Recently, the US senate passed a far-reaching bill that targets the use of forced labor in China’s Xinjiang province. The problem of forced labor has been an issue and a proverbial black mark on otherwise ethical supply chains and products. With holidays around the corner, two questions are on most people’s minds: a) Will holiday gifts be stocked up on shelves?, and b) Are these gifts tied to any environmental, social, or governmental (ESG) supply chain controversies?
ESG Supply Chain Issues Remained In Hiding for Decades
Since the 80s, as the global economy opened to become more interconnected and supply chains spread out far and wide in the search for efficiency, we lost sight of the fact that the interconnectedness also led to a curtain being drawn upon how goods were sourced, manufactured, and supplied. Initially, we marveled at the machine that could efficiently move, within days, from a remote factory to our doorstep at ever-reduced costs.
We had no way to know that in some cases, behind the curtain, was an inconvenient truth. Some of these products we consume are not sourced via ethical supply chains, but are instead associated with environmental damage and unethical labor practices. Recently, the movement to combat environmental damage and eradicate unethical labor practices has accelerated, making ESG supply chain concerns a prominent focus for executives. This acceleration is driven by availability of data and information, easily consumable at everyone’s fingertips.
Creating an Ethical Supply Chain
With the passage of this bill, we are now entering a new phase. The grassroots movement is now turning into law of the land. Regulators are stepping in, recognizing the need to act, and increasingly setting the standard which is not merely aspirational, but de-facto. This bill bans all imports from China’s Xinjiang region unless companies prove they were made without forced labor. Companies will very quickly need to ensure that they do not source from this region to avoid becoming embroiled in ESG supply chain problems. In many cases, the most effective tool available, sending out surveys, is clearly ineffective.
There is a better way to not only comply with this new regulation, but to ensure that your reputational risk is low and that you are really orchestrating the ethical supply chain that you and your organization aspire to. With the power of data, AI, and machine learning, Interos’ customers get immediate sub-tier visibility into exactly where they are sourcing their products from.
Not only can you use Interos’s Operational Resilience Cloud to identify where you are doing business, but you can also see where your suppliers’ suppliers are, and so on. At the top of this blog is a video of how you can use our platform to perform due diligence on your compliance with this bill, giving you that initial tool to identify your risk of exposure.
It is no longer enough to say “we did not know”. Customers, and now regulators, are drawing a line in the sand that it is not enough. Interos gives you sub-tier visibility, so you can sleep better knowing that you are living your values, and now, complying with the law and creating an ethical supply chain.
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