For over three decades, Dilmah has transcended its identity as a mere tea company, embodying a philosophy articulated by its founder, Merrill J. Fernando, who stated, “Business is a matter of human service.” This guiding principle has informed every strategic decision, from tea cultivation to community engagement. Recently, this philosophy has ushered in a significant milestone, as Dilmah Ceylon Tea Company PLC has been invited to become the Patron of the Supply Chain Working Group of the UN Global Compact Network Sri Lanka (Network Sri Lanka).
This invitation underscores Dilmah’s leadership in redefining supply chains as ecosystems of fairness, transparency, and responsibility. It also highlights the company’s dedication to embedding sustainability in every facet of its operations, from Sri Lankan tea fields to global consumers.
Building Ethical and Responsible Supply Chains
Dilmah’s supply chain is both local and international. Within Sri Lanka, the company collaborates with trusted partners for sourcing tea, herbs, flavors, and packaging materials, while internationally, it works with reputable suppliers for specialized inputs and machinery. This strategy ensures quality, compliance, and alignment with international standards. Notably, 79 percent of Dilmah’s suppliers are based in Sri Lanka, reflecting its enduring commitment to local communities. In the fiscal year 2024/25 alone, 71 percent of its supplier expenditure—equating to Rs. 14,494 million out of Rs. 20,440 million—was allocated to local businesses, reinforcing its pivotal role in the national economy.
For Dilmah, supply chain sustainability is not just an operational objective but is deemed essential for business continuity. With over 85 percent of the company’s Scope 3 emissions stemming from its value chain, transforming supplier relationships into vehicles for climate action and ethical business practices is both a responsibility and a necessity.
Supplier Assessments and Accountability
Dilmah has established robust systems for evaluating and engaging suppliers to facilitate this transformation. The Supplier Capability Assessment Form is pivotal in supplier selection, demanding compliance across diverse criteria—ranging from business ethics and labor standards to environmental requirements, food safety, quality assurance, and brand protection.
Suppliers undergo biannual reviews based on a marking scheme developed with input from key departments, and an annual Supplier Sustainability Self-Assessment is used to measure and rate performance. Where gaps are identified, suppliers receive support, including extended timelines, mentoring, and follow-ups until they meet the required standards.
This approach reflects Dilmah’s belief in strengthening supply chains through collaboration rather than exclusion. As Rishan Sampath, Head of Sustainability and Conservation at Dilmah, explained, “Our approach to supply chains is the same as our approach to tea. It must be authentic, ethical, and respectful of the people and ecosystems that sustain it. A supply chain that is purely transactional cannot endure—it must also be transformational.”
Stronger Together: Supplier Development
To instill sustainability across its supply network, Dilmah launched the Stronger Together initiative—a supplier sustainability roadmap designed to raise awareness and build capacity. This program aids suppliers in areas such as decarbonization, humanitarian action, and compliance with global sustainability requirements, while also providing targeted financial and technical assistance.
The initiative has progressed in phases. Phase 1 involved a series of supplier conferences tailored to key supply chain segments. Sessions included a July 2023 engagement with packaging suppliers on sustainable packaging innovations, a December 2023 session with the tea sector on climate resilience and ethical labor practices, and a February 2025 forum with partners in ingredients, logistics, and other areas to address global regulations and cross-cutting sustainability challenges.
Phase 2—Stronger Together 2.0—builds on this foundation, focusing on implementation. It provides practical tools and training across ESG pillars, from carbon footprinting and waste management to human rights and anti-bribery practices. Training sessions also cover compliance with emerging standards such as the new EU sustainability regulations. Suppliers receive additional support for decarbonization projects and humanitarian efforts, particularly in the tea sector. To promote transparency and peer learning, an online platform is being developed where suppliers can interact and showcase their sustainability stories.
Recognition of Leadership
Dilmah’s dedication to sustainable supply chains has garnered international recognition. The company was named a finalist at the Reuters Global Sustainability Awards 2025 in the Net Zero: Supply Chain Decarbonization category, making it the only Sri Lankan brand acknowledged at this level. This accolade reflects Dilmah’s ambitious, science-based climate commitments, validated by the Science Based Targets initiative (SBTi), and its leadership in driving supplier-level decarbonization.
Scaling Impact with Network Sri Lanka
While Dilmah’s internal programs set a high standard, the company’s ability to influence broader change is amplified through its collaboration with Network Sri Lanka. The Supply Chain Working Group offers a platform for collaboration, shared learning, and collective action, enabling Dilmah to align with global frameworks while strengthening local practices.
“Through Network Sri Lanka, we are not just advancing our own practices—we are part of a larger movement,” said Rishan. “The Network connects us with peers across industries, fosters shared learning, and helps us benchmark against global frameworks. That context is invaluable in ensuring our efforts have both local relevance and international credibility.”
As Patron, Dilmah is helping to catalyze progress in responsible sourcing, human rights due diligence, and decarbonization within supply chains. Its vision is not only to elevate standards within its operations but also to inspire and empower others to follow suit.
The Road Ahead
Looking forward, Dilmah is committed to developing resilient and regenerative supply chains—those that support farmer livelihoods, enhance smallholder climate adaptation, and ensure dignity and fairness for workers at every stage. Integrating renewable energy, reducing waste, and scaling decarbonization efforts across the supply network remain priorities.
At the core of this journey is the enduring principle that business exists to serve humanity. By embedding this belief into its supply chain fabric—and by collaborating with Network Sri Lanka to translate global principles into local impact—Dilmah is contributing to the creation of ethical, transparent, and resilient supply chains. Through its efforts, the company continues to uphold the Ten Principles of the UN Global Compact—from advancing human rights and fair labor practices to protecting the environment and fostering integrity in all business dealings—ensuring a future where commerce and compassion move hand in hand.
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