The Reality and Implications of Supply Chain Transparency and Small Businesses

Sustainability and promoting eco-friendly practices is something we do year round, but this month on July 3 is International Plastic Bag Free Day! In celebration of this day, we highlighted one of our members, Alterfab (external link, opens in new window) , which makes eco-friendly and sustainable products such as bags, totes, cosmetic pouches, and much more!

The additional procedures and practices that are necessary for one to be a sustainable business are a massive challenge for founders and business owners. In this article, we specifically dive into sustainability in the context of supply chain transparency, and why businesses need to start taking it seriously.. 

In this article, we focus on 3 aspects that are changing:

1. The Consumers
2. The Companies
3. The Practices

But first, what do the consumers think?

“Certifications are an excellent tool in creating accountability and improving conditions along the supply chain. However, they have their limitations especially when it concerns micro-small enterprises (MSE). Certifications are tools well-suited for big business, as many are behind paywalls where cost becomes a barrier for MSEs (e.g. B- Corp (external link, opens in new window) , ISO (external link, opens in new window)  or LEEDS (external link, opens in new window) ). Certifications typically require extensive documentation and time, adding additional tasks to an already overloaded design entrepreneur. Even the use of certified materials adds additional costs for an MSE who pays far more for fabric already as they are unable to take advantage of economies of scale. Certifications can also be limiting, as an organization will only ever improve to the standards required by the certification. In my research, I have found that most MSEs have very close relationships with the stakeholders within their supply chain, thereby rendering the use of a certification mute. They have these close relationships as MSEs often produce locally, spending significant time in the factories. Certifications are primarily used by large organizations who cannot physically be there to ensure safe and ethical working conditions and processes. It is far more productive for MSEs to focus on other aspects of sustainability that are more accessible and resonate with them by aligning with their values. 

Fashion is optimized for big businesses which creates many challenges for MSEs, especially in terms of access to novel sustainable materials and environmentally-friendly innovations. Barriers to access include high minimum order quantities (MOQ) on materials, increased costs and proprietary rights. Innovations in processes (e.g. Dyecoo waterless dyeing) and materials (e.g. Mycoworks) are often expensive to develop and can be developed in partnership with large firms. These firms then gain proprietary access, such as Nike (external link, opens in new window)  was able to do as a major investor into Dyecoo technology (external link, opens in new window) . This is why it is unproductive for MSEs to try and compete with larger firms using the same tools, processes and materials. MSEs have their own set of strengths because they already work with embedded value systems that prioritize social and environmental wellbeing, and frankly, do not need the tools used by larger companies. MSE’s have already surpassed the strategies and tools used by the Nikes and H&M (external link, opens in new window) ’s of the world due to their value systems, stakeholder relationships and small-scale networks. Small is beautiful in its own right.”