Why Ethical Sourcing and Technology Make a Great Team

Technology and ethical sourcing seem to go hand in hand, but what makes them such a powerful team? We explore their relationship in more detail.

There are conflicts within the supply chain when it comes to ethical sourcing and the ability to implement it successfully. 

A key issue lies with the fact that the very ideas of ethics are not consistent across all countries, industries and sectors. Neither have they traditionally been financially measurable.

However, this is quickly changing. A prime example of a company getting it right is Patagonia, the US-based clothing company that has built a global brand on sustainability and ethical sourcing. This positive reputation has seen the brand go from strength to strength, something that most certainly is financially measurable. 

The idea of ethics within supply chains comes with broad connotations and relates to issues such as labour conditions, sustainability and the environment, preventing corruption and ensuring against modern slavery. Supply chain complexity makes ethics not only hard to pin down but almost impossible to enforce, the further through the supply chain you venture.  

Why Supply Chains Need to Become More Ethical

The nature of the hyper-interconnected modern world means sustainability and corporate social responsibility are no longer an optional choice. As consumers become savvier to existing practices, ethics deployed at every tier of the supply chain have to be examined and re-examined. If businesses fail to monitor their supplier effectively, it will be much harder to manage overall supply chain performance and sustainability.

There are a number of key focus areas when discussing the idea of ethical sourcing. Freedom of employment, child labour, working conditions, pay and working hours all play their part, but larger questions around corruption and sustainability must also be answered. 

Brands are increasingly feeling these pressures with ethical sourcing issues making their way into the news more and more often. If we cast our minds back to March 2021 and the now infamous Suez Canal blockage, supply chains were disrupted in many different ways. Amongst delayed deliveries and missed shipments, coffee brands such as Kenco and L’Or could no longer procure certified coffee, meaning their Rainforest Alliance certification was void.

While the global expanse of supply chains is no doubt of huge benefit to the world, increased numbers of stakeholders and exposure bring about risk and management issues. An ethical code of conduct may hold more weight in one location than it does in another. Some countries may value environmental concerns above all else. Some may even dismiss them altogether. 

This is why verifiable, robust checks and balances are so vital to the transparency of global supply chains. They facilitate the improvement of both their sustainable and ethical credentials.

How Technology Can Help

Self-governed policies are a positive step but don’t provide the comprehensive coverage needed for such extensive compliance. While a robust supplier code of conduct is an essential weapon in the fight for sustainability, alone it stands little chance of success.

This is where technology comes in. The implementation of digital supply networks has the potential to revolutionise global compliance and ethical standards.

If all supply chains could have automated ethical checks written into them, procurement teams the world over would have peace of mind. Standardised checks would mean suppliers are held accountable to the same ESG standards, no matter where they are based. 

Never before seen levels of transparency and accountability are set to be possible thanks to the digitisation of supplier networks, provided every member of each chain is connected.

For this to work, performance metrics must be standardised, comparable and centralised. While this is not an easy task given the disparity between working practices, adopting a technology-based approach could improve credibility and competitiveness. Both of which are of the utmost importance to any modern brand.

The idea of shared responsibility is also a crucial aspect that technology helps us with. Within our increasingly complex supply chains, trading partners have a responsibility to one another to ensure ethical standards are upheld. The ability to access and evaluate data on-demand and in real-time is vital to this being done successfully. 

Through the development of technology like Blockchain, companies are subjected to increased data-led scrutiny. This allows stakeholders to demand visibility around who they deal with and how they conduct business before forming working relationships.  

To guarantee ethical sourcing practices are consistent throughout their supply chains, organisations need access to accurate, up to date data. This data needs to then be accessible for all key stakeholders and customers alike with clear insight into supply chain operation. The only way for information like this to be compiled and shared effectively is through the proper deployment of cutting edge technology.

The name of the game when it comes to ethical sourcing continues to be transparency and visibility. Streamlining and automating processes through the use of tech like Blockchain and A.I. are key to the evolution of our supply chains as we edge closer and closer to a sustainable future.