How Companies Can Create Ethical Supply Chains

Creating an ethical supply chain is clearly the right thing to do. But it can also help companies to cut costs and boost profits. ''Beyond Supply Chains'' is the name of a new report from the World Economic Forum, produced in collaboration with Accenture. It was intended to address the growing pressure on companies to ensure that their supply chains are having a positive social impact on the environment and local communities. The timing couldn't be better, given the litany of incidents we've read about in recent years: child labor, terrible working conditions in factories, the reliance on conflict minerals, environmental degradation and disasters such as the collapse of the Rana Plaza factory complex in Bangladesh. So it's essential that companies take steps to correct these deficiencies. As the report points out, however, they can also realize substantial commercial benefits from the effort. We're joined on this episode by Mark Pearson, senior managing director of strategy and operations with Accenture, who talks about 31 proven practices that yield a ''triple advantage'': socioeconomic improvements in local communities, improved sustainability, and benefits to the bottom line. He argues that doing the right thing doesn't always entail a tradeoff between moral behavior and commercial concerns.