A plethora of statements and pledges have been made since the opening of the COP26 summit, though solidarity is beginning to wane. Certain countries have rejected the commitments made by their peers, while others have signalled that they may back away entirely from their initial agreements. If a country is unwilling to meaningfully engage with its own contributions to climate change, then it is important to consider how business should be done with those who operate in such environments. With this in mind, traceability processes must be introduced to all procurement activities to ensure that risks can be identified and mitigated.
Opaque supply chains allow bad actors to operate freely and without accountability, leaving potential for any number of social or environmental harms to be carried out. This lack of understanding may previously have been tolerated, but a clear shift has more recently taken place in the mind of the consumer – indifference to the history of a product is no longer acceptable. Individuals are no longer impressed by the knowledge that nothing demonstrably bad has occurred in the manufacture of the goods that they buy, and are instead placing value on the knowledge that the impacts of their consumption have been mitigated by a responsible production process.
Greater supply chain transparency can be achieved in a number of ways, but it is important to understand in general terms that material information can almost always be provided at little to no cost by any actor in a supply chain. This information is not regularly given without request today, as it is not typically rewarded in the market, though other sharing hesitancies could occur; it is reasonable for a factory to anticipate that they could be unnecessarily criticised by revealing too much to their downstream partners, or there could instead be a more fundamental fear surrounding their organisation being cut from the chain.
Establishing the expectation for product details to be shared can in turn be tricky, though avenues of opportunity do exist. If the volume of trade between two businesses is high, then this can be leveraged to the benefit of the purchaser. If the buyer cannot use purchasing power to their advantage, then other incentives (such as preferred supplier status) could be employed.
In a world where ESG issues are at the forefront of consumer minds, it is now more than ever that difficult questions will be asked of industry, which will in turn echo down the supply chain.
Anonymity is no longer an acceptable argument for a lack of transparency, as the risk to the brand – and the world – is too great. It is our job as industry to facilitate transparency, to ensure that origins are known and risks mitigated. Tackling these problems supports our shared ESG responsibilities and builds consumer confidence, enabling our brands to grow.