Ethical practices must run throughout supply chain
Amid new furore surrounding modern slavery breaches happening in the UK, Bureau Veritas has asserted that it has never been more important for UK businesses to ensure they implement ethical practices throughout their entire supply chain.
In a damaging blow for the UK retail sector, recent weeks have seen a number of online retailers come subject to allegations of modern slavery breaches on account of the poor working conditions and below minimum pay in place at their UK-based clothing factories. In the wake of the damaging revelations, the government is reportedly planning an expansion of modern slavery laws amid concerns that existing legislation is “not fit for purpose”.
This follows the 2015 introduction of the Modern Slavery Act in the UK whereby, in a supposed landmark for supply chain transparency, companies whose turnover exceeds £36m are required to produce an annual statement describing the actions taken to avoid slavery in their operations. However, without any according enforcement and confusion over the requirements, it is estimated that around only 57% of the 19,200 companies required to comply with the law have issued statements to date.1
David Murray, Technical Director Sustainability, comments: “While the Modern Slavery Act was brought to refocus ethical supply chain practices in the UK, the reality is that, with little in the way of enforcement, it has failed to be fully utilised – as clearly demonstrated in the recent scandals coming to light for renowned fashion companies.
“As a result of the ensuing public backlash and calls from politicians for more cohesive regulatory enforcement, there is a strong chance that the Modern Slavery Act will be updated to include more stringent requirement and guidelines as well as fines for companies who fail to provide the adequate information and implement a strong supply chain policy. “Cue an ever-increasing pressure for UK businesses, particularly retailers, to ensure that they have their houses fully in order when it comes to operating an ethical supply chain.”
Alongside proposed regulatory reform, the mounting case for better corporate social responsibility (CSR) in all aspects of business, including supply chain practice, is also being coerced by a much more informed and ethically-aware consumer profile.
More than ever, consumers around the world are changing their shopping habits to align their purchases with their values, and expect companies to provide information on their sustainability strategy to ensure they mitigate their social and environmental impacts. According to a previous global Nielson study2, 92% of millennial consumers and 81% of all consumers are more likely to purchase from ethically perceived companies.
David adds: “Ever since the 2013 collapse of Rana Plaza, a garment factory in Bangladesh which killed 1134 people and was exposed as operating appalling working conditions while making low-cost clothing for major UK retailers, there has been increased awareness of the issue of unethical supply chains. More than ever, today’s consumers increasingly expect companies to be transparent about how, where and by whom their products are made.
“This has been further coerced by last year’s Environmental Audit Committee into the fashion industry, revealing the huge issues of waste, over-consumption and under-utilisation of clothes associated with fast fashion. Thus, the likelihood is that recent scandals will further strengthen the public need to make companies more accountable and transparent.
“In terms of ensuring an ethical supply chain approach, there are a number of crucial steps businesses must take; from mapping their entire supply chain ensuring the visibility of every conceivable link, through to conducting a human rights risk assessment and introducing an ethical supply chain code of conduct, to name but a few.
“Inherently, this can be a complex and timely process, so for some it may pay to partner with a specialist, such as Bureau Veritas, to oversee the process. Undoubtedly, after all, in the emerging ethical corporate world, it will be those companies who go the extra mile to prove their corporate conscience who will remain a step ahead.”
Bureau Veritas has experience and technical expertise in helping organisations improve their supply chain performance in terms of both social and environment impact. This includes providing supply chain mapping, and supplier training through to supporting organisations to plan their sustainability strategy as well as providing guidance to achieve accurate data collection for analysis and assurance.