Recently, I’ve been paying a lot more attention to another aspect of sustainability in a supply chain context: social responsibility. One of the reasons my focus has shifted is because it’s clear that the leading companies are looking at sustainability with a capital “S”. They are addressing both environmental and social responsibility and tying them in with financial well-being to truly operationalize a “triple bottom line” strategy.
One area of significant concern in the social responsibility realm is human rights in the product supply chain. It’s now becoming clearer that Wal-Mart’s supply chain social responsibility strategy failed in the case of the recent Bangladesh apparel factory fire. How did it fail? According to reports, Wal-Mart’s direct supplier transferred work to a subcontractor without authorization … a subcontractor that had been banned from working for Wal-Mart. So now Wal-Mart has nixed its direct suppliers and many Bangladeshi apparel workers may lose their jobs as a result.
I think simultaneously of the California Transparency in Supply Chains Act of 2010, which went into effect in January 2012. This law requires most big companies to disclose on their websites the specific steps they are taking to “evaluate and address” human trafficking and slavery in their supply chain. The law is a little fuzzy on whether the steps need to go beyond its first tier suppliers. And, in any case, it’s a disclosure law and, therefore, relies on folks who read the disclosures to put pressure on a company if they don’t like what they read.
This is tough stuff! Controlling behaviors in a far-flung supply chain is not easy and sometimes may not even be possible. And, if we add the “financial” leg of the triple bottom line strategy to the equation, is this control sustainable? Trust me, I am all for companies practicing and ensuring responsible behavior (both environmentally and socially). But how??