Consumer Goods Companies Lack Supply Chain Visibility, Unable to Assess Environmental, Social Impacts of Products

supply chain visibility sinseeho/Adobe Stock

The majority of consumer goods manufacturers lack visibility into their supply chains and are unable to truly track sustainability practices or identify problem areas such as possible deforestation and forced labor, a new report from The Sustainability Consortium (TSC) shows. The group’s 2016 Impact Report stated that of the 1,700 companies surveyed, only 19% indicated they had full supply chain transparency. Twenty-seven percent said they had partial visibility into their supply chain and 54% had no supply chain visibility.

“This lack of visibility impedes consumer goods manufacturers from engaging their supply chains to make necessary sustainability improvements where they matter most, in their supply chains,” the report, titled “Greening Global Supply Chains: From Blind Spots to Hotspots to Action,” said.

Missing Data

Low supply chain visibility also makes it difficult for companies to determine if they are meeting regulations, how their production cycle are impacting the environment or how exactly their products are produced. For example, less than half of the companies surveyed for the report said they could say with certainty what percentage of their palm oil supply was certified by the Roundtable on Sustainable Palm Oil or an equivalent organization.

When it comes to supplier labor standards, visibility is also low. While 80% of respondents in the textile manufacturing industry specifically were able to report data on health and safety conditions at their own facilities, 40% of respondents had no data on the working conditions at their suppliers, the report stated.

Also, most apparel companies are unable to report environmental impact data on their suppliers. The TSC report stated nearly two-thirds of survey respondents could not report information on how their suppliers were tracking key wastewater quality metrics, for instance. Just 10% of companies were able to report greenhouse gas and wastewater information on all of their suppliers.

The agriculture industry also lacks visibility on this sort of information — less than 20% of companies surveyed in this sector could report data on fertilizer usage, greenhouse gas emission or soil erosion at farming facilities. About 50% say they track forced or child labor as well as labor and community rights within their supply chains.

Improvements Needed in Consumer Goods Supply Chains

The TSC report also identified the overall impact of global production and use of consumer goods. For instance, consumer goods account for more than 60% of global greenhouse gas emissions, according to the report, and more than 75% of the forced and child labor that takes place around the world is embedded into consumer goods supply chains.

There is clearly room for improvements, as the TSC report pointed out. In its report, the TSC details its measurement and reporting system, which consumer goods companies can use to improve transparency in their supply chains, address sustainability concerns and monitor the key environmental and social impacts their product cycles have.

“With 2.5 billion more people joining the consuming class in the next few decades, we must address the production, use and disposal of consumer goods: a sustainable world requires sustainable production and consumption,” the report said.

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