By Andrea Brody, Chief Marketing Officer at BravoSolution

If procurement leaders don’t realize they have significant responsibility to protect the corporate brand, they should watch the latest documentary from a German broadcasting station which uncovered cruel labor and animal welfare practices in the making of major ingredients in Haribo gummy bears. The investigation is called Markencheck which literally means Brand Check! You can’t get any more real about the role procurement has in protecting the company’s brand equity.

In the case of confectionary company Haribo, the German documentary called attention to the company’s use of slave labor in Brazil. Turns out that gelatin and carnauba wax, two key components of the company’s famous gummy bears, are sourced from areas involving inhumane working conditions and animal abuse.

Haribo claims to not have known about the reliance on slave labor, but the harsh reality is that unethical practices can exist in any supply chain, even those of large, well-known brands. By nature, multinationals have more supply chain complexity to manage and are less connected to original supply sources, making them more prone to sustainability issues. Household brands have a lot to lose when this happens – the negative effect of supplier scandals can impact everything from sales and stock price to PR and consumer trust. With millennials’ purchasing power increasing, and their rising demands for sustainable and ethical manufacturing practices from the brands they do business with, companies can ill afford even one mishap.

Prevention pays: Procurement’s role

Without a holistic, integrated procurement strategy that offers extensive visibility into the supply base, anticipating and mitigating unethical practices is very challenging.

Empowering suppliers, and setting them up for success, is a critical step for risk mitigation. Use tools that put supply partners at the center of the procurement landscape and make it easy for the supply chain team to gather insight into suppliers’ ethics, labor practices, business operations, and working conditions. This leads to a holistic view of performance and allows procurement to anticipate issues before they occur. The collaborative and transparent relationship also gives suppliers the edge they need to improve practices over time.

Procurement also needs to consider supplier sustainability and CSR practices when selecting suppliers. This sets the stage for future dealings and ensures both buyers and suppliers are on the same page when it comes to ethical standards. Confirming that prospective supply partners have the required legal, financial and environmental documentation in place to deliver products and services in a specific category may seem like a simple box to check during the sourcing process, but it truly goes a long way. Waiting until a formal relationship exists to talk about sustainability expectations makes it difficult to retroactively set parameters and ensure alignment. The bottom-line: to reduce the risk of CSR surprises and scandals, sustainability needs to be a key criterion when sourcing and evaluating bids.

No company wants to find out through the media or a documentary that their operations are a breeding ground for forced labor.

From the outside, it appears Haribo is taking the right steps. The company is launching an investigation into the matter and conducting an audit of its suppliers and their operations to eradicate forced labour and other issues. The takeaway for procurement teams: you are the defenders of the corporate brand and supplier relationship management must be a critical focus. The right technological solution can provide the visibility, allowing senior level decision-makers access to actionable information quickly. It can help eliminate risk and provide truly global views of supply side relationships through proper on boarding, qualification and segmentation capabilities.