Unethical Supply Chains & How to Avoid Them

If you’ve been following us for a while, you know that a big part of our work revolves around creating sustainable and transparent supply chains. In a globalized and technologically connected world, where products and data are moving rapidly all over the globe, transparency is vital and sustainability is critical to the future of our planet and society. This means that we need supply chains that promote ethical practices at every step.

To create ethical supply chains, we have to understand where and how we went wrong and quickly begin correctly unethical supply chains.

What is an unethical supply chain? 

Unethical supply chains refer to systems and networks where goods and services originate and travel where producers or providers use practices that violate ethical principles and standards. For example, any processes or practices that harm workers, animals, communities, or the environment may be unethical, and most often, if they are harmful to one, they are harmful to all.

Why Do Unethical Supply Chains Exist? 

It’s often all about the bottom line. Individuals or corporations who engage in unethical practices are generally inspired by a pursuit of cost savings or competitive advantage. 

Service providers at some point along the supply chain or producers themselves may employ harmful, unethical practices knowingly and willingly with intention to lower their costs and earn more profit. They may exploit laborers or cut corners on environmental regulations. 

Sometimes, unethical practices are a little less obvious. Some companies may work with other service providers or businesses without demanding transparency from them and in this way they are employing willful ignorance to deny accountability or knowledge of how and when unethical practices are taking place. 

What Harmful Practices Make a Supply Chain Unethical?

Some common examples of unethical supply chain practices include:

Exploitative Labor Practices

Unethical labor practices include forced labor, child labor, and unhealthy working conditions. Workers may be coerced or forced to work for low wages, extended hours without breaks, unsafe environments, and lack of basic rights. They may fear retaliation or the loss of their jobs if they file reports or complain. 

Environmental Degradation

Unethical supply chains often contribute to deforestation, pollution, overuse of natural resources, and other activities that harm ecosystems and contribute to climate change.

Human Rights Violations

Supply chains may involve human rights abuses, such as working in or exploiting conflict zones and supporting oppressive regimes.

Lack of Transparency

Some supply chains lack transparency, making it difficult for consumers and stakeholders to know the conditions under which products are made and sourced. Often shady practices that harm people or the environment are hidden along the supply chain. 

Counterfeit Products

Supply chains that produce counterfeit or substandard products can compromise consumer safety and trust.

Unsafe Products

Inadequate quality control measures can result in unsafe products reaching consumers, causing harm and damage.

Corruption

Unethical supply chains might involve bribery, extortion, and other corrupt practices that undermine fair competition and the rule of law.

Waste & Pollution

Improper waste disposal and pollution is a result or an exampale of an unethical supply chain practice that impacts local communities and the environment.

Greenwashing

Of course all brands want to sell their products or services and most people have at least some idea that consumers are demanding improved environmental and labor practices. As a result, some brands are cleaning up their supply chains. Other brands are merely trying to clean up their image without actually making any costly changes. Sometimes some or all of these practices are occurring in the supply chain while the brand that sells the product is calling it “eco-friendly” or “natural” or some other buzzy word. Maybe they have a label with rustic looking colors and designs to evoke feelings of nature. This deceptive marketing we call greenwashing is unethical because it hides other unethical practices and tries to sell the consumer a value along with a product. The problem is the value may be absent. 

Addressing unethical supply chains requires a combination of efforts from businesses, governments, consumers, and civil society. 

Some steps that can be taken to promote ethical supply chains include:

• Supply Chain Auditing: Regular audits of suppliers’ practices to ensure compliance with ethical standards.
• Transparency: Providing information about the supply chain, sourcing, and production processes to consumers.
• Certifications: Using third-party certifications to verify ethical practices, such as Fair Trade or Rainforest Alliance certifications.
• Collaboration: Businesses can collaborate with NGOs, governments, and other stakeholders to address supply chain issues collectively.
• Legislation: Governments can enact and enforce laws that promote ethical supply chain practices.
• Consumer Awareness: Educating consumers about the impact of their purchasing decisions and supporting ethically produced products.

Ethical supply chains not only contribute to social and environmental sustainability but can also enhance brand reputation and consumer loyalty.

At Producers Trust, we believe that it is possible for all supply chains to be transparent and ethical, with verified data from the ground, where farmers, makers and sellers can earn fair wages for their hard work and where consumers are empowered with factual information and true stories about where and who their favorite products come from and how.