Until only a few years ago, the issue of ethics within the supply chain was one that was seen as being of importance to charities and voluntary organisations, who were keen to show that they only sourced supplies from companies that had high codes of ethics. Yet these days, it seems as if companies are falling over themselves to declare that they can supply items and components that are produced in an environment that is very ethically ‘sound. So what happened and why are ethics seen as important in the supply chain; isn’t it more important to simply source the cheapest suppliers and to heck with the ethics?
Well the sea change in terms of how ethics is viewed, is not just because we are all suddenly much more ethical than before. There are sound business arguments for checking the ethical standards of suppliers and asking questions about their ethics.
Like it or not, or even agree with some of the theories or not, the environment is a hot topic. Companies are now being forced to cut their carbon footprint and reduce their emissions. Companies that simply ignore the demands that the Government is making in terms of ‘going green’ will find that they are no longer able to sell all their products, we are in a situation where companies really do have to strive to be ‘carbon neutral’ and ethically, being environmentally aware is pretty high up in terms of ticking the boxes and showing a responsible attitude.
Historically in the UK, large supermarkets were anything but ‘green’, with carrier bags used in abundance and no clear information about policies regarding where products were sourced. Now some of the larger players, including Waitrose and M&S are very keen to be regarded as environmentally aware and they care about the ethics involved in the supply chain. In turn this has a knock on effect on other businesses, all of whom are vying with each other to be seen as being ‘sound’.
The Labour Used
Every few years or so a scandal used to emerge, where child labour in certain countries was found to be the labour used to make merchandise for the World Cup, or anti-poverty bracelets, or clothes for expensive UK brands. The embarrassment caused by these scandals could be enough to seriously damage a company’s reputation.
Then the internet brought the ability to disseminate information very quickly, so that there is always a risk of an internet storm, if companies are portrayed as being exploitative or using child labour.
So companies started to realise that the only way to avoid these type of scandals was to use companies who could show that the labour involved received a fair day’s pay, for a fair day’s work.
Ethical Issues In Context
However, it is unlikely that all companies will be donning sackcloths and ashes just yet! Ethical issues, especially those relating to the environment are important, even for no other reason than ensuring sustainability criteria are met. But ethical issues are generally a factor, a consideration, they cannot generally be viewed as being the most important criterion for selecting suppliers, unless the company is marketing itself on the principles of high ethical standards.
The concept of business and ethics resting together is something that is achievable, because the two are not mutually exclusive. It is also good to have some indication of the ethics and governance of suppliers, but the role of ethics needs to be seen as important, but not the most critical criterion for selecting suppliers.