Supply Chain Transparency

In our class yesterday, Mr William Anderson of Adidas offered some interesting insights on consumer behavior from his perspective, notably that green products are not necessarily as in high demand as educated buyers might think.

Coincidentally, I just received this e-mail broadcast from social entrepreneur and ethics professor David Batstone, founder of the Not For Sale Campaign against human trafficking and slavery, about Free2Work.org, a new initiative he is helping launch to provide consumers with a tool that evaluates the labor standards and ethical practices of a company’s supply chain:

Consumers Want Transparency & Honesty

Out of necessity the average consumer has developed a keen sense of what constitutes a good deal. Pre-2008 consumers who rarely thought about how their favorite products were produced are now taking a second look and rethinking their consumption habits. Having an interest in the products one buys can have an unintended side effect: a greater understanding and concern for labor issues and connection to them. Production of one given product can be extremely complex. In an age of globalization it’s not uncommon for one product to cross the Atlantic twice before reaching a consumer. Increasingly consumers are interested in buying responsibly, but that simple task becomes daunting with no credible method to accurately inform the consumer.

Today an entire industry, popularly referred to as “Corporate Social Responsibility,” exists to help companies deal with their supply chain and implementation of codes of conduct. Unless you have an MBA in supply chain management, however, you remain very much in the dark. As a social entrepreneur I saw a need for a tool that could bridge the gap between companies and the consumers looking for an independent and understandable evaluation of a company’s ability to prevent forced labor.

The Not For Sale Campaign has partnered with the International Labor Rights Forum to create a new tool for that very purpose. Free2Work.org mediates a widely accepted set of standards that, when followed, ensure supply chain transparency and ethical labor practices. Additionally Free2Work.org allows for consumers to share relevant information and support their favorite companies. Companies are rated by a common standard, which evaluates corporate policies, code implementation, employee empowerment, child labor response, supplier impacts, transparency, and (when applicable) industry-specific data, outlining all efforts and shortcomings. Companies are rated from an “A” to “F”, the highest grade, A, goes to brands that champion a living wage and democratic worker organizations. The lowest grade, F, goes to brands that do nothing to review or improve conditions of suppliers.

Free2Work.org is not another corporate “gotcha” tool for consumers. Instead, Free2Work strives for transparency and engagement with companies to evaluate them on the information they make public. The majority of the fourteen initial companies rated fell within the average range, and while all have a code of conduct and had taken positive action, they lacked a comprehensive approach, and require a deeper level of transparency.

For example, Gap and Apple are leading the way with their system for child labor remediation, but their code of conduct doesn’t reach to all levels of their supply chain in a way that Timberland, Patagonia, and Jansport succeed. Timberland, a company that works to monitor their entire supply chain, could benefit on the other hand from how Apple addresses child labor when uncovered in its supply chain.

Companies and their workers can be severely affected by well intended yet misguided consumer boycotts that lack factual information and don’t engage the company. Rumors of labor violations lead some to act before understanding what that company’s actual policies on labor are. Free2Work offers the connection that has been missing thus far, and will hopefully enhance company transparency and reframe how companies and consumers interact. Without an increased understanding by consumers and a willingness to engage by companies, unintended labor abuses will continue.

So this Friday as the holiday shopping season begins, consider using Free2Work.org before embarking for the mall. Learn how that Zhu Zhu hamster on your nieces Christmas list rates and the difference between the GAP sweater you want and the one made by Patagonia.

Will you join me?

David Batstone

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13 Responses to “Supply Chain Transparency”


  1. 1 Ng Ka Yin, Karen 26/11/2009 at 9:14 am

    It’s good to have this free2work.org website for consumers to know if the products of certain company are involved child labor in the supply chain. It also allows the general consumers, who didn’t get a MBA in supply chain management, to make a better decision before buying the products.

    It is also good for the companies which are in the list in free2work.org to do better in the future to get a better rating. However, the website should be promoted to let everyone knows we can understand more about the products/companies before buying them. Otherwise, the website will be useless if it is not in widespread use.

  2. 2 Senia Ng 29/11/2009 at 6:45 pm

    This is what I have always wanted. I have always believed that the whole consumer chain is not transparent enough, in which even if I want to buy ‘humane’ products, I can’t.
    Sometime ago, I heard that Starbucks, who is a great advocate for CSR, had child slavery. It took me a great deal of effort to confirm whether this was true, and I couldn’t find an answer. These news were simply covered up, and who says the internet is a great source of all-rounded information? I am an active google user, and I tried looking into the issue there, but failed. I then tried YahooHK. And I saw many articles about the bad side of Starbucks…which was not shown in the lovely google search engine.
    I don’t know who is responsible for all these news hiding, but…I’m pretty sure it exists.

    I hope F2W is really going to help the world. I would be willing to use it as a reference in buying things. But then the site, perhaps too new, still needs some time to build up its database. And I believe it’ll need the great support of fellow citizens to sustain it…as companies will go furious upon the disclosure of their misconduct.

  3. 3 Irene Yeung 01/12/2009 at 11:02 am

    It is indeed very encouraging to see new initiatives like Free2Work.org being launched by influential social entrepreneur and ethics professor Batstone in providing consumers with means to help evaluate a company’s supply chain’s labor standards and ethical practices. The trend of putting great emphasis on supply chain transparency has gained much momentum and influence in recent years because on one hand, there is increased demand from consumers, retail buyers and investors for greener and more sustainable products. And on the other hand, though some may question the need for publicizing the company’s records, some entrepreneurs have growing interest and sense of responsibility in providing products of integrity, on top of their major interests in profit maximization. Despite such advancements in engaging companies to give more attention to transparency, it does not equate to accountability. Accountability implies consequences, yet initiatives like such do not seem to be binding and there are no penalties for breaking the rules. However, as soon as companies have been discredited by the public on forums like the Internet chatrooms or its poor codes of conduct have been revealed by the media, it would still be able to bring far- reaching consequences to the company in terms of reputation and even incomes. Eventually, these companies would also strive to give better records of tracking and pay more attention to the observation of international norms.

  4. 4 Chow Chung Kiu Jocelyn 01/12/2009 at 4:22 pm

    No doubt, putting production lines under spotlight is a ground-breaking initiative to let consumers identify socially responsible companies and in turn, generate economic incentives for companies to correct their practices;

    but other than correcting their own practices, there is so much more companies can do. Whilst we often comment that it is unrealistic to demand the private sector to “do too much” because business companies’ primary interest is to make-profit, such can be MADE realistic – all it takes is more creativity to create economic incentives for the private sector to get engaged. The STOP SEX TRAFFICKING CAMPAIGN is a good example of the civil society’s engaging the private sector in community advocacy – which has traditionally been “the job of the civil society”.

    The SEX TRAFFICKING OF CHILDREN & YOUNG PEOPLE CAMPAIGN has been initiated by ECPAT UK, a leading UK children’s rights organisation campaigning to protect children from commercial sexual exploitation. ECPAT stands for “End Child Prostitution, Child Pornography and the Trafficking of Children for Sexual Purposes”. In this campaign, ECPAT UK has engaged the Body Shop in spreading alarming messages about trafficking situations in the UK. Across the UK, all Body Shop stores have posted shocking images of child prostitution on their walls. Accordingly, the images are to capture the attention of passers-by and prompt them to walk into the stores to find out more about trafficking situations in the UK by fetching the newsletter jointly written by ECPAT and the BODY SHOP from the counter. Having understood more about trafficking situations, visitors may then choose whether to buy the ‘Soft Hands, Kind Heart’ hand cream produced by the Body Shop – £3.15 from each purchase will then go directly to ECPAT UK for anti-trafficking work.

    Official website of ECPAC UK: http://www.ecpat.org.uk/

    The campaign has been later extended to Body Shop chains in other countries – including Hong Kong, and has been proven a huge success. It depicts a win-win situation in which the Body Shop, as a private company, gets the chance to create a new line of products, strengthen its image and the at same time make certain profits out of the production; while ECPAT has got to utilize the market coverage and reputation of the Body Shop to spread its message.

    AND then we see – advocacy is no longer confined to the civil society; all it takes is some good ideas to create incentives to prompt the target sector to get involved.

  5. 5 Minerva Lee 03/12/2009 at 12:34 am

    I think it’s important that consumers are made more aware of the labour standards and eithical practices of a company’s supply chain, but I think we have to be more practical. The reality is that most consumers concern about the price most. It takes time to promote this kind of awareness to everybody in the developed countries. Other than through some accidental leaks of particular abuse of labour by big companies in the internet that compels the companies to take action immediately(e.g. the Nike sweatshops), CSR is largely a vague concept and companies are more motivated pasively (taking action only when a scene is caused), its effect is ambigious. So I think rather than working on the demand side, tackling the problem at the root in the production sites may be more effective.

    Take China as an example, migrant workers from the rural area come to work along the coastal production lines throughout the year and are subject to abuses like long working hours, no day-offs, and even physical abuses. Many of these factories are in fact owned by foreign enterprises. Instead of appealing to the consumers in the West (which is hard since these information regarding violation of labour rights are sensitive in the political arena and where the effect is ambiguious), since the Chinese government does have an interest in the issue (since it relates to social unrest ultimately), I think it would be more direct to cleanse the institutiional mechanism and seek proper enforcement of laws that have been legislated in China internally.

  6. 6 sophie pigot 03/12/2009 at 6:15 pm

    Free to Work seems like a great idea and I really hope it succeeds in making a difference. Unfortunately after spending some time searching the web there doesn’t seem to be any concrete evidence to support David Batstone’s belief that the generation of 35year olds are actually (in our actions) moving towards supporting CSR companies. Sure it’s nice to know that eating some Ben and Jerry’s means supporting a company that believes in CSR, but what proportion of people genuinely go out of their way to buy it especially of it was more expensive than Häagen-Dazs. Batstone has the right idea with the free2work website- name and shame companies that despicably believe that it is not their place to set moral standards as if its against nature or something.

    Even the speaker William Anderson- a human rights lawyer and Water expert(?) admitted that his job was to respond to complaints from workers rather than truly being proactive in genuinely making sure workers are treated properly. Advertising the awesome superiority of Adidas over Nike regarding CSR is a bit too easy. I found myself wondering if he ever feels torn between the plight of the workers ( in the philippines now for example) and the corporation he works for. According to the Adidas website they strive to give their employees a proper working wage, treat them properly etc yet I found that Bill Anderson was unable to give a practical account of why this is not been achieved yet. Of course if Adidas wanted to it could have its own factory in developing countries. Saying that it needs to get Wal-Mart on board before change can occur is a weak excuse.

    In disagree with David Batstone, “that Change isn’t about writing a letter to your congressperson; it’s about companies doing the right thing and people encouraging companies to do the right thing”. That is a bit convoluted, but in essence I think that it is necessary for government to crack down on companies in order to create an even playing field where the only game allowed is one that requires CSR. Is there a fundamental question about whether or not a MNC that engages in harmful business practices is better than no such existence of that MNC? Governments should set the agenda for social responsibility by the way of laws and regulation that will allow a business to conduct themselves responsibly. Of course there is an argument that even overwork is better than no work at all but is there any other viable alternative?

  7. 7 william anderson 03/12/2009 at 7:35 pm

    Perhaps I launched too quickly into the specifics and should have taken the time to spell out the breadth of the social compliance program run by adidas, and the efforts we have made over the past decade to improve the working conditions. It is not simply about responding to complaints, but we do see that as a step in the right direction when workers have enough understanding of their rights that they reach out for assistance. Also I mentioned that the large retailers like Walmart, Tesco’s and the like will set the benchmark for green labelling, but that does not mean that everyone is waiting to act only when that happens. Many companies have very good environmental programs in place and among the best in the Sports Goods Industry are Nike and Patagonia. Also I would say that Nike and adidas have very comparable programs, and equally committed people in the CSR field. In no way would I view the adidas program as superior to Nike’s. I am sorry if I left you, or others in the class, with that impression.

    I would also add one thought regarding your comment on regulating industries. Why do compliance programs such as those of Nike and adidas exist? Because the inadequate capacity of government enforcement, be it in labour inspections or health and safety. Ideally institutional strengthening and building better enforcement at a local level will over time eliminate the need for brands to police their supply chains.

  8. 8 Chiu Tsz Yin Rachel 04/12/2009 at 1:37 pm

    I found Free2Work a very useful tool to engage companies to participate in CSR. After learning CoCoa slavery from class I been reluctant to buy chocolate, and partially because I do not know which brand of chocolate has not been involved in child labor/slavery. The tool gives me ideas on companies which have been engaging in preventive child labor. Also, the primary function of the tool which is to engage more companies to get involved makes things better,because allowing the consumers to know which companies supply chains have involved in child labor does not necessarily combat child labor; yet by putting companies into a ‘competition’ and with the increasing transparency of the companies is the key to eradicate child labor problem around the world.
    But for this tool to be effective, i think more important, people must be educated about child labor first, otherwise if consumers don’t see it as a big deal, the tool may lose its function.

  9. 9 Chen Chuen Tien Nadine 04/12/2009 at 6:36 pm

    Since we’re on the topic of how consumer goods came about, I strongly recommend a look at this site: (http://storyofstuff.org/). Where do our things come from, and where do they go? Has our consumption mania naturally evolved from progressing times or was it designed and forced upon us as part of a corporate conspiracy? The site offers a provocative and eye-opening film that convicts consumers of their role in trashing our earth. In the debate of whether consumers or corporations should bear more responsibility over the issue of socially responsible products, I’d say we give up on looking to corporations for solutions. This clip http://www.storyofstuff.com/capandtrade/, produced in light of the upcoming Climate Change Conference, simply sapped away my last bit of hope in our businesses. Not that there aren’t any genuinely ethical corporations, but ethical businesses are unlikely to survive competition unless consumers respond to their effort (moreover, their numbers are few enough to begin with). Are corporations even capable of being moral agents? Are consumers any better? If we, the consumers, aren’t even willing to pay 10 dollars extra for a fair trade product, how can we expect businesses to forgo millions of profit or pay millions more in costs for the sake of sustainability and fairness? After all, we are the market… stop letting businesses manipulate the market! May the market decide business directions instead.

  10. 10 Winkie Fung Wai Yin 06/12/2009 at 9:51 pm

    Actually, I doubt whether the products being shown in the website do not involve any kinds of exploitation or not. I do not mean it gives us the wrong information, but in most of the cases exploitations still take place secretly even under strict inspections. Take China as an example, the badly treated workers in the factory are often forced to tell lies in front of the inspectors during the regular spot-checks, so as to prevent from losing the jobs or further exploitation as a penalty for telling the truth. No one knows. However, what I see the website is that, it helps raising the public awareness towards the inhumane exploitation. The more concern we are, the more pressure will be placed on the companies and governments to make efforts on mitigating exploitations.

  11. 11 Cheung Wai, Irene 07/12/2009 at 5:39 pm

    It sounds to me that this Free2Work tool is a great initiative that could expose the companies to scrutiny , putting pressure on them to fulfill their social responsibility and driving towards the end of worker exploitation. Without doubt, increased transparency is a good sign because more information is provided to the consumers. It is a necessary and crucial step towards enhancing corporate social responsibility and making the world a more humanised and better place to live in.

    But, I do wonder how much the tool can and will do to solve the roots of the problem. Ultimately, it’s hard for individuals and organizations like this to really dig deep into how the businesses really take care of the issue. Like, the supply chain is now so globalised. For one single corporation, its suppliers are placed all over the world. It requires really great efforts to monitor them. I mean, it is to be something done by the corporations themselves that would be most effective. So, I think some universal code of conduct or compliance have to be made so that there will some sanction power which can urge the companies to take adequate initiatives.

    Also, I really wonder whether consumers would really search for information form the tool to decide if they should the stuff from the companies based on the rating, especially for those famous brand names. They already have so much reputation and people sort of routinely buy their products. Is it really effective ? Anyway, it is still a good initiative, though.

  12. 12 Senia Ng 07/12/2009 at 6:12 pm

    In reply to Irene, yes I think the tool itself won’t initiate people to buy socially responsible products. After all, it will depends on every individual’s personal awareness of the problem, and his own decision in which he thinks he needs to change his consumer behaviour.

    Nonetheless, for those who have already developed such an initiative, but do not know where to start, the tool will prove its effect. It’s very hard to find out how each company is doing in terms of it social responsibility…(due to transparency problems..) So if free2work can build up its database, it’ll really be beneficial.

  13. 13 Marcus Chau Hon Wai 09/12/2009 at 3:05 pm

    Like climate change, unjust coporate behavior is something that require collective action of individuals to terminate.

    There should be intention for corporations to act morally, especially in their supply chains, which are often neglected. When legislation fails to be a means to regulate corporate behavior (as this would be a violation of economic liberalism), market force itself is the best way to give such as incentive to business. That’s why we need collective action from individual customers.

    Customers need an attention to how their goods are made, and at the same, having accurate information is crucial. Free2work.org is very good in doing both.

    To a society like Hong Kong, the meaning of CSR is seriously contorted, we urgently need this kind of action. Most importantly, without the advocacy of government, we are not going to succeed in invoking moral practice of business.


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