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OVERVIEW

Embedding externalities (e.g. laborer rights, legal accountability, and environmental stewardship) into supply chains is critical to sustainably managing our planet’s resources. Companies need to manage its business risks more effectively, regardless of the personal viewpoints of their CEOs or staff.

Size/Magnitude of Problem

Supply chains are inextricably linked with environmental and social issues such as deforestation, climate change, water management, pollution, and exploitative labor practices. Our planet’s finite resources will be pushed to their limits as global consumption accelerates in the coming decades. The estimated benefit of transitioning the global economy to a sustainable, “circular” economy with optimized resource recycling is more than $1 trillion in material savingsi. While it is difficult to estimate the size and magnitude of the global supply chain, examples of its impact include:

  • 46,000-58,000 square miles of forest lost each year, mostly due to clearing for agriculture.ii
  • 168 million child laborers, more than half in hazardous work,iii and 21 million victims of forced labor globally.iv
Desired Equilibrium

Global supply chains are managed to create long-term value for all stakeholders, effectively managing finite resources, minimizing waste, and providing safe, dignified working opportunities. Complex supply networks are held accountable for environment and labor standards through consumer- and policy-driven systems of transparency.

Ways Skoll social entrepreneurs are addressing the issue:
  • Engaging corporations and investors to factor social and environmental externalities into business strategy (Ceres, Imazon, Institute of Public and Environmental Affairs, Marine Stewardship Council)
  • Making global supply chains more transparent to influence key actors (e.g. consumers, policy makers, companies) to steer toward responsible products (Fair Trade USA, GoodWeave, Global Witness, Institute of Public and Environmental Affairs, Marine Stewardship Council, Verite)
  • Leveraging existing legislation to hold supply chain stakeholders accountable (Ceres, Global Witness, Institute of Public and Environmental Affairs, Verite)
  • Collecting and presenting data to drive transparency (Fair Trade, GoodWeave, Imazon, Institute of Public and Environmental Affairs,Marine Stewardship Council, Verite)
References

i World Economic Forum (link)
ii World Wildlife Fund (link)
iii International Labor Organization (link)
iv International Labor Organization (link)

Critical Geographies
People in Modern Slavery

As defined by Global Slavery Index (>500,000 people)
India, China, Pakistan, Bangladesh, Uzbekistan, North Korea, Russia, Nigeria, Democratic Republic of the Congo, Indonesia, Egypt, Myanmar

CO2 Emissions

As defined by the World Bank (>15 metric tons per capita)
Qatar, Trinidad and Tobago, Kuwait, Brunei, Luxembourg, United Arab Emirates, Oman, Saudi Arabia, Bahrain, United States, Australia, Kazakhstan