid and under greater pressure. In this instance, the first things to slip are delivery deadlines and the quality of the goods produced. “Being sustainable gives you greater stability because everything is better planned,” she explains. “When people are better paid, you get a better quality of work.” As a result of paying the businesses upfront, BIDBI has few quality issues or problems with goods arriving late. Their relationship with their suppliers is on a much firmer footing than if they paid to terms.
Five business lessons
1) Run a tight ship – Vet your suppliers not just once but constantly. Never let CSR standards slip, as these can be a key selling point.
2) Collect accreditation – Official accreditation such as Fairtrade can provide major marketing leverage as well as ensure customer confidence.
3) Find out who can help – Take full advantage of CSR-related charities, government programmes and national institutions as these can provide valuable guidance and promotion.
4) Make your presence felt – Trade missions and site visits are less time-consuming than you may think and can pay dividends in terms of assurance and broadening your network of contacts.
5) Do well by doing good – Unethical business practices never make good business sense in the long run.
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