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Increasing Supply Chain Transparency Through Federal Oversight

The SSC Team December 25, 2018 Tags: , , , , , , , , , , , , , , Strategic Sustainability Consulting No comments
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In our growing global economy, there are so many risks to be considered when a company establishes their supply chain. From forced labor to human trafficking it is vital that those in the sustainability industry make every effort to address these atrocities if they arise.

 

On January 1, 2012, California enacted the Transparency in Supply Chain Act, requiring retailers and manufacturers with annual sales of $100 million or more conducting business in California to disclose their efforts to eliminate human trafficking and slavery from their supply chain. Ensuring disclosure of "to what extent if any" a company engages in the five following activities: verification, auditing, certification, internal accountability, and training are required.

In October, the US House of Representatives introduced H.R. 7089: Business Supply Chain Transparency on Trafficking and Slavery Act of 2018, in an effort to amend the Securities Act of 1924. This resolution, like the Transparency Act, would require certain companies to disclose information describing any measures they have taken to identify and address conditions of forced labor, slavery, human trafficking, and child labor within the company’s supply chains. In 2014, the Department of Labor identified 136 goods from 74 countries around the world made by forced labor and child labor. That information, and the current challenges of prosecuting the perpetrators of such crimes, are the driving force behind this legislation which states “the United States is the world’s largest importer, and in the 21st century, investors, consumers, and broader civil society increasingly demand information about the human rights impact of products in the United States market.”

With the impact that that this bill could have on business around the country in mind, we wanted to look back at the way the Transparency Act impacted midsize clothing retailer Eileen Fisher when it went into effect. The business was already committed to sustainability so they weren’t starting from scratch, but they aren’t a business empire like Adidas or Nike so their resources for these efforts were limited.

Shortly after the act was in place, the company’s Human Rights Associate Luna Lee spoke about what actions the business had taken to comply with the new law. What the team at Eileen Fisher did in order to implement efforts to meet the requirements of the Transparency Act will likely be applicable and beneficial to companies that would be impacted by HR 7089.

A key takeaway is that you might know all about your company’s sustainability obligations, but your suppliers may not. It’s vital that you take the time to educate them. And while you're at it, ask how they can help you. They may have great ideas, but believe you don’t really care. Let them know that you do!

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