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3M: Taking control of a complex supply chain
3M: Taking control of a complex supply chain
News Apr 13, 2018

As of January 2019, TFT has become Earthworm Foundation.

A few moments after 3M presented at a conference about how business can tackle deforestation, they were approached by one of the audience, who, inspired by how 3M had taken responsibility for its complex supply chain, said: “We want to do exactly what you’re doing.”

Eighteen months earlier, it was a different story. With an outdated policy, 3M was on the receiving end of two NGO campaigns focused on its sourcing of pulp and paper. The campaigns highlighted policy weaknesses, as well as 3M’s sourcing from sensitive regions of the Canadian Boreal and from a couple of specific controversial suppliers. As a large manufacturer with 90,000+ employees in 70 countries, 3M wasn’t clear what was really happening on the ground related to the pulp and paper it was buying for its products, including the iconic Post-ItTM note.

With the NGO campaigns honing in mostly at the forest level, 3M found itself in a frustrating position. As neither an owner nor a manager of forest land, how could it start to have influence with suppliers, and how could it gain transparency of a vast global supply chain? When TFT talked with 3M personnel for the first time in 2014, they were naturally very keen to understand the NGO concerns. Previous attempts at dialogue had resulted in little progress, with both sides seemingly speaking a different language.

What do you really want?

TFT helped coach 3M on stakeholder communications and educate them on the issues the NGOs were concerned about. This enabled 3M to have informed discussions on those issues with the NGOs to better understand their position.

We encouraged 3M’s leaders to take a step back and think about what they really wanted for their pulp and paper products and relationships. That might seem like an untimely detour given that NGO campaigns were underway. But reflecting on values led to the creation of a new Pulp and Paper Sourcing Policy that didn’t just respond to NGOs; it was something 3M was passionate about, truly owned and felt driven to implement.

3M leaders felt that an ambitious, values-based policy backed by a credible sourcing programme would help address NGO concerns. Just as important, the policy had the potential to help the company become a leader in this space. By the time the policy was released, both NGOs voiced their support for it and ended their campaigns.

For the past three years, 3M and TFT have worked together to develop and implement the Pulp and Paper Sourcing Policy. For its part, TFT brings global expertise in supply chains, forestry and regional environmental and social issues affecting forest products. TFT’s actions include conducting desktop risk assessments of 3M’s global supply chain, field assessments of targeted priority suppliers and helping to develop tools and processes that support policy implementation.

Influence with suppliers

3M was clear from the start that its suppliers should share the responsibility for achieving the goals outlined in its policy. The core policy elements include legal harvest, traceability to forest and responsible environmental and social practices. The message to direct suppliers and pulp and paper mills is: “We’re taking responsibility, but this is your supply chain too. We should all be doing this together.” Pushing responsibility and expectation upstream, through all tiers of the supply chain, meant communications with suppliers would be more impactful. 3M has engaged its direct suppliers to inform them about the policy and how the process works. Direct suppliers are all asked to provide information about their own programmes and about their supply chain, allowing 3M to see where their products come from and how they are sourced.

Another important part of the programme was 3M’s desire for suppliers not just to take responsibility, but to create their own sourcing policies and due diligence systems. For this to work, suppliers must understand the issues and the ways to tackle them. In the first 18 months of the programme, TFT provided awareness training to key groups of suppliers, informing more than 70 supplier companies about global pulp and paper industry issues, and how the 3M policy and programme looks to address those issues in their supply chain. This training helped to lay the groundwork for further engagement and collaboration between 3M and suppliers, which, in turn, led to better information sharing about suppliers’ own programmes and how well they match 3M’s expectations, as well as streamlining how supply chain traceability data is collected.

Listening to science

When the NGO campaigns raised questions about 3M’s sourcing from the Canadian Boreal region, 3M was not in a position to critically evaluate the NGOs’ claims. But given 3M’s roots in science and engineering, it’s perhaps not surprising that the company lost no time in studying the scientific information that would allow them to better understand the issues. Concerns about forestry in the Canadian Boreal are complex – there are strong regulations and government oversight, but there are impacts from forest operations on threatened caribou populations and, in some places, conflicts with indigenous First Nations communities. So in late 2015 TFT arranged a trip for 3M executives to meet with caribou scientists and First Nations in Canada. Lessons from the trip were immediately applied to sourcing decisions and supplier engagements. When TFT and 3M recently conducted a priority supplier assessment in Boreal Canada, 3M staff used the knowledge they had gained to actively engage with their supplier and make a greater impact on the process.

Building staff awareness and capacity

How do you make sure an important message is communicated in a coherent way to staff across the world? It was vital that 3M staff, particularly those who make supplier decisions, understood and supported the new policy. 3M has tackled this priority by building a strong, cross-functional team to lead the work, with support from senior leadership. Representatives from sustainability, procurement, supply chain and businesses all play a part. TFT has worked with 3M to deliver training for over 200 key employees who interact regularly with 3M’s pulp, paper and packaging suppliers in different regions around the world.

But this training is just a starting point. Since 2015, TFT has been conducting field assessments of select 3M suppliers measured against the policy. On each of these visits, 3M regional staff have joined TFT for the assessments and any relevant stakeholder meetings. This provides them with a first-hand view of what is happening in the forests and in neighbouring communities, what challenges suppliers face, and what positive steps some suppliers may be taking. From China to Sweden and Brazil to Canada, these assessments build 3M capacity. They also build each supplier’s capacity to understand how to meet 3M’s expectations, and serve as a foundation for further collaboration between 3M and suppliers.

Tackling the traceability challenge

3M’s new Pulp and Paper Sourcing Policy states that suppliers are expected to ensure and verify that wood fibres are harvested in a way that:

  • avoids deforestation including protection of high carbon stock forests;
  • protects high conservation values such as critical habitats, intact forest landscapes, and peatlands; and
  • respects workers’ and indigenous peoples’ rights.

This image shows how traceability back to source can be a challenge:

In some cases 3M buys paper as a raw material to use in 3M’s own manufacturing operations, in other cases 3M outsources manufacturing to other companies that buy paper and make the finished product on 3M’s behalf, and the company also buys paper-based packaging. This represents a potential maze when you consider that these companies are sourcing far and wide.

A way through this maze is making sure that for each supplier and supplied material, 3M is gathering detailed information to evaluate legality, traceability, third-party certification status and overall policy conformance. This takes time but ultimately gives 3M the data it needs to get a clear picture.

Gaining traceability is not an overnight job for a supplier either; they may need to go through several layers of their supply chain to find more information on the source of harvest. They can face location and language barriers, limited knowledge of upstream operations, and their position in the supply chain might not give them the greatest leverage. 3M works closely with the suppliers to help them navigate these issues. They support suppliers to develop their knowledge of responsible sourcing and forestry practices, understand their supply chains and set reasonable goals. These discussions have brought stronger partnerships with suppliers, with many developing their own responsible sourcing policies. Now, just over three years since the policy was launched, nearly 85% of 3M’s pulp and paper supply chain is traceable to mill or forest source.

Looking ahead

Today 3M is regarded as a leader in responsible sourcing – a company that takes its considerable influence seriously and whose work with suppliers has helped foster responsibility across the supply chain. Taking time to align with its values, listen to NGO concerns and work through complexities with suppliers means 3M is well prepared for the future.

Related News:

Areas of work:
Healthy Forests

Pulp & Paper


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