BlogSupply Chain Sustainability/Circular EconomyWhat is an ethical supply chain? The answer is different for each supply chain.

There is no one fixed answer to the question “What is an ethical supply chain?” Just as no two supply chains are exactly the same, there’s no clear-cut route that all companies should follow to meet ethical standards. Supply chains involve many different stages, and working toward more ethical processes should include, at a minimum, implementing responsible labor practices, sourcing materials thoughtfully, and taking accountability for the environmental impact of business practices. In expansive supply chains, managing those aspects from beginning to end can be challenging. However, even making a small change can bring managers closer to a truly ethical supply chain. By switching to a local supplier, for example, a supply chain manager can display good citizenship, reduce their supply chain’s carbon footprint, and improve the likelihood that they support vendors who follow ethical labor practices. Some changes not only bring a company in line with ethical business standards, but also help companies save on their Total Cost of Business (TCOB).

What Is an Ethical Supply Chain? 

An ethical supply chain is environmentally responsible.Corporate responsibility is a major focus of today’s consumers. People want to work with businesses that are environmentally and socially sound. The three basic components of an ethical supply chain are:

  • Responsible labor policies: One major concern when it comes to the supply chain is ensuring that all employees are paid fairly. This includes employees who work for third-party vendors. Fair labor policies also include safe working conditions, injury treatment, and time off for workers. 
  • Ethical sourcing: Ethically sourcing materials and products means that suppliers should be able to obtain raw materials without depleting them entirely, and they should seek to replace the natural resources they do use when they’re able. One example of this would be buying crops from a vendor that keeps some trees in place when they plant instead of clearcutting forest. Ethical sourcing often overlaps with responsible labor policies, as thoughtful sourcing involves considering how workers who harvest or gather the products are treated. Finally, ethical sourcing may include the recycling of raw materials to avoid consuming natural resources. 
  • Environmental accountability: Building an ethical supply chain requires taking into consideration the effects of that supply chain on the environment. This means planning efficient transportation routes to cut back on fossil fuel usage and adopting energy-efficient policies in production. Companies should also consider how much waste they create and strive to build circular business models that reduce or even eliminate waste entirely. Environmental accountability may also mean being a good neighbor in the community by limiting noise pollution, odors, smog, and other waste emissions that are detrimental to health or quality of life.

There’s a single, supply chain-wide change you can make that supports ethical practices in the supply chain while lowering your company’s TCOB.

Implementing initiatives based on the categories above can help companies go a long way toward creating an ethical supply chain. But there’s also a single, supply chain-wide change you can make that supports ethical practices in the supply chain while lowering your company’s TCOB.

How Plastic Pallets Support Ethical Practices 

Plastic pallets support ethical practicesSwitching to pooled plastic shipping pallets is one of the simplest ways to drive corporate responsibility. Using plastic pallets has an impact on every component of an ethical supply chain:

  • Responsible labor policies: Plastic pallets weigh no more than 50 pounds, which is much less than a standard wood block pallet. This reduces the risk of lifting injuries by employees who handle them. In addition, plastic pallets don’t have metal fasteners or splinters that can cut or puncture employees working with the pallets. 
  • Proper sourcing: Wood pallets contribute to deforestation; while the usable lifespan of a wood pallet is only two or three years, a hardwood tree can take decades to reach maturity. Meanwhile, plastic pallets can last more than a decade and are often made from recycled materials that do not contribute to the depletion of natural resources. 
  • Environmental accountability: Unlike wood pallets, which eventually end up in landfills, plastic pallets are ground down and used to create new pallets when they reach the end of their usable lives. Pallet pooling also makes transporting pallets more efficient. Pooling providers have a truck fleet and broad network of clients that allows them to move pallets from the end of one supply chain to the beginning of another in a streamlined and fuel-efficient way. And since plastic pallets weigh much less than wood block pallets, they reduce fossil fuel usage during transport. 

Today’s consumers demand companies follow ethical labor practices.

So, what is an ethical supply chain? The definition isn’t set in stone, but ensuring ethical logistics practices does require assessing some basic areas of business. Today’s consumers demand companies follow ethical labor practices, source products and materials prudently, and take accountability for the environment. Switching to plastic pallet pooling is one way to put those ideas into practice and show that your company is taking its responsibility to the environment and the community seriously.

iGPS plastic pallets are an easy-to-implement component of an ethical supply chain. For more details, contact us at 1-800-884-0225, email a specialist at [email protected], or visit our contact page.