Supply Chain Structure as a Critical Driver of Sustainable Supplier Practices

As technology improves the transfer of information, a broader range of customers and stakeholders gain access to more information about what happens within supply chains. As a result, issues like poor worker conditions in suppliers’ facilities are increasingly pushed into the limelight. What used to be hidden behind long distances and language differences is more visible (Lee, 2002; Van Der Zee & Van Der Vorst, 2005). As a result, consumers, governments, and nongovernmental organizations (NGOs) are demanding that companies be held more accountable for what happens. Concerns include the use of sweatshop labor, the provision of safe working conditions, and the payment of a living wage to their employees. In response, a growing number of firms are exploring how to identify, assess, and monitor supplier-related social issues and practices. They can monitor their suppliers to ensure adherence to social expectations, conduct audits, or use a certification provided by an independent third-party. Fairtrade (Fairtrade, 2007) is one such thirdparty certification for agricultural commodities such as coffee and cocoa beans. Following an audit, certification is granted to cooperative farms in developing countries that adhere to a number of sustainability-related principles, including safe working conditions for employees, payment of fair wages, and environmentally friendly cultivation techniques. In contrast, other firms choose to develop their own standards internally, for example Starbucks’ system for assessing and working with farmers, termed Coffee and Farmer Equity (CAFE).