Transparency within supply chain mapping

Srivastava (2007: 54) defines green supply chain management as ‘integrating environmental thinking into supply-chain management, including product design, material sourcing and selection, manufacturing processes, delivery of the final product to the consumers as well as end-of-life management of the product after its useful life’. The global fashion industry is organisationally complex and supply chains can be long and opaque, and if it is the latter, transparency will be hindered, therefore making it more difficult for marketers to create substantiated campaigns around organisational environmental credentials. For example, the Indonesian Palm Oil industry is linked closely with supplying raw materials for retail sector products and has over two million smallholders running 40% of plantations across the country (Prakarsa, 2016) illustrating the scale of investment needed to comprehensively map this individual supply chain. Some large retailers, for example, Marks and Spencer, have developed a strong brand image and leverage competitive advantage through their environmental credentials. This, in part, has been achieved through detailed mapping of their supply chain and publishing this to all stakeholders (Donati, 2016). As stated by Ashby et al. (2013: 75-76) ‘in today’s global marketplace a firm cannot ignore its suppliers’ practices and must be acutely aware of stakeholder expectations’.

A key challenge that organisations, in particular, large clothing brands and retailers face in mapping their supply chain and understanding its environmental impact is being able to create transparency throughout for all stakeholders. Transparency within supply chain management can broadly be defined as ‘disclosure of information’ (Egels-Zanden et al., 2013: 95-96). Transparency from effective green supply chain management is key for large clothing brands for a number of reasons: for example, to meet strict Global Reporting Initiative (GRI) requirements and support marketing departments with green branding strategies but also to help minimise risks (Sarker 2012: 492) in relation to any sustainability concerns within their chain. This could have longer-term negative media and consumer attention if not managed properly. An example of negative media attention is illustrated through the recent public relations emissions scandal for Volkswagen which is estimated to cost the company £15.8 billion (Reuters, 2017) or Australian surf and ski-wear brand Rip Curl after an investigation highlighted that some of its clothes were made in an unauthorised factory in North Korea (Just-Style, 2016).

To enable organisations to achieve high levels of transparency, the first key activity is to map their supply chain. Supply chain mapping is a living system that graphically represents the supplier network driven by a master database which is open to all stakeholders so each user has the same understanding. The March to Sustainability report (cKinetics, 2010) states that in the next decade textile brands will make supplier choices based on which suppliers are able to report and demonstrate sustainability measures. In contrast to the proponents of increased transparency, Lueg et al. (2013) contend that corporate sustainability does not add measurable value (for example, better brand image) or exert coercive control over suppliers. Egels-Zanden et al., (2013: 95-96) and Mol (2015: 154) provide an alternative view that increasing transparency is not always desirable by contending that companies face trade-offs when attempting to create transparent supply chains, for example, between developing collaborative, developmental relationships or ‘naming and shaming’ unsustainable practices and suppliers which undermines company-supplier trust. Moreover, Locke (2009) argues that collaboration and trust is key to improving suppliers’ sustainability conditions, which should be the primary focus.

For sustainability efforts to have a measurable impact on improving environmental and broader key performance indicators in the fashion industry, all parts of a supply chain must work towards improving their performance even though there are likely to be specific challenges, for example, a lack of resources or experience, particularly with smaller suppliers from developing countries. Hoejmose et al. (2012: 609-10) highlights that companies who operate predominantly within business-to-consumer (B2C) markets have strong incentives to implement green supply chain management due to both institutional and stakeholder pressure. However, there is limited engagement with companies who operate within B2B markets. These findings reinforce the trends highlighted within the fashion industry where, in particular the consumer-facing brands (fashion brands and large retailers), increasingly have a dominant position in supply networks (MacCarthy and Jayarathne, 2011: 252-253) and appear to primarily be taking the lead with green supply chain management initiatives, for example, through the Sustainable Apparel Coalition and CH2M HILL industry collaborations (Ivanova and Wollmuth, 2014).

Arguably, the management of risk for supply chain managers and marketers within the fashion industry is a key consideration when deciding to what extent to implement green supply chain management and green branding strategies; however, if climate change predictions are to be accepted then failure to act is the biggest risk of all, not only for stakeholders but, also, shareholders. However, there is a clear distinction to be made between adopting green strategies because the organisation believes it is the correct action to take and choosing them to reduce risk and manage consumer and stakeholder expectations. Therefore, to effectively reduce environmental damage and promote pro-environmental behaviour, organisations within the supply chain need to develop a value-based, organisation-wide approach which empowers employees to engage in sustainability development and, to some extent, decentralise the sustainability activities and decision making to organisational functions. This will help create an organisation-wide approach which will be more effective than limiting all sustainability developmental initiatives within a sole function and will also aid brand identity development to help avoid criticisms of greenwashing through isolated initiatives.

 

References

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Donati, M. (2016) M&S publishes map of clothing and food supply chains. The Chartered Institute of Procurement and Supply. Available at: https://www.cips.org/supply-management/news/2016/june/ms-publishes-map-of-clothing-and-food-supply-chains/; accessed 10 January 2017.

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Locke, R. Amengual, M. Mangla, A (2009) Virtue out of necessity? Compliance, commitment, and the improvement of labor conditions in global supply chains. Politics & Society, 37 (3) 319-351.

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