Can traceability help meet the growing demand for supply chain transparency?

In recent years, demand has grown for increased transparency in global supply chains to ensure compliance with social responsibility requirements, including labor rights such as the prohibition of child and forced labor. Initial efforts suggest that traceability tools can help identify and mitigate risks in certain supply chains, particularly when combined with other compliance and due diligence efforts.

Our driving question: How can we develop meaningful, sustainable and cost-effective traceability protocols and tools that show measurable results?

Step 1: Define key terms and concepts

Defining terms and concepts help ensure that trace efforts are working in a common framework. To this end, the Global Trace Protocol (GTP) Project published the Traceability Glossary (2022), which provides definitions for key terminology in traceability, labor rights, and supply chain due diligence – integrating sources from the International Labor Organization (ILO), the International Organization of Standardization (ISO), the Organization of Economic Cooperation and Development (OECD), the International Social and Environmental Accreditation and Labelling Alliance (ISEAL), the UN Economic Commission for Europe (UNECE), and the Global Sustainability Standards Board (GSSB), among others. With established definitions, we are better able to establish goals, develop strategies and implement meaningful performance indicators.

The Traceability Glossary defines traceability as “the ability to identify and trace the history, distribution, location and application of products, parts, and materials, to ensure the reliability of sustainability claims, in the areas of human rights, labor (including health and safety), the environment and anti-corruption.”

Step 2: Assess the traceability landscape and choose the most effective approach for your supply chain.

To support this step, the GTP published the Context Report: Global Supply Chains, Labor Rights and Traceability (2022), which addresses:

• The legal, regulatory and business drivers for enhanced due diligence with traceability;
• Due diligence and risk assessments for labor rights;
• Tools for identifying levels of risk and addressing supply chain “choke points”;
• The traceability landscape and its chain of custody models and certification programs;
• Data management standards and approaches for tracing; and
• Technology solution providers related to tracing.

The Context Report explains the evolution and sources of the traceability definition (pp.1-2), as well as other key concepts.

Where is traceability being tested?

The GTP Project is piloting trace protocols and tools in two very different supply chains: Pakistan’s cotton and the DRC’s cobalt supply chains. Lessons learned will support the development of a commodity agnostic publicly available tool with supporting due diligence guidance. Supporting the textile and apparel sector, the Project published the Pakistan Cotton Supply Chain Mapping Report (2022). In support of the semi-conductor and mineral sourcing sector, it published the Cobalt Supply Chain Mapping Report (2022). While traceability and labor rights concepts are the same for both sectors, the nature of the supply chains, risks, and levels are choke points are quite different. These similarities and differences are informing the development of commodity agnostic tools. The Project is in dialogue with other trace efforts to craft our approaches more effectively.

A trace roadmap

With clarity on key concepts and the traceability landscape, implementation should take these steps:

1. Assess individual supply chain characteristics, including tiers and “choke points”;
2. Choose due diligence and chain of custody methods appropriate for the supply chain;
3. Assess risk types in each supply chain tier and tailor the trace protocol and tool to meet the circumstances;
4. Choose a labor rights protocol grounded in international principles and norms with key data elements and critical tracking events that are relevant and susceptible to accurate collection;
5. Determining how the trace system will interact with other transparency/traceability programs, regulatory enforcement bodies, and civil society actors, such as worker and employer organizations, to ensure sustainable effective implementation.
6. Establish a process of continuous improvement to evaluate and improve the trace tool performance and collaborate with other trace pilots to harmonize approaches.

Step 3: Run subsequent trace tool versions

A process of continuous improvement will support regularly updated, improved and expanded trace tools. This step is critical because supply chains and the technology to address them are complex and constantly evolving. Trace technology should also be applied in conjunction with robust due diligence approaches, such as ELEVATE/LRQA’s assessment tools.

What questions do trace developers have for brands and other key stakeholders?

To be effective, trace efforts need to hear from those in the supply chains:

• How can traceability help improve transparency in your supply chain?
• What gaps in due diligence can traceability help fill in ESG due diligence performance?
• What impediments have you encountered in traceability?
• What are your goals and experiences related to transparency?
• What is the role of governments, worker and employer organizations, civil society organizations, and other stakeholders regarding traceability?

The GTP Project is engaging in dialogue with brands and other stakeholders to ensure that traceability provides a useful and sustainable set of tools to ensure compliance with international labor standards, including the prohibition of child and forced labor.

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These blogs are written by ELEVATE staff members or associates and the views and opinions expressed are not necessarily those of ELEVATE.