Dive Brief:

• Unilever has undertaken a "put your money where your mouth is" initiative regarding full disclosure of its palm oil sources, Supply Chain Digital reported Tuesday. 
• Though the company first addressed the need for sustainable palm oil sourcing in 2013, this most recent effort will provide the ultimate in transparency, allowing Unilever to identify and address issues within its palm oil supply chain. This could improve investigation and cooperation between Unilever and its suppliers, NGO partners, local governments and other stakeholders.
• The company hopes that by offering its own example of "radical transparency," other companies involved in the harvesting of palm oil will follow suit and increase sustainability.

Dive Insight:

As sustainable and ethical sourcing becomes more and more important to consumers, large companies are feeling the pressure to investigate their own supply chains and rid them of illegal or unethical activity.

Companies like Nike have severely struggled with this in the past. After learning about human rights abuses within Nike's supply chain, University of Georgetown students demanded the university end its contract with the athletic wear giant, leading to consumer boycotts and protests.

In September 2017, Nike finally agreed to third-party audits for its supply chain, allowing the Worker Rights Consortium to routinely investigate Nike's factories in developing countries.

For other companies like Unilever, Nike's example was a wake-up call. Boycotts and protests always stain a company's reputation and image, but human rights abuses and unethical practices leave a tarnish that's even more difficult to remove.

The hard part is, many big companies are so large and sprawling that they don't always know what's going on in their supply chain, and when. The larger the company, the more opaque operations tend to be throughout the supply chain.

Unilever's move is strategic: by taking responsibility for its supply chain's practices before it's even aware of potential problems, Unilever solidifies itself in the good graces of consumers, clients and suppliers, giving the company the freedom to investigate its own supply chain more carefully and increase transparency.