Business Advice

Seeing clearly: striving towards supply chain transparency

by FESPA Staff | 28/03/2023
Seeing clearly: striving towards supply chain transparency

The recent shocking images of people mining for cobalt that will end up in rechargeable batteries have placed a renewed focus on supply chain transparency. We look at what this means for printers.

In the third decade of the 21st century, the old rules around capitalism are not quite as dominant as they once were. It’s no longer enough for businesses to simply make a profit – the environmental and social impact that companies have is ever more under the microscope, and these criteria form an increasing part of any business’s apparent value. 

It’s not only the activities of the business itself that are important: supply chains and the effect a business has right down to its most distant link are equally important. Whether it’s the conditions that workers face in smartphone factories in China, or the desperate lives of Congolese people mining for cobalt – which, ironically, is destined for ‘environmentally friendly’ vehicles – supply chains are now a crucial area of concern for customers.

Here we look at why it is in your own interests to make your supply chain transparent and how you can start this process. 

The benefits of being transparent

First, it’s important to understand your supply chain and make it ethically or sustainably robust for one simple reason: it’s the responsible thing to do. It might not be fashionable these days to suggest that capitalism or the open market are a force for good in themselves, but running a successful business isn’t actually dependent on anybody else suffering. Trying to make sure your firm does as little harm in its activities is simply the right thing to do and knowing you are taking steps to help can be personally rewarding.

60% of fashion buyers want more transparency about their clothes’ production journey so they could make ethical purchasing decisions

Regarding business, it’s also a financially practical approach. The general public are demanding more obvious sustainability from their purchases. In 2021, a survey of more than 5,000 fashion buyers from across the US, UK, France, Germany, and China by Avery Dennison Corporation found that 60% wanted more transparency about their clothes’ production journey so they could make ethical purchasing decisions.

If end users want it, the print customers who supply the general public will also want it. In the current cultural climate, supply chain transparency can be a factor that can actually help your business grow. In any case, the requirements to prove the ethical provenance of your products are only going to increase. You can future-proof your business now by making supply chain transparency a fundamental part of its operations.

National action

Another reason why it’s important to look at supply chain transparency is because businesses are increasingly required to do so by national and international legislation. For example, in the UK the Modern Slavery Act 2015 implemented new measures that are directly related to businesses and their supply chains. Section 54 of the Act requires companies with an annual turnover of more than £36million to each year write a Modern Slavery Statement – also known as a ‘Transparency in Supply Chains (TISC) statement’. This lists the steps that business has taken to prevent modern slavery in their business and supply chains (full guidance on what is required in the statement can be found here. 

While that particular requirement in the Act is only relevant to companies with annual turnovers exceeding £36m, the recent UK government guidance for tackling modern slavery in government supply chains points out that “Modern slavery risks can be found in contracts and suppliers of all sizes,” and those involved in public procurement or government supplier management should be aware of them. That means the measures laid out in the guidance may also be relevant to SMEs and voluntary, community and social enterprises (VCSEs).

In the US, US Customs and Border Protection can directly get involved. If the agency has reasonable evidence of the use of forced labour in the manufacturing or production of goods entering the US national supply chain, the CBP can issue a Withhold Release Order (WRO) and seize shipments until importers can prove the absence of forced labour in their product’s supply chain. At time of writing, there were 53 active WROs.

International movements

It’s not only a country-by-country basis that these steps are being taken to reduce the use of forced labour. Internationally, a key part of the United Nations Sustainable Development Goals – SDG 8 – is aimed to ‘promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’. Specifically, target 8.7 vows to ‘take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour’. 

In February 2022, the European Union released its draft European Supply Chain Act, which requires EU companies to audit their suppliers along the entire global supply chain, including all direct and indirect business relationships. 

Textile certification is now well established and approval from a body such as Fair Wear or Fairtrade is a good indication that a supplier is operating ethically

As with the UK’s Modern Slavery Act, this only applies to businesses who reach a certain threshold: “European companies as well as organisations from other countries operating in the EU with 500 employees or more with a turnover of at least 150 million euros.” However: “For high-risk sectors where the risk potential for both humans and the environment is especially high, the requirements of the directive must already be met by organisations with at least 250 employees and a turnover of 40 million euros. These include the textile and leather industries, agriculture and forestry, fisheries, and mining.”

And while SMEs are not directly affected by the Act’s requirements, it will still be relevant to them as suppliers to large companies.

First steps

Where can printers start to take action when it comes to make sure their supply chains are transparent? In many ways, it depends on the sector in which they specialise. For example, the terrible press that the textile industry has traditionally had when it comes to working conditions in developing countries has actually led to some positive developments. Textile certification is now well established and approval from a body such as Fair Wear or Fairtrade is a good indication that a supplier is operating ethically. 

Again in textiles, sourcing organic cotton and looking for the Global Organic Textile Standard (GOTS) can make a big difference. According to the World Health Organization, non-organic cotton kills around 200,000 people a year as a direct result of the pesticides used. Then there is the indirect damage that cotton farming does. Since more chemical products are used on cotton than other crops (non-organic cotton is responsible for the consumption of more than 16% of the world's total production of insecticides and 7% of its herbicides), a lot of cotton farmers get into debt, which leads to a high proportion of suicide. GOTS-approved cotton avoids these issues.

RFID tags or labels can track a product almost from its very earliest manufacturing stages right up to the point of purchase

More widely, regarding environmentally focused sustainability, certifications such as the Nordic Swan Ecolabel, the EU Ecolabel ‘Flower’, Greenguard Gold and OEKO-TEX can all indicate to customers that a manufacturer is taking steps towards responsible manufacturing.

People and technology

For all the positives that come with the move to more transparent supply chains, there are still concerns. As Debbie McKeegan wrote for FESPA last year, greenwashing and the faking of textile supply chain sustainability credentials is a very real problem.

There are moves to reduce such problems though. While some are claiming artificial intelligence will streamline automated production which will result in wastage-free sustainability, more obvious benefits can be seen in the use of RFID (Radio Frequency Identification) tags or labels, which can be used to track a product almost from its very earliest manufacturing stages up to the point of purchase. This has obvious benefits for supply chain efficiency, but also in terms of product and supply chain integrity, too – such as ensuring products aren’t fake.

TextileGenesis uses blockchain technology to authenticate supply chains in the textile industry from the original fibre-origin all the way to the boutique rail. The technology secures brand reputation against fakes, creates article level transparency from fibre-to-retail, and drives value-chain inventory optimisation. It is rather like a passport gathering stamps as it moves around the world, and it is just part of a new ecosystem of sustainability metrics that strips away greenwashing and allows certification bodies to accurately confirm environmental credentials and governments to legislate on the basis of sound metrics. 

For now, though — as Pete Conway, managing director of sustainable t-shirt printer I Dress Myself told us — having a transparent and sustainable supply chain relies on a mixture of trust, critical thinking and some investigative work: “For me, it’s important to make sure garments are sourced from places that pay their workers. A label like Fair Wear or Fairtrade – Fair Wear helps the manufacturers, Fairtrade helps the growers – helps secure that.

“When we first started and every year since, we look at our suppliers. We look at their ethical policies. We look at the certificates they have and we dig into the certification to see what it means. We are to an extent trusting the certification they have, but so much of this process goes on trust. Without physically going there to the factories – which isn’t practical – we have to go on trust and if there is anything that we are concerned about, or if our customers have specific questions or concerns, we have contacts within the supply chain who we can call.”

by FESPA Staff Back to News

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