What was the defining sustainability theme of 2012? The (un)ethical supply chain is a strong contender.
Supply chain scandals hit the headlines throughout the year. Apple was criticised for “deplorable” working conditions in China. Fatal protests raged at mines across South Africa. High-profile campaigns by Greenpeace and Labour Behind the Label exposed hazardous process in the textiles industry. And a deadly fire at a Bangladeshi factory linked to Wal-Mart showed just how dangerous it can be for a company to lose sight of its supply chain.
Factory audits were supposed to have fixed these problems. Following the lead of pioneering companies in the 1990s like Patagonia, and spurred on by huge sweatshop scandals at Nike and others, auditing has become a way of life for many large companies. So why isn’t it working?
Simply put, factory audits just don’t go far enough. Incomplete and ad hoc, they are often far too easily cheated by offending factories.
Yet the blows to the reputations of Apple, Wal-Mart and others show just how important it is for companies to get auditing right. Promisingly, the start of 2013 has seen announcements from several companies who seem determined to do just that.
In the past month, Apple and HP have both vowed to crack down on child and student labour in China. Even more significantly, Unilever and Oxfam launched a joint report into labour rights in Unilever’s Vietnamese operations and supply chain. The report draws some tough conclusions about how Unilever’s policies translate to real-world wages and labour conditions. But the overwhelming message from Oxfam is a positive one – by offering such unprecedented access to scrutiny, Unilever has demonstrated its commitment to change.
Slowly, a change is coming about. Data sharing initiatives like Sedex are growing in popularity, as businesses realise that it is in everybody’s interests to work together.
Companies can no longer just wait for the next big scandal to happen (while hoping that it doesn’t happen to them). The examples above show that companies who open about issues in their supply chains will be applauded, not attacked. By pushing for higher standards, by collaborating with each other and with NGOs, and above all by being transparent, companies have a huge amount to gain.
Charlie Ashford is a Senior Researcher at Corporate Citizenship