Sustainability Requires Supply Chain Transparency

Quality control, product liability, sustainability reporting – companies have lots of good reasons to understand and document exactly where they get their components, materials and supplies. We expect sustainable companies to buy from responsible suppliers, to appreciate their value and to be proud of their integrity. But do we allow companies to consider information about their suppliers confidential?

Apparently not anymore. Companies that want to treat their supply chain as a trade secret risk serious harm in the public eye. Lack of transparency can lead to criticism that may diminish a company’s image, brand value and sales.

Apple is accused of using suppliers that release environmental toxins and pollutants, and/or expose employees to unsafe working conditions. The company says it’s not so, but refuses to divulge information about its suppliers to support its defense.

In his recent blog post, “Chinese NGO Claims Apple Supply Chain Sustainability Is ‘Rotten to the Core.’ Will Consumers Agree?” Dave Meyer says the company is taking a serious risk by not matching the supply chain transparency of its competitors.

In the six months since the Chinese Institute of Public and Environmental Affairs (IPE), a non-governmental organization (NGO), leveled complaints against nearly 30 manufacturers in the electronics industry, most have honored IPE’s request to initiate an open dialog, but not Apple. Meyer says Apple is “more secretive about its supply chain than almost every other American company operating in China.”

IPE’s accusations are specific and involve publicly documented issues with 27 Apple suppliers. It reports that while many other IT brands including Siemens, Vodaphone, Alcatel, Philips and Nokia have driven their suppliers to improve, Apple refuses to make its actions public. IPE reports, “The public has no way of knowing if Apple is even aware of these problems. Again, the public has no way of knowing if Apple has pushed their suppliers to resolve these issues. Therefore, despite Apple’s seemingly rigorous audits, pollution is still expanding and spreading along with the supply chain…Even when faced with specific allegations regarding its suppliers, the company refuses to provide answers and continues to state that ‘it is our long-term policy not to disclose supplier information.’”

IPE concluded that Apple needed to own up and be accountable for its supply chain for the following four reasons:

  1. “… any company that produces a large amount of hardware must bear the responsibility for the environmental and social costs incurred during the manufacturing process.
  2. Secondly, the suppliers who violate the standards for levels of pollutants emitted and who ignore environmental concerns and workers’ health do these things with the aim of cutting costs and maximizing profits.
  3. Thirdly, Apple Inc. understands that when passing the blame for social responsibility it can be difficult to pull the wool over the eyes of the general public.
  4. Fourthly, many people do not understand that Apple and other brands’ outsourcing of production is not the same as ordinary purchasing behavior. Various sources of information show that Apple is deeply involved in supply chain management – from the choice of materials to use to the control of clean rooms in the production process.”

Meyer analyzes possible reasons for Apple’s response and concludes that despite having a defensible position, the company is still taking a considerable risk by refusing transparency.

The full post, “Chinese NGO Claims Apple Supply Chain Sustainability Is ‘Rotten to the Core.’ Will Consumers Agree?

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