While we can all applaud FTSE4Good for recently launching a supply chain labour standards requirement for indexed companies, the requirements do not currently extend far enough down the supply chain to truly mitigate brand risk.

Significantly, after recognising that “labour standards are of greatest concern beyond the first-tier suppliers,” FTSE4Good will currently limit the application of the supply chain labour standards criteria to the first-tier suppliers only, or those with whom companies have a direct commercial relationship.

This is apparently due to the fact that even engaging the first-tier suppliers is a difficult step for many companies. In addition, companies have much greater influence with the first-tier supplier and therefore can have a more immediate impact.

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