Why is transparency such an important component of responsible supply chain management? And what can companies do to drive transparency through all tiers of their supply chains?
Pressure on companies to be transparent about the risks that exist within their global supply chains has arguably never been greater. From new legislation, such as the Dodd Frank Act
, the California Supply Chain Transparency Act
and the UK Bribery Act
, to consumer, media and other stakeholder pressures, companies are expected to be aware of environmental, social and governance (ESG) issues within their multi-tiered networks of suppliers.
The horse meat scandal
and the tragic Rana Plaza factory collapse in Bangladesh
serve as stark reminders as to the negative impacts on company reputation and revenue that can result from unaddressed supply chain risks, and underline the growing expectations for greater transparency. However, the sheer size and complexity of global supply chains means tracking and responding to ESG risks is a challenging task.
When it comes to responsible supply chain management, ignorance is not bliss. Without supply chain transparency, it’s impossible to gain a full understanding of where the key ESG risks are. The core benefits of increased transparency become apparent when its absence is considered:
- How can you address issues if you don’t know who is supplying you?
- How can you identify supply chain trends and prioritise your activities if you aren’t collecting the right data?
- How can you mitigate risk if you aren’t asking the right questions?
- How can you encourage trust and transparency with your supply chain if your processes don’t respect your suppliers?
This third film in Sedex’s Responsible Sourcing Insights
series outlines the importance of transparency in global supply chains. Drawing on practical experience from sustainability leaders including Marks & Spencer, Sainsbury’s, Diageo and others, film three highlights how increased supply chain transparency can help companies to mitigate risk, assure product quality, protect reputation and prevent loss of shareholder value.
will be featuring a new film every fortnight. The next video will be about driving transparency to improve standards. For more information about the Responsible Sourcing Insights series click here
☛ Mark Robertson is head of communications at Sedex