Public support for heightened transparency and enforcement in sustainable global supply chains regulations

Published in Sustainability

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High-income societies of the Global North consume more than their respective territory and population could sustainably provide while preserving a high level of domestic environmental quality and good labor conditions. Recent evidence suggests that major improvements in environmental and working conditions in high-income countries have been achieved to a considerable extent by relocating pollution- and labor-intensive production processes to lower-income countries. The main enabler of such relocation dynamics is international trade and, in particular, associated global corporate supply chains.

 National governments in high-income democracies have begun to introduce or propose regulations on environmental and labor conditions throughout firms’ production networks overseas. This raises questions about factors that may enhance the political feasibility of new sustainability standards for global supply chains? To start with, one might assume that governments should have strong incentives to shirk their responsibilities in this realm, as stronger regulations of this kind would place domestic firms at a competitive disadvantage and potentially increase costs for consumers.  Further, firms should, presumably, prefer voluntary governance and oppose compulsory regulation.

 We’d argue, however, that increased public demand from citizens in the Global North has helped place sustainability regulation for supply chains on the policy agenda. In recent research that relies on survey embedded experiments in the 12 largest high-income importing countries, we explore cross-national support for supply chain regulations and arrive at three key findings.

 First, we find strong evidence of mass public support for mandatory transparency regulations and stricter enforcement. Notably, we observe that a substantial majority of people in our representative surveys in the 12 countries prefer policies where companies selling imported products are required to submit annual public reports about environmental and labor conditions throughout their supply chains overseas. Furthermore, people strongly support policy designs where, in cases of non-compliance with reporting mandates, governments can impose a financial penalty, end purchases of government supplies from violating companies, and press legal charges against corporate management. Policy measures that incorporate both strict reporting and strong enforcement capacity garner support from over 60% of respondents.

 Second, public demand for stricter sustainability regulation of global supply chains is remarkably consistent across the 12 largest OECD importers. These findings suggest broad support for such policies across diverse socio-economic and political contexts within the Global North. Furthermore, we find that citizens’ preferences appear to be robust against informational manipulation regarding the effectiveness of transparency measures, suggesting that public demand for stricter policy instruments is well-formulated and stable.

 Lastly, preferences towards mandatory reporting and enforcement are largely driven by people on the political middle to left and those exhibiting stronger environmental concern.  Yet, people on the political right still support a majority of the most stringent policy proposals. This suggests that policy design characteristics of disclosure mandates may be a crucial factor driving policy support, as the public does not expect substantial increases in consumer cost increases from such new rules.

Heightened transparency is a key prerequisite for increased sustainability in global supply chains.  Transparency increases incentives for firms to ‘clean up’ their supply chains under pressure of decreased market shares and allows for governments to identify violating firms and adopt targeted measures. While currently, consistent transparency of cross-border consumer products is quite low – our findings provide some optimism. Public demand for increased transparency and enforcement capacity is quite strong, providing a necessary condition towards the development of novel environmental and labor policies to make global supply chains more sustainable.  

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