{"id":3112,"date":"2024-10-25T09:28:06","date_gmt":"2024-10-25T13:28:06","guid":{"rendered":"https:\/\/damore-mckim.northeastern.edu\/cem\/?post_type=dmsb_resource&#038;p=3112"},"modified":"2024-10-25T09:28:06","modified_gmt":"2024-10-25T13:28:06","slug":"smart-disclosures-and-human-rights-in-the-apparel-industry","status":"publish","type":"dmsb_resource","link":"https:\/\/damore-mckim.northeastern.edu\/cem\/resources\/smart-disclosures-and-human-rights-in-the-apparel-industry\/","title":{"rendered":"Smart Disclosures and Human Rights in the Apparel Industry"},"content":{"rendered":"\n<p><em>This brief is part of the <\/em><a href=\"https:\/\/damore-mckim.northeastern.edu\/cem\/insights\/\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Insights @ Center for Emerging Markets<\/em><\/a><em>, a publication focused on cutting-edge ideas and advice for global leaders about emerging markets<\/em>.<\/p>\n\n\n\n<p><strong>By Stephanie Lu Wang (Indiana University Bloomington), Yejee Lee (Indiana University Bloomington), &amp; Dan Li (Indiana University Bloomington)<\/strong>&nbsp;<\/p>\n\n\n\n<p><em><strong>In short: <\/strong>The collapse of the Rana Plaza factory in Bangladesh, a tragedy that injured over 3,500 garment workers, served as a stark reminder of the human cost of opaque global supply chains. In its wake, a renewed focus on human rights within the apparel industry has emerged, pushing businesses to adopt innovative solutions to ensure ethical sourcing and production. Smart disclosures, a technologically driven approach to transparency, is increasingly being utilized by multinational corporations (MNCs) to improve visibility and accountability throughout their supply chains, offering a promising path towards safeguarding human rights.<\/em><\/p>\n\n\n\n<p>Frameworks like the OECD Guidelines for Multinational Enterprises exist to promote responsible business conduct. However, enforcing these standards across sprawling global networks can be challenging. Protecting human rights is not just an ethical imperative, it is vital for brand reputation and mitigating legal and financial risks. Through the use of smart disclosure, forward-thinking companies are leveraging technology to address these challenges, aiming to prevent human rights abuses like child labor, forced labor, and human trafficking.&nbsp;<\/p>\n\n\n\n<p>Smart disclosure goes beyond merely data collection and data disclosure regarding a company's supply chains. It provides a platform that leverages various digital tools to enhance stakeholders' access, and understanding, and utilization of this information. This approach encompasses four key properties:&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Accessibility (making data easy to access and readily available to all relevant stakeholders)&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Programmability (offering raw data in a format that allows stakeholders to analyze it using their own tools and systems)&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Interactivity (enabling real-time interaction, feedback, and engagement between the company and stakeholders regarding the disclosed information)&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Standardizability (ensuring the information is aligned with common industry standards or frameworks, making it easier to understand and compare across different contexts).&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Empricially, this paper tests the effectiveness of smart disclosure in the apparel sector. The apparel industry, with its complex and often geographically dispersed supply chains, is particularly ripe for leveraging smart disclosures. In fact, some global apparel firms are already utilizing digital technologies to track their suppliers and monitor compliance with human rights standards. For instance, companies like Nike that offer comprehensive, downloadable data on their suppliers are leading the way in fostering transparency. Similarly Adidas, by encouraging public discussion of disclosed data on social media platforms, demonstrates a commitment to open dialogue and accountability. However, others remain significantly behind.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Incentivizing Disclosure<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Wang and her colleagues analyzed thousands of MNC-supplier relationships over several years and found a strong impact of the adoption of smart disclosure by multinational buyer companies on a reduction in human rights violations among their suppliers worldwide. <\/p>\n\n\n\n<p>The key argument is that smart disclosure enhances visibility, enabling MNCs to more effectively serve as &#8220;institutional carriers\u201d. Institutional carriers refer to organizations or individuals that help spread, embed, and maintain institutional regulations, norms and values across different contexts. In this context, MNCs often act as institutional carriers by transmitting and promoting values of human rights protection.\u00a0<\/p>\n\n\n\n<p>The study also highlights the importance of connectivity within the supply chain. Suppliers with numerous connections to other suppliers and customers are more likely to prioritize compliance, driven by the need to maintain a strong reputation for securing future contracts. Conversely, suppliers with limited connections might be less incentivized to uphold high standards, potentially facing less scrutiny and reputational pressure.&nbsp;<\/p>\n\n\n\n<p>Furthermore, the research underscores the role of the broader societal context in which suppliers operate. Suppliers located in countries with robust civil societies, such as non-governmental organizations (NGOs), tend to exhibit better disclosure practices and higher levels of compliance. The increased visibility in such environments leads to greater social and legal pressures on suppliers to adhere to human rights standards.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Managerial and Policy Implications<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Smart disclosure is not a panacea, but it represents a powerful tool for driving positive change within the apparel industry. Wang and colleagues' research shows that digital technologies can help MNCs create transparency to eradicate human rights violations from their global supply chains. For policymakers, fostering infrastructure for smart technology infrastructure (e.g., big data, blockchain-powered systems, etc.) can lead to positive social development outcomes. Supporting NGOs and building local institutions in supplier countries is also key to enhancing MNCs' smart disclosure and reducing human rights abuses.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Original Work<\/h3>\n\n\n\n<p>Wang, S. L., Lee, Y., &amp; Li, D. 2024. <a href=\"https:\/\/link.springer.com\/article\/10.1057\/s41267-024-00698-3\">Smart disclosure: an enabler for multinationals to reduce human rights violations in global supply chains<\/a>.\u202f<em>Journal of International Business Studies<\/em>, 1-20.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Contact<\/h3>\n\n\n\n<figure class=\"wp-block-image alignleft is-resized\"><img decoding=\"async\" src=\"https:\/\/kelley.iu.edu\/images\/vitae\/slwang-768.jpg\" alt=\"Stephanie Wang\" style=\"width:150px;height:auto\" \/><\/figure>\n\n\n\n<p>If you are interested in learning more about this work, contact Professor Stephanie Lu Wang at <a href=\"mailto:slwang@iu.edu\">slwang@iu.edu.<\/a>  <\/p>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The collapse of the Rana Plaza factory in Bangladesh, a tragedy that injured over 3,500 garment workers, served as a stark reminder of the human cost of opaque global supply chains. In its wake, a renewed focus on human rights within the apparel industry has emerged, pushing businesses to adopt innovative solutions to ensure ethical sourcing and production. Smart disclosures, a technologically driven approach to transparency, is increasingly being utilized by multinational corporations (MNCs) to improve visibility and accountability throughout their supply chains, offering a promising path towards safeguarding human rights.<\/p>\n","protected":false},"featured_media":3113,"template":"","meta":{"post_unlisted":false,"post_preheader":"","post_footer":""},"category":[36,57],"dmsb_audience":[66,65,64],"dmsb_group":[],"class_list":["post-3112","dmsb_resource","type-dmsb_resource","status-publish","has-post-thumbnail","hentry","category-insights","category-supply-chains","dmsb_audience-academics","dmsb_audience-practitioners","dmsb_audience-students"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Smart Disclosures and Human Rights in the Apparel Industry - Center for Emerging Markets<\/title>\n<meta name=\"description\" content=\"The collapse of the Rana Plaza factory in Bangladesh, a tragedy that injured over 3,500 garment workers, served as a stark reminder of the human cost of opaque global supply chains. In its wake, a renewed focus on human rights within the apparel industry has emerged, pushing businesses to adopt innovative solutions to ensure ethical sourcing and production. Smart disclosures, a technologically driven approach to transparency, is increasingly being utilized by multinational corporations (MNCs) to improve visibility and accountability throughout their supply chains, offering a promising path towards safeguarding human rights.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/damore-mckim.northeastern.edu\/cem\/resources\/smart-disclosures-and-human-rights-in-the-apparel-industry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Smart Disclosures and Human Rights in the Apparel Industry - Center for Emerging Markets\" \/>\n<meta property=\"og:description\" content=\"The collapse of the Rana Plaza factory in Bangladesh, a tragedy that injured over 3,500 garment workers, served as a stark reminder of the human cost of opaque global supply chains. 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