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Building Ethical Supply Chain

As more regulations shed light on corporate social and environmental issues, companies have begun prioritizing human rights and transparency across their supply chains. Often environmentally friendly efforts go hand in hand with socially just ones, both of which are integral to creating a globally just economy. Motivation stemming from increasing regulations aside, consumers have become increasingly educated on matters regarding environmental and social impact, letting their activism be a deciding factor in purchasing behavior. Ensuring their suppliers are sustainable and ethical is one of the priorities organizations should review in compliance with social regulations.


A prime example of a business that has successfully created ethical and sustainable supply chains is Starbucks. The company has committed to sourcing 100% sustainable coffee through a system called C.A.F.E. (Coffee and Farmer Equity Practices). At the core of this system are four main principles: quality, economic transparency, social responsibility, and environmental leadership. It is designed to promote a transparent, profitable, and sustainable business model. Starbucks takes pride in purchasing their coffee at fair prices and ensuring that every step in the process, from harvesting to the final purchase, is done in an entirely ethical manner. They go as far as using independent third parties to verify the ethical practices throughout their sourcing. According to Starbucks' official website, the open-sourced program consists of more than 200 indicators, covering aspects from financial reporting to protecting workers' rights and conserving water and biodiversity. As a result of their efforts to maintain ethical standards, they have been recognized as the industry standard for ethical sourcing.


There are now many other methods and technologies that can be used to identify ethical suppliers. Communication between the organization and its suppliers is key to maintaining a healthy and mutually beneficial relationship, especially in cases where suppliers' practices are found to be problematic or misaligned. Organizations can communicate their standards and ethical positions to ensure they maintain their ethical standards while still retaining relationships with suppliers whose standards align with theirs.

Another recommendation is to embrace technologies that aid in transparency, which, according to Forbes, can help with supplier recommendations, relationship management, and global trade compliance. There is a new breed of blockchain-based services designed to increase transparency between an organization and its suppliers. One example is the use of Internet of Things (IoT) sensors in combination with blockchain-based track and trace solutions. This allows organizations to trace products from raw materials through to the finished product, identifying any components that are problematically sourced. IoT combines analytics, the cloud, mobile computing, and internet networks to change how companies manage their supply chains and logistics. IoT devices can include sensors, trackers, and more to connect computer systems through Wi-Fi networks and GPS to track products and deliveries

Building an ethical supply chain is necessary in the new industry climate, one that prioritizes sustainability and globally just economic practices. Identifying trustworthy suppliers and securing trade partners who align themselves with the same ideals is the best way to maintain ethics throughout the supply chain. Organizations do not need to completely eliminate problematic suppliers, but by communicating the necessary changes, both the business and its suppliers can become part of an ethical economy.


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