Ethics has become an increasingly important aspect of supply chain management, so much so that a set of principles called supply chain ethics was born. Consumers and investors are invested in how companies produce their products, treat their workforce, and protect the environment. As a result, companies respond by instituting measures to reduce waste, improve working conditions, and lessen the impact on the environment.
Consumers expect more from the brands they buy from than ever before, and an ethical supply chain is now a requirement in the experience economy.
As they gain awareness about issues related to the environment, sustainability and forced labor, shoppers are demanding that supply chains meet ethical standards related to environmental stewardship, sustainable sourcing, reducing waste, and better worker conditions.
A recent Accenture Strategy survey of nearly 30,000 consumers in 35 countries found that more than half of UK customers “want companies to take a stand on issues they care about such as sustainability, transparency and fair employment practices.”
The supply chain is no longer a back-office function that consumers have never heard of. Over the past ten years, it’s taken on a more forward-facing role that’s a competitive differentiator and part of the corporate business model.
So what is an ethical supply chain? It’s more of a practice than a definition.
Supporting an ethical supply chain means that companies will incorporate social and human rights and environmental considerations into how they do business across the world.
An ethical supply chain focuses on the need for corporate social responsibility, working to produce products and services in a way that treats its workers and the environment ethically.
Following are some questions that consumers are asking about brands and their supply chains:
Do you trust your suppliers and supply chain partners? Do they keep their word regarding ethics and morals, regardless of possible additional costs?
Does each link in the supply chain take care of its workers with fair pay, sustainable work loads, and ethical work conduct?
Is the sourcing of materials done from sources with renewable or low impact extraction methods? Is this certified?
If unethical behavior is discovered, how will it be remedied? Will each partner in the supply chain actively work to make sure it’s corrected?