There is a great deal of discussion surrounding “impact investing” at the moment.
At its core, impact investing aims to provide financial fuel for enterprises that solve a pressing social problem or an industry gap, and generate prosperity for investors while doing so. “Impact sourcing” aims to achieve the same results but via socially responsible sourcing of products and services.
While most any international company deals with the logistics of supply chain, impact sourcing recognizes the dynamics of its “values chain.” Trace the process that lies upstream in the making of any product—the where, who, and how of the production. At each stage of that process, an economic value is assigned to extraction of commodities and the labor of producers. That distribution of economic value represents its values chain.
Impact sourcing aims to shift the embedded values chain of a product or service, and it does not depend on the launch of a new enterprise or even a venture investment to do so. Arguably the most efficient and effective path for impact occurs when a company with an established supply chain alters its sourcing or manufacturing to create opportunities for excluded or exploited communities.
Over the past several years Not For Sale has engaged major apparel and food retailers on their supply chains and offered viable options on impact sourcing. Frankly, up to this point our achievements have been disappointing. Even though we can demonstrate to these companies the social benefits of sourcing differently, enterprises consistently make supply chain decisions based solely on the financial costs of production, even when those costs differentials are relatively insubstantial.
I would argue that the hard costs of production are not the only criterion that should determine a supply chain. Companies ought to consider the costs of switching suppliers, due to the instability that may come with choosing the “cheap” price on extracting commodities or manufacturing. Quality control, reputation risk, and the marketing value of telling “the story behind the barcode” should be considered as well. Admittedly, sufficient data to build a strong case for the foregoing is lacking.
REBBL was designed from its beginning around impact sourcing. REBBL stands for “roots, extracts, berries, bark, leaves,” and its formulas emanate from traditional healing herbs sourced from around the globe. REBBL has a determined mission to elevate your health with life-giving botanicals. Yet REBBL also aims to help create jobs and support social economies in regions of the world where labor exploitation thrives.
How will we achieve this kind of real, global social impact?
We believe the first step is to truly understand the realities of the grower communities at the source of our ingredients. Through in-field research studies, we will collect baseline data across multiple social, economic, and environmental indicators. In doing so, we will have data-driven insights into the real needs of each community. This will help us determine how to best support and empower a community, and in doing so, measure our social impact as REBBL grows.
This year, we launched the Impact Through Sourcing initiative in collaboration with UC Berkeley, Not For Sale, and Just Business Fund. Using a research tool developed by the International Fund for Agricultural Development —IFAD is a specialized agency of the United Nations dedicated to eradicating rural poverty in developing countries— we are first focusing on our coconut sugar source. We are very excited to announce that the first phase of our report will be published this fall, and we will be on-the-ground in Indonesia in 2017.