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Check out your suppliers ethical credentials

Jon Williams manages sustainability and corporate social responsibility at supply chain consultancy Achilles.

Clothing is one of the most global of all manufacturing industries, with textiles, clothing and footwear valued at $1.7trn (£1.01trn) in 2012 and employing about 75 million people. Yet concerns over ethical working conditions and child labour are rife.

Mitigating risk in the sector's supply chain is critical to protect its reputation. This was highlighted by last year's Rana Plaza incident in Bangladesh, the anniversary of which was last week.

Reported instances of poor supply chain practices are frequent, as is the associated damage to brands. So why are clothing businesses still struggling with the ethics of their supply chains?

While most retailers understand what is happening with their immediate suppliers, few are aware of what happens next. Achilles recently conducted research which suggests that most manufacturers do not understand the ethical credentials of suppliers supporting their businesses.

Only 51% of manufacturers regularly audit their tier-one suppliers in terms of ethics, or check that they do not use child workers or slaves. Even worse, only 38% of manufacturers audit their tier-two suppliers on the same criteria. A lack of due diligence exacerbates the problem.

The perceived risk associated with a supplier is often based on superficial trust and personal relationships. Given the challenges of manufacturers auditing, tracking and mapping their supply chains, the solution is to know the identity of all their suppliers and agree and implement standardised requirements.

If these bad practices are to be removed from the clothing sector, businesses need to understand their supply chains.

Critically, companies need to know a great deal more than they currently do about the sustainable performance of their suppliers and their suppliers' suppliers, and that means mapping the supply chain through all tiers and then applying due diligence/audits at every level.

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