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?
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