Corporate SA and supply chain accountability

The Nineties saw a worldwide increase in consumer awareness about corporate accountability in terms of labour practices and human rights in the workplace.

Non-governmental lobby groups and society itself increasingly started holding corporations accountable for how they created profits, and brands that were caught out for sweat-shopping and trade-zone related labour shortcuts suffered serious reputation damage.

As South Africa prepares for a massive influx of tourists and potential foreign investors in 2010, companies will do well to start planning early for the next regulatory and reputational hurdle: Supply Chain Carbon Accountability.

Brand image vs. labour reality
Household brands, even those as progressive as The Body Shop, have suffered bad publicity on account of dubious chemical usage and animal testing in the past. The brand’s negative exposure was compounded by the fact that
the company had engineered an exceedingly socially accountable brand image from day one.

This child labour scandal compelled the chain and its founder, the late Anita Roddick, to make some serious changes in order to fight loss in market and share value. Their efforts are credited to have helped eradicate child labour, and earned the brand a lasting reputation as an ethical cosmetics retailer and a “force of good” in the world. 

 Similarly, American favourite Kathie Lee Gifford got caught red-handed for sweat-shopping and the use of child labour, and had to clean up her act – virtually overnight.

Outsourcing the problem
In an effort to subvert this Nineties consumer-driven outcry, many companies pointed out that they didn’t employ full-time production workers, in an attempt to shirk responsibility for sub-minimum wages and shocking workplace conditions.

What the consumer says goes
But consumers weren’t having any of it; buying power is as powerful a tool as political voting, and “brand scandals” such as these dramatically curbed exploitative labour practises.  

 NGOs took to using “name and shame” tactics, and companies soon started learning from their competitors’ mistakes.

Further bolstered by more rigorous legal and regulatory restrictions, supply chain accountability became a key consideration in the allocation of tenders and production accounts – both nationally and in foreign jurisdictions.

By the same token, it will only be a matter of time before carbon-neutral production and full supply chain accountability becomes a regulatory requirement, and hence an even greater reputational risk factor for organisations.

Can your organisation afford to be known as a carbon criminal?
Would you really like to find out how your share value will hold up if a respected NGO’s investigation showed that your company – or your supply chain – is the biggest producer of carbon dioxide in your sector or city?

Wouldn’t you rather play it safe and commit to carbon offsetting before your competitors do?

Putting your money where your mouth is pays
In recent years, European countries and corporations have spearheaded a drive towards greater environmental accountability. Big names such as Marks & Spencer, for example are setting the benchmark with a £500 million, 5-year plan to become a 100% carbon-neutral retailer by 2012.

The positive publicity the brand received for addressing the climate crisis has been stupendous.

Your organisation only stands to gain by enforcing carbon accountability in-house and all the way down its supply chain.

Why not become an “early adopter” and build a progressive reputation for your company?

Keep reading SA Climate Crisis for more information on creating an organisational framework for carbon accountability, and be sure to sign up for our carbon-neutral RSS feed.

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2 Responses

  1. Congrats on a nice effort to keep Corporate SA focused on some of the things that really matter. Of course, it is always rather annoying to some when one chooses to generalise, but with all due respect, I would suggest that the SA business community has got far more important and urgent matters to attend to… The gap between those who do and do not ‘have’ in SA has quadrupled in the past 5 years. None of the 4+million people who are living in abject poverty in SA today know or care what a carbon footprint is. Nor do the other 10 million who are surviving a meagre existence that is so tenuous that they face a daily challenge to remain out of the ranks of the first group. Granted, carbon neutrality is an important issue, but it is only one very narrow slither of the ‘do the right thing’ pie, which the SA business community must digest.

  2. Dear Ethical Brand (Bill?)

    Thanks for taking the time to comment extensively on this post – I would say that I am in complete agreement with you: SA business have far more pressing issues to deal with, granted. As for your point on Have’s and Have-nots, I don’t believe that the business sector is entirely to blame for that.

    Government has not delivered on its promise to provide a better life for all – and let’s face it, the bergies outside my road, the old bag lady begging outside Rondebosch Pick ‘n Pay, private security guards earning a grand-odd per month – those are all people who could’ve benefited from bigger social welfare grants and well-implemented programmes, from government wage subsidies, from robust social upliftment strategies for gettting indigents off the streets.

    Government officials siphoning 150 million of a schools feeding scheme, in my mind, is more of a crass transgression than the broad argument that the business sector is failing the poorest of the poor.

    As for this blog’s focus, long-term sustainability and financial success depends on keeping one’s eyes on the horizon.

    To only starting worrying about business carbon emissions in 10 years’ time would not only hamper businesses’ ability to get large foreign tenders, but will also leave all South Africans facing a far harder struggle for survival.

    Climate change hits the poorest hardest, and if businesses can contribute to fighting that change, I believe that they have an ethical obligation to do so.

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