Looking back on the past year and looking forward to the years to come, there is increasing corporate attention to “the first mile.” The opposite of “the last mile” as it is used in the technology industry for the final connectivity to customers, the first mile signifies the initial origin of the raw materials that ultimately become our products, services, and energy. This is the very beginning of the supply chain and there are several reasons that have made it historically easy to ignore and that make it increasingly important for the future. In the past, companies and our economy could grow through increasing production volumes and making products cheaper. The expansion economy may be coming to an end. The new report from McKinsey “Resource Revolution: meeting the world’s energy, materials, food and water needs” is a great example of the increasing realization that humans are filling up the planet. We are moving from a past of perceived limitless expansion towards a future of necessary efficiency. This is especially urgent at the first mile where conflict over land and water impact the lives of billions and causes resource price and supply risks for major companies. The past ability of companies to simply increase production to grow is turning into the need to transform their use of resources.
In the first mile we find soils, water, forests, mountains, prairies, lakes and the ocean. Communities of farmers, loggers, miners, and indigenous peoples living in the first mile have often suffered as a result of decisions taken miles down the supply chain. As land, energy and water resources become even more constrained, global companies are increasingly paying attention to what occurs at this distant end of the value chain. It increasingly matters to their operations, reputation and financing, with concerns about conflict minerals and ecosystem services  becoming increasingly central. Nestlé’s no deforestation policy shows an interesting response to a combination of internal strategy and external (NGO) reputational risk pressure. The emerging nexus of food-fuel-fiber-water touches such a complex range of environmental and societal issues that large companies can no longer pass on the responsibility to their distant suppliers – they must become more engaged and accept their responsibility all the way back down the value chain to the first mile.
The water crisis that looms or is already present in many parts of the planet poses a real concern to companies sourcing water-demanding raw materials in these areas as conflicts over food security, health, and human rights travel up the supply chain through advocacy, faster communication, and social networks. The good news is that large companies have power and are developing more effective tools to manage distant supply chain concerns. They are leveraging their power to protect their reputation and avoid supply interruptions and pricing spikes. The Sustainable Apparel Coalition is a great example of companies working together to address sustainability issues far down the chain, and a great example of the growing attention to sustainability concerns within the fashion industry. In fact, a growing range of industry roundtables indicates a promising approach to solving shared issues at the first mile.
The first mile is where the rubber hits the road in terms of impacts and dependency on ecosystems, watershed quality, mining impacts, health and livelihoods for literally billions of people. The sound management of our land and water resources is essential for our continued global prosperity and corporations seem poised to take responsibility as it is in theirs and all of our interest.
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