Louis Brandeis, the celebrated US Supreme Court Justice, may not have been referring specifically to corporate or supply-chain transparency when he uttered this famous quote, but given his interest in progressive causes, it is likely that he would have certainly recognised the importance of transparency as “a remedy for social and industrial diseases”.
Whether horse meat in your beef burger represents an “industrial disease” depends on your point of view, but the discovery of horse meat in the supply chains of a wide range of food companies was one of the biggest stories at the start of the year. What was perhaps most surprising about this issue was just how widespread horse meat was in the variety of processed food products from a range of different manufacturers operating across several European countries. In part this was caused by the complexity of the supply-chains that now underpin the production and manufacturing of processed food.
A few weeks later, the Rana Plaza disaster in Bangladesh laid bare the brutal conditions that still exist in parts of the apparel supply-chain. More than 1,000 workers perished in the building, many of whom had been working as forced labour in conditions not much different from slavery. Many of the businesses sourcing from Rana Plaza expressed confusion in the aftermath of the building’s collapse about whether their products were being produced in one of its many workshops, but there is no doubting the reputational impact that the factory collapse has had on these businesses.
Whether there will be anything more than the reputational impact is as yet unclear, but in other sectors issues of social and environmental performance are of more direct commercial relevance. At an investor seminar focused on Oxfam’s report ‘Behind the Brands’ which looks at ethical issues in the supply-chains of the world’s largest food companies, no less than eight of the ten companies assessed in the report were present, with one commenting that these issues “unquestionably feed into how we think about security of supply”.
Transparency was central to the assessment that Oxfam undertook of these companies and is also being vigorously pursued across a range of other industries. The head of the UK chapter of Transparency International (TI) stated recently that he believed that, at least in the UK, we are in “a golden period of policy-making from TI’s perspective… with open doors like never before.”
The renewed interest from policy-makers, abetted by the tools provided by social media is also providing a more supportive context for pursuing transparency across a range of issues and sectors. Whether it is in tax avoidance, the testing of pharmaceutical products, the presence of chemicals in consumer products or even the fee structures of investment products, whatever industry you are in, pressure is clearly building for greater openness and transparency.
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