Ethical issues in a Supply Chain Management – The unseen behind the scenes

Consultivo Blog | Social & Sustainability

Ethical issues are not just confined to the course of production,

but also involves several other layers of middlemen, traders & retailers till it finally reaches the consumer.

Ethical Issues in Supply Chain | Supply chain doesn’t merely involve moving of raw materials or products in a systematic flow to end in the delivery of the final product.

It involves interaction of human beings at each step giving rise to a number of issues. Most of the time, we tend to forget these interacting elements and just focus on the final product or outcome.

Do we ever stop & think about the numerous issues involved when the product changes its form going through various hands while moving up the chain?

These issues remained under wraps in the past but it is not so anymore. With the advent of media & fast communications methods, these news are just a click away from the people. Consumers are much more aware and take their decisions based on these perceptions, thus becoming “ethical shoppers or consumers”.

Ethical issues are not just confined to the course of production, but also involves several other layers of middlemen, traders & retailers till it finally reaches the consumer. A dive down the back end supply chain would take us further to the production of the “raw materials” thus giving rise to a complex web of the supply chain.

In the entire system, there are a number of issues, that can be broadly divided into four categories: Business Ethics, Labour & Welfare, Health & Safety & Environment. Besides these, there are relevant national & local legal requirements that one must take into consideration rather than just focusing on the compliance vs the non-compliance. One must note that the lapse on any of these forms a major risk or threat to the organisation & thus directly affecting its sustainability.

The degree of problems varies from country to country. Developing countries face the challenges of Child labour, adolescent workers, basic minimum wage, overtime & above all health & safety of the workers. Environment impact & the product footprint is also a major cause of concern starting from pollution – air, water & soil, ecological aspects, biodiversity, flora & fauna, greenhouse gas emission, energy consumption, water consumption, waste management along with the legal compliances wherever applicable.

Before declaring the product ethically sourced & ethically produced, one needs to think whether the above mentioned issues are taken care of in real sense or is it looked through a rose-tinted glass. With the world shrinking day by day in terms of distance & communication, one must admit that business practices cannot be continued in its conventional or orthodox form.

One has to introspect & think of ways to bring sustainability in business by taking care of the ethical issues in its supply chain rather than making an excuse & finding an easier & shorter escape route. It might give a relief for a short period but unfortunately, the road would end soon & the fall would eventually happen !!

Are unlisted companies covered under BRSR requirements?

Business Responsibility and Sustainability Reporting and unlisted companies

As per the MCA committee recommendation, the reporting requirement may be extended by MCA to unlisted companies based on specified thresholds of turnover or paid-up capital.

Further, the committee recommends that on a voluntary basis, smaller unlisted companies below this threshold limit may adopt a lite version of the format.

Two formats for disclosures are available; a comprehensive format for listed companies; and a lite version for unlisted companies, in case it is extended to them.

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