The greening of commodity supply chain ensures consistency with China’s vision of building an Ecological Civilization and the concept of building a community with a shared future for mankind. Developing greener and more inclusive commodity supply chains is an effective means to assist Belt and Road Initiative (BRI) participating countries to address challenges and strengthen supply chain safety and security, and will be key to delivering a green Belt and Road.
The “Green Commodity Supply Chain Index” is a tool developed to help Chinese governments, companies, and financial institutions (including those involved in the Belt and Road Initiative or “BRI”) assess the relative risk to the long-term security and stability of a soft commodity supply chain posed by major environmental and social factors. The Index indicates the degree of risk—categorized as either “high”, “medium”, or “low”—within a jurisdiction (a geographic or political boundary) that is the source of the commodity. It also indicates which environmental and social issue(s)—the components or “indicators” within the Index—might pose the biggest risk(s) to supply security or stability. The Index helps decision-makers know what level of further due diligence and due care they should take when investing in soft commodity projects or entering into sourcing contracts for soft commodities. Use of the Index has the potential to improve the stability and security of supply chains, reduce material risks to operations and contracts, and help improve overall supply chain sustainability.
This report is the output of Phase I research of the index, aiming at establishing the indicator system and the methodology for composing the index. The report is open for comments. For the next Phase of the work, the team will collect feedback and comments, further improve the methodology and pilot the index for selected areas, commodities and users.
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