(Source: OpenText)Companies need to be accountable and transparent for not only their business practices but also the actions of its supply chain as consumers want ethical standards placed on the entire source of a product, according to a survey from OpenText.
According the survey of 3,000 people in the United States, businesses need to be proactive in ensuring their supply chain operates responsibly throughout the entire production process. The results revealed 39% of consumers judge a company not just on its brand, but also on the actions of its suppliers and 45% say they would never buy from a brand again if it was accused of working with unethical suppliers.
The survey also finds that 82% of consumers will prioritize buying from companies that have ethical sourcing strategies in place. Most of those will also pay more for a product and wait longer to get it to make sure it is ethically sourced.
In order to provide products in this manner, businesses need to be transparent in how they source their materials and be open with how both they and their suppliers act. Some 77% believe businesses should clearly state if their products are ethically sourced.
Ethics in supply chains is becoming an increasing focus in industry. Managing and tracking supply chain activities has been a key part of many businesses environmental, social and governance objections.
Legislation for stricter supply chain oversight is also starting to become a focus in many areas. Some 58% of the respondents to the OpenText survey say there should be regulation holding businesses accountable for responsible sourcing.
Nearly two-thirds of respondents say businesses have a responsibility to ensure their suppliers behave ethically and more than half say that if businesses cannot monitor where their good come from and don’t know how their suppliers are behaving then those businesses need to rethink their supply chains.
About one-third of those in the survey say information on the sourcing always impacts their buying habits.
Intel is one company that says it values that idea and recently reported how it handles the sustainability with its some 9,000 suppliers, and says it holds itself accountable for their actions.
Managing supply chains can be tough for businesses, especially those with hundreds if not thousands of suppliers.
A Harvard Business Review report from 2020 found that while many businesses have goals for sustainability in their supply chains, it is not so easy finding success. It becomes difficult to measure and find accountability in the multiple layers of supply chains and there are many issues remain across the board, the report found.
The cost of not tackling supply chain responsibility doesn’t just come from consumers and the cost is significant. CDP reported at the end of 2020 that companies could face $120 billion in costs from environmental risks in their supply chains by 2026.
