Sedex: 1,000 Supply Chain Issues Plague Leaders Every Week

Sedex has revealed its member audits are uncovering approximately 1,000 critical supply chain issues each week.

The global supply chain sustainability provider's research shows 16% of its registered worksites across the world do not have measurements in place tracking whether suppliers and subcontractors are meeting the required labour standards.

More than a quarter (29%) say they don't know their end customers' environmental requirements, despite research indicating the majority of a company's emissions is likely in their supply chain (Scope 3).

Poor visibility no longer acceptable

Sedex's research showcases the common challenges businesses face when it comes to ensuring ethical and sustainable practices are being carried out throughout complex global supply chains. 

Jon Hancock, CEO at Sedex, says: "As awareness of practices and conditions in supply chains grows, companies are increasingly being held accountable for ethical, labour and environmental issues beyond Tier 1.

"Poor visibility is no longer an accepted excuse, as today's expectations from consumers, investors and beyond demand evidence of attention and action.

"With insights drawn from over 60,000 recent in-person assessments at supply chain worksites worldwide, our latest analysis highlights the power of on-the-ground, site-level visibility. Our insights also illustrate due diligence activities at scale – including progress made.

"Companies that face their supply chain challenges head-on with tools to conduct and demonstrate proactive risk management are more resilient, equipped with superior intelligence and better-placed to meet stakeholders' demands."

Inherent complexity

Sedex's on-site SMETA (Sedex Members Ethical Trade Audits) assessments are the world's most widely used social audit methodology.

Further analysis reveals that almost half of the worksites audited (46%) exhibit wage-related issues. These vary from a range of items, from minor discrepancies, like incomplete wage slips, to severe violations like failure to pay minimum wages.

This once again underlines the vital role of having site-level visibility and in-person observation to complement purely digital, remote tools for supply chain risk management and due diligence.

The SMETA data also highlights how those worksites which respect freedom of association have 30% fewer issues identified during audits, in contrast to those who do not.

Sedex believes this shows that, if given a platform to advocate for themselves, workers can significantly reduce both ethical and labour risks, which in turn provides the space for a more resilient supply chain workforce and operations.

The research also uncovered that worksites with at least 50% female representation in supervisory or managerial roles show fewer critical concerns. This finding points to the positive impact of gender-balanced leadership on workplace conditions and compliance.

Despite disrupted markets, policy uncertainty and the complexity inherent in global supply chains, many businesses continue their sustainability, responsible sourcing and due diligence efforts.

Sedex's data illustrates that companies, from small suppliers to multinational enterprises, are actively identifying risks, implementing changes and driving improvement, with more than 150,000 SMETA-identified issues resolved in 12 months.