Supply Chain Management needs to lead the big changes

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When the biggest of the big businesses and the world's super rich got together to talk about sustainable capitalism there were some great ideas bandied about on corporate responsibility and the need for transparency all the way up and down the line. That line is basically the supply chain and it should be scrutinised at every link.

Real sustainable capitalism or more hot air?

Last year I wrote about More Inclusive Capitalism – a brighter economic future for all after following the Conference for Inclusive Capitalism. It was the first time the 250 people who control around a third of the world’s assets had come together. The most shocking thing was that the people who control a third of the world’s assets could fit in one room!

This summer was the follow up, The Pathway to Action. Again an amazing line up of people who can change things, focusing on action, with some pretty smart goals that we should all be talking about, with nice easy to remember lines that we can all use:

Metrics – “we measure what we treasure” (Paul Polman)
Investing for the long term – “creating the world we want to retire into”
CEOs leading by example – “walking the talk”
Ownership based governance – “drive it like you own it”

Plus something that I have wanted to see for years:

“The search for meaningful measurement and disclosure of the outcomes of a corporation’s behaviour in non-financial terms is essential to Inclusive Capitalism in the same way that accurate and comparable food labels are vital to consumers. They help us understand what goes into the products we consume, how those products affect us and those around us and whether they match our goals. Increasing the scope of reporting will give investors, employees, consumers and the public at large a more holistic view of a corporation’s performance.”

We have the power to ensure change happens but it’s difficult to know what fits with what we want to see when the information isn’t easy to find. A system that is as easy as food labelling, where we can see at a glance what the company you are about to support does with its money. Invests in weapons? Has an employee shareholder and or ownership scheme? Pay? Environment? Allowing us to match our values and beliefs with our purchases – this one thing would make an enormous difference.

To make these big disclosures you have to look to the supply chain. Tracking where all the components of your product come from happens now but outsourcing has enabled some of the big corporations to turn a blind eye to what goes on outside their walls. That’s why it was fantastic to read what Paul Polman (CEO Unilever) had to say in his paper.

“But the single action that would yield the biggest difference would be if businesses were willing to take a greater share of the responsibility for what goes on within the total reach of their value chains.

As some have argued, you can outsource the means of production but you can’t outsource the burden of responsibility. Yet many today still choose to hide behind convoluted corporate structures, outmoded tax arrangements and intricate supply chains, hoping to avoid scrutiny and comforting themselves with a few token CSR activities.

It’s not enough merely to put your own house in order. Responsibilities flow upstream and downstream. Indeed it’s only by taking co-responsibility for what goes on within the total value chain that trust in capitalism can be restored and the benefits of business can be spread more evenly.

That means taking a share of the responsibility, for example, for the way raw materials are sourced and the livelihoods of those who supply them. It means taking responsibility for upholding – and indeed promoting – the dignity and human rights of workers at every stage of the production cycle. And it means taking responsibility for the way products are used and disposed of long after they’ve left the retailers’ shelf.”

Just take a minute to visualise that world, it’s just not that complicated. Generally (all over the world) people want to work in a place where they feel like they can contribute and get rewarded accordingly. In return they take that money and spend it on all the goods and services the companies we work for have a hand in. The happier and more secure people feel, the better that cycle goes around. That is inclusive capitalism.

If you work in Supply Chain Management then this is your gig. Be curious, challenge, look for ways you can improve things, talk about the importance of doing this if your company isn’t already doing it. Fight negative thinking around you; when you hear people don’t care because nothing will change, tell them otherwise.

Don’t forget, the richest people in that room are rich because of us, the fact that we might wake up to that is what scares them.

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