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Radical transparency in the supply chain?

Monthly Briefing

As consumers and individuals, we have the right to know the source of the things we buy or the uniforms we wear. For many of us, the trust we have in a retailer, brand or employer might be sufficient to stop us from asking too many questions and leave us free to go on living our lives.

However, for businesses things are trickier. They need to substantiate the trust they place in their supply chain with hard evidence and robust information. They need to know the answers to our questions should we ask them. And as with any other risk on a company’s risk register, they need to understand the scale and potential for impact of the risk.

In reality, a supply chain is far from neat and tidy which presents a challenge for business. Let us take a t-shirt as an example. What oversight do we expect businesses’ to have of the practices of the retailer where they buy their finished t-shirt? What about the manufacturer of the t-shirt? Or the trader that purchased the fabric before that? How about the mill that produced the fabric? Lastly, what about the labour conditions of the person picking the cotton on the farm a million miles away?

A business will have an aspiration to be successful from selling its products, and a right to expect the provenance of the product to be sound, but it also has a responsibility to ensure that is the case.

We are now being asked questions about ‘radical transparency’, a concept first made famous by billion investor, Ray Dalio. Dalio’s Principles for Life and Work sets out the case for radical truth and transparency, arguing that adopting these concepts will lead to better decision making. But ‘radical transparency’ in the supply chain is not about deciding what information to reveal. Instead we should be asking why companies do not have the information in the first place.

To achieve full transparency in supply chains, we need systems change. And to achieve systems change, we need collaboration and partnership.

Technology is a powerful tool to that can help companies to understand their supply chains and foster partnerships that can transform supply chain systems.  We’ve seen several innovative partnerships that are attempting to bring together digital connectivity, satellite imagery and blockchain to shine a light on previously hidden issues in the supply chain, and facilitate the cross-sectoral collaboration necessary to address them: 

  • Satellite imagery is being used by the Earth imaging company Planet Labs, in partnership with the NexGenMap project, to monitor deforestation and identify illegal mining in the Amazon basin. The technology can also be used to verify zero-deforestation commitments to help enforce and report on sustainability goals. 
  • AI and cloud-platforms are also being used to fight human trafficking in a coalition of financial institutions, academic institutions, NGOs and law enforcement, launched by IBM using their Cloud-Based Traffik Analysis Hub (TAHub). The initiative brings together information from members’ respective fields to form an International Data Hub. Data from the Hub is used to identify trends and develop methods to combat human trafficking, such as targeted awareness campaigns on Facebook and Instagram.
  • Similarly, a partnership with Mars Petcare and Immarsat has enabled Thai Union, one of the world’s largest seafood companies, to bring digital connectivity to their operations at sea, enabling traceability from catch to consumption. The initiative has equipped fishing vessels with ‘Fleet One’ terminals and digital log-books which capture data on the size, location, time of a catch to crew numbers, working hours, and conditions digitally whilst at sea.
  • Blockchain has further been used to disrupt the food industry with start-ups, such as Provenance, using the blockchain to create digital platforms that allow consumers to see information on the origin, journey and impact of products.

There shouldn’t be anything radical about transparency in the supply chain. And these examples show how technology and partnerships can be used to create a culture of greater transparency and accelerate systems change.

Under the lens of Corporate Citizenship’s rights, responsibilities and aspirations framework, we pose some questions to companies:

  • What are your aspirations in terms of ensuring your supply chains are managed sustainably, responsibly, and transparently?
  • How are you capitalising on your right to access, and the associated opportunities that come with, leveraging globalised supply chains?
  • What responsibilities do you have to your suppliers, their employees, local communities, and consumers to transform your supply chain to create a positive impact on society?

Going beyond these questions, gaining complete oversight of your supply chain is not simple. But there are certain tools that can help you get there. Enacting real change requires cross-sectoral collaboration between stakeholders, harnessing the power of technology to drive positive impacts on people and the planet. One thing is clear no company can do it alone.

Image Source: Mining in Peru, Satellite pictures of Peru by Planet Labs is licensed under CC-BY-SA-4.0