World Fair Trade Day 2022 – Reflecting on Business Supply Chains
World Fair Trade Day 2022 is fast approaching on May 14, 2022, but the need for businesses to focus on their supply chains doesn’t hit the headlines just once a year. In fact, the ethical, legal, and reputational consequences of failing to pay attention to this critical issue are an ongoing concern that has never been more important to the boards and C-suites of companies around the world.
The actions of business have long been recognized as a key driver in effecting social change and enforcing ethical standards across the globe, as reflected in the UN Guiding Principles on Business and Human Rights, which were endorsed just over 10 years ago. Supply chains have faced significant disruption over the past two years due to the pandemic and, more recently, the war in Ukraine. But as competition for resources intensifies, so does the need for businesses to maintain and increase their understanding and oversight of their supply chains, as investors and consumers pay greater attention to human rights standards.
The last several years have seen many legal developments in this area. In the U.S., for example, the recently passed Uyghur Forced Labor Prevention Act will introduce supply chain due diligence requirements to address human rights concerns in the Xinjiang region of China. Both the UK and Australia introduced legislation dealing with modern slavery within businesses and their supply chains. And the EU has proposed laws mandating human rights due diligence.
Events like World Fair Trade Day will help keep the focus on these important issues. Businesses that take the initiative and proactively seek to meet current standards and to anticipate future developments could be seen as leaders in this area. And those who fail to take up the challenge are at ever greater risk of paying the financial, legal, and reputational price for not doing so.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.