Manage the Suppliers That Could Harm Your Brand

Companies have long faced reputational risks from harmful and abusive working conditions in their supply chains. In the 1990s exposés revealed rampant child labor and brutal conditions in factories making products for Nike, marring the brand’s carefully cultivated image. In the early 2000s Apple faced a barrage of activist pressure and embarrassing media coverage following a rash of suicides at the factory of its supplier Foxconn. The pandemic is placing a new spotlight on such dangers: Consider the media allegations of low wages and inadequately protected frontline workers at UK suppliers’ factories making apparel for Boohoo and the swift action by investors and retailers to dump the brand. One strategy that many companies adopt to avert such problems: Impose codes of conduct that stipulate minimally acceptable working conditions in suppliers’ factories. Numerous firms also periodically audit their suppliers to assess compliance.