Market for Ethical Supply Chain Tools May Reach $2.7 Billion by 2024

The Monitor Institute by Deloitte recently released a first-of-its-kind report evaluating the current state and future horizon for tools to enable ethical supply chains.

“Responsible Supply Chain Tools: Understanding the Market Opportunity” estimates that the market size could optimistically grow to between $889 million and $2.7 billion over the next five years as companies explore, implement, and scale a range of solutions, and as developers continue creating new tools.

Spokesmen maintain that today's global supply chains are incredibly complex and opaque, but many companies are investing in new tools and solutions that enable them to better oversee their supply chain practices and protect vulnerable workers. These tools are helping companies assess risk, diagnose problems, engage workers, and monitor labor practices – effectively reducing that opacity.

“As companies continue taking this issue increasingly seriously, the market for these tools will keep growing,” said Lisa Newman-Wise, Manager at the Monitor Institute by Deloitte, Deloitte LLP. “Companies told us that they know social compliance audits aren't ‘impactful' enough, and that these new tools can help them actually make a difference in the day-to-day lives of vulnerable workers.”

In an interview with SCMR, Newman-Wise added that researchers were a little surprised by the alignment of industry niches.

“To reduce supply chain complexity and associated risks, several study participants described efforts to simplify their supply chains,” she sayd. “Many supplier companies are large, multinational corporations themselves. By engaging at the corporate level, buyer companies can build direct relationships with the supplier owners to ask meaningful questions.”
Companies and experts that participated in the report think the demand for these tools is likely to increase as companies continue to work towards building more transparent supply chains, protecting workers, working with fewer and better suppliers, and embracing opportunities to collaborate.

“It's exciting to see the potential for growth in this market, but it's even more exciting to think about the positive impact that this growth could have on the lives of vulnerable workers,” said Ed Marcum, Managing Director at Working Capital. “Labor conditions deep in supply chains have historically been difficult for companies to assess, let alone improve. We must continue to ignite innovation in this field to enable companies to make those improvements.”

The report was produced by the Monitor Institute by Deloitte, a team that works with social impact-focused organizations and their leaders to identify necessary actions to help advance progress on pressing societal changes. It was commissioned by Working Capital, an early stage venture fund that invests in scalable innovations to meet the demand for more transparent and ethical supply chains.

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