Can businesses police the behavior of global suppliers?
Under pressure from a growing movement of activists determined to make supply chains more ethical, businesses that once disclaimed responsibility for their overseas suppliers' behavior are re-examining that stance. Companies are scrutinizing the supply chain on questions ranging from environmental standards and product safety to the treatment of workers. Some businesses are adopting corporate responsibility codes, while others are wielding new technologies to enhance transparency. As they try to meet this challenge, companies are confronting numerous obstacles, including far-flung supply chains and regulatory standards that vary by country. But the consequences of failure can be high: Bad news about a company's supply chain can damage reputation, depress sales and alienate investors—and the negative reviews can spread quickly in today's hyperkinetic information environment. These are among the issues companies and their critics are debating: Do ethical supply chains enhance profitability? Is it possible for a company to ensure its supply chain is ethical? Are voluntary standards, industry certifications and governmental regulations doing enough?
Henderson, Hazel, “Ethical Markets: Growing the Green Economy,” Chelsea Green Publishing, 2007. An economist who owns the media company Ethical Markets Media outlines the history of ethical business.
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Locke, Richard M., “The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy,” Cambridge University Press, 2013. Brown University's provost evaluates enforcement of fair-labor standards in global supply chains.
Morrison, John, “The Social License: How to Keep Your Organization Legitimate,” Palgrave Macmillan, 2014. The executive director of the Institute for Human Rights and Business, a British think tank, introduces the concept of a “social license,” in which a good reputation results from ethical behavior.
Williams, E. Freya, “Green Giants: How Smart Companies Turn Sustainability Into Billion-Dollar Businesses,” American Management Association, 2015. An executive at the public-relations firm Edelman analyzes a handful of companies that she says are using ethical sourcing and other socially responsible practices.
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Reports and Studies
“Beyond Supply Chains: Empowering Responsible Value Chains,” World Economic Forum, in collaboration with Accenture, January 2015, http://tinyurl.com/
“Chain Reaction: How top restaurants rate on reducing the use of antibiotics in their meat supply,” Friends of the Earth et al., September 2015, http://tinyurl.com/
“Flawed Fabrics: The abuse of girls and women workers in the South Indian textile industry,” Centre for Research on Multinational Corporations and the India Committee of the Netherlands, October 2014, http://tinyurl.com/
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Lake, Quinton, et al., “Corporate Approaches to addressing modern slavery in supply chains: A snapshot of current practice,” Ethical Trading Initiative and the Ashridge Centre for Business and Sustainability, 2015, http://tinyurl.com/
LeBaron, Genevieve, and Jane Lister, “Ethical Audits and the Supply Chains of Global Corporations,” Sheffield Political Economy Research Institute, January 2016, http://tinyurl.com/
The Next Step
Certification and Standards
Chao, Loretta, “Supply Chain Association APICS Takes in Transport and Logistics Group,” The Wall Street Journal, July 15, 2015, http://tinyurl.com/
Freeman, Rick, “Guarantee of ethical practices in seafood products still a long way off,” Aljazeera America, Dec. 24, 2015, http://tinyurl.com/
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New, Steve, “McDonald's and the Challenges of a Modern Supply Chain,” Harvard Business Review, Feb. 4, 2015, http://tinyurl.com/
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“Supermarkets pledge to cut food and drink waste by a fifth,” The Telegraph, March 15, 2016, http://tinyurl.com/
Lang, Marissa, “Eco-conscious CEO develops alternatives to plastic packaging,” San Francisco Chronicle, March 9, 2016, http://tinyurl.com/
Wee, Heesun, “How businesses, families can profit from reducing food waste,” CNBC, March 9, 2016, http://tinyurl.com/
Avenue des Gaulois 9, BE – 1040 Brussels, Belgium
+32 2 736 03 05 or +44 20 7902 2322
A global forum of “fast-moving consumer goods” manufacturers that promotes responsible sourcing practices and sustainable supply chains.
Council of Supply Chain Management Professionals
333 E. Butterfield Road, Suite 140, Lombard, IL 60148
Professional association that works to advance and publish research and knowledge on supply chain management.
Ellen MacArthur Foundation
The Sail Loft, 42 Medina Road, Cowes, Isle of Wight, PO31 7BX, UK
+44 (0) 1983 296463
Nonprofit organization that promotes the circular economy—an economy that strives to produce no waste—and circular supply chains.
7-9 Fashion St., London, E1 6PX, UK
+44 (0) 20 7375 1400
Consultancy that advises on responsible business practices, including ethical sourcing.
6263 N. Scottsdale Road, Suite 205, Scottsdale, AZ 85250
Organization that publishes standards for ethical business practices, assesses corporate ethics based on those standards and recognizes top performers with the “World's Most Ethical Company” designation.
Jollemanhof 17 Floor 3, 1019 GW Amsterdam, The Netherlands
+31 (0)20-788 4400
Social enterprise that is attempting to build a movement for ethically sourced supply chains in the electronics industry.
Institute for Supply Management
2055 E. Centennial Circle, Tempe, AZ 85284-1802
Global organization dedicated to advancing the practices of procurement and supply management.
Southwark Bridge Rd., London SE1 9HF, UK
+44 (0)20 7902 2320
A nonprofit organization seeking more responsible and ethical business practices in global supply chains. It runs an online database where members can store, share and report on supply chains.
Sustainable Apparel Coalition
82 Second St., San Francisco, CA 94105
An alliance of apparel brands, manufacturers, NGOs, government and academics that promotes sustainable production; it has built the Higg Index, a standard that measures environmental, social and labor impacts of the supply chain.
44 Belchertown Road, Amherst, MA 01002
An international not-for-profit training, consulting and research organization specializing in supply chain social responsibility and sustainability.