By David Evans
If we want to save the world, we have to do better…
It’s clear that consumers are becoming more critical of of brands as they continue to educate themselves on the impact of their purchases and make better decisions. In turn, brands are working to meet this new demand from conscious consumers, but the transformation of supply chains may not be going quite as planned.
Suppliers are underperforming
To understand how suppliers are performing we can use data from third party inspection companies as an indicator. Third party inspection companies like AsiaInspection, SGS, and Intertek work as an objective middle-man between brands and suppliers to make sure suppliers are living up to the standards set by the brands they are working with.
Brands commonly use third party inspection companies to make sure their prospective suppliers are complying with ethical and environmental standards before they start business. AsiaInspection regularly publishes summaries of their inspections and audits, and the statistics seem to put a damper on the conscious consumer’s progress.
In 2016 only one third of ethical audits conducted by AI found suppliers compliant with minimum standards. The primary issues found included forced overtime, sexual harassment, child labor, forced labor, and exploitation of refugees.
This means that over 60 percent of suppliers inspected did not meet minimum ethical requirements – which aren’t that strict. This is clearly a challenge for brands who want to take advantage of the benefits of outsourcing and still meet the ethical standards of their customers.
Environmental performance is another challenge slow to make progress. From the 2016 AI performance report,
“Environmental compliance was also uneven throughout global supply chains in 2016. According to AI data, over 36% of audits failed this year, a 5% increase from 2015.
Simply put, if you’re a brand looking to outsource your production, finding a manufacturer that meets minimum environmental compliance isn’t going to be easy and the trend for the last two years shows that the pass rate it is actually declining.
Finally, the assessment from AI paints an unfortunate conclusion about the progress of environmental compliance altogether,
“Overall, many brands are not prepared to make a commitment for ISO 14001 compliance right out of the gate, instead choosing to aim for the minimum legal standards applicable in their sourcing country.”
Given the hurdles to finding ethical and environmentally responsible suppliers it’s no surprise that brands are opting for the minimum environmental requirements to be compliant. These are usually local environmental laws that are much more relaxed in countries overseas, but we all know this is not nearly enough to ensure environmentally sound manufacturing processes.
ISO 14001, however, is the standard needed to raise the bar and offers a clear benchmark for brands, consumers, and suppliers alike to gauge performance.
What is ISO 14001?
ISO (International Organization for Standardization) is an independent NGO made up of 162 international standards bodies that develop standards. ISO standards represent the consensus of professionals from around the world on minimum requirements for quality, safety, and efficiency.
ISO 14001 is their standard for environmental management systems. “It maps out a framework that a company or organization can follow to set up an effective environmental management system. It can be used by any organization regardless of its activity or sector.”
What are brands and consumers to do?
Brands should follow ISO’s environmental performance standards (as well as their ethical compliance standards), but they don’t have much incentive. A brand’s decisions are going to continue to be driven by money, so their only incentive to live up to tighter restrictions will have to come from their customers (assuming governments don’t raise the minimum compliance requirements).
Unfortunately that’s asking a lot from today’s consumers. How many consumers know what ISO 14001 is and how many of them know how to tell if a product they are buying has come from a brand that meets these requirements?
Chances are it isn’t enough to have a significant impact on the way brands make decisions.
Understandably, today’s consumer is in a difficult place, because to make a truly impactful decisions they have to be quite educated about the product they are buying.
Right now conscious consumers are mostly relying on brand reputation and packaging, which is no longer sufficient. Most of the information about a brand’s reputation that consumers are exposed to is controlled by the brands themselves – packaging, CSR reports, and digital marketing channels like social media and their website.
Consumers only have a tiny window of clarity about a brand’s ethical and environmental performance through investigative journalism and third party eco labels. While eco labels – including ISO certifications – are an effective way for consumers to gain insight into a product’s ethics, the learning curve is steep.
We need to break through
We know that a growing number of consumer’s have a positive intention to sway the actions of brands, but their efforts are not translated through the supply chain nearly as fast as one would hope.
This disconnect between the motives of conscious consumers and the actual impact of their purchases is a major problem. Until we can give consumers the information they need to make truly informed decisions, progress will remain slow and we can’t expect supply chains to reform any time soon.
Image Credit: AsiaInspection
David Evans is the founder of prch, a resource for eco-minded consumers. He is a minimalist, environmentalist, and conscious consumer with a background in environmental studies, conservation, and tech. Learn to improve your environmental and social impact @theprch.