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06 December 2022
Brands need to ask questions of certification labels
Brands should be wary of relying on certification labels to reassure consumers that products are being made in a sustainable manner, whether that’s in terms of the supply of raw materials or the pay and working conditions of staff employed by suppliers.
Many global brands and retailers source their products from factories across the world, relying on social audits or private inspections of suppliers. Certification schemes, based on such audits, assess compliance with voluntary codes of conduct that have often been developed by brands themselves. Annual revenues in the auditing sector are estimated at around $300m.
Why it matters
Codes of conduct may acknowledge international labour rights standards to varying degrees, but social audits and certifications of suppliers are not enough to prevent and remedy abuses in global supply chains, according to a Human Rights Watch report.
Social audit reports about suppliers are not public and, in the case of certification, a lack of transparency means there is no information about why and how a particular facility was certified. This makes it harder to build trust with relevant stakeholders or monitor any progress of corrective actions.
While the primary impact of any deception falls on the workers involved, ultimately brands are potentially putting their reputations at risk with the buying public if the credibility of “certified” labels on products is called into question.
What brands should do
Companies and brands should publish audit findings, any planned corrective actions and the consequences for failure to implement those actions.
They should also disclose who paid for an audit, what the costs covered, and the methodology used, including whether in-depth interviews with workers were conducted offsite.
“Companies should be aware of the problems around social audits and certifications and make smart choices about how they invest resources for human rights due diligence” – Aruna Kashyap, associate economic justice and rights director at Human Rights Watch.