Research, commissioned by Standard Chartered and carried out by the Economist Intelligence Unit, found that company executives had unwarranted confidence about how reliable their supply chains were. Most executives felt confident that their companies’ supply chains were responsibly managed – despite evidence that insufficient attention was being given to key issues such as child labour, climate change and gender equality.
“In a world in which 69 of the world’s 100 largest economic entities are corporations rather than countries, responsible supply chains are a moral imperative.”
The strongly-worded report argues that the digital era is leading to an increasingly well-informed and critical customer base, meaning companies seeking credibility need to get ahead of the issue, as pressure for transparency and responsibility will only increase.
Positive stories, such as where a company empowers women in its supply chain to grow their businesses, can give a brand a reputational boost while improving supply chain resilience. The report also cites business continuity reasons for responsible conduct, such as the threat to agricultural production in some areas from climate change.
Third party certification is listed as an effective way to address the issues, with the authors stating that, “One firm alone, even a very large one, has a limited effect on the overall supplier base. Working with third parties holds more potential to make responsible supply chains mainstream.”