Traceability

To reduce risk and ensure that the products within a supply chain remain free of deforestation, ecosystem conversion, and human rights abuses, companies need to know how their materials were produced. This requires tracing products back to specific areas, producers, or intermediate suppliers for which performance on these critical topics is known. Achieving adequate traceability is therefore considered an essential component of establishing and managing an ethical supply chain.

What is traceability?

Traceability is defined as the ability to follow a product or its various components through all stages of the supply chain, such as production, processing, manufacturing, and distribution. Traceability allows companies to link specific product volumes to particular attributes of suppliers and production sites. Achieving this often requires companies to identify the various actors within their supply chain and understand the relationships among them, a process known as supply chain mapping.

How much traceability is enough?

Core Principle 5 of the Accountability Framework states that the origins of supply chain materials should be known or controlled to a sufficient extent to ascertain whether production and processing units comply with commitments. Specific requirements apply to different actors. Primary processors and first intermediary traders should know the origin of raw materials down to the level of the individual production unit or smallholder group.

Downstream intermediaries, manufacturers, and retailers should trace supplies upstream until they are able to verify compliance or identify the nature of any non-compliance. Depending on the specific context, this may require traceability to a sourcing area, such as a country, province, or municipality; a direct or indirect supplier, such as a refiner, trader, or farmer group; or an individual farm or production unit.

How can product origins be sufficiently known or controlled?

The Framework identifies four distinct approaches to supply chain mapping and traceability to achieve adequate control. Companies may use different methods in different contexts, depending on what is most practical and effective. Firstly, full traceability—when materials can be traced back to the production or processing units of origin—allows companies to assess compliance directly.

Secondly, a supplier’s control mechanisms can provide sufficient evidence of compliance when materials can be traced back to a supplier that can trace supplies to the units of origin and demonstrate compliance to the buyer based on adequate monitoring and verification, in accordance with Core Principle 11. Thirdly, credible assurance systems, such as many certification schemes, can be used to demonstrate compliance when materials are certified using systems that address all relevant social and environmental requirements with sufficient rigour. These must be aligned with Core Principles 1 and 2 and link product volumes to production units verified to meet these requirements.

Fourthly, traceability to low-risk landscapes or jurisdictions is an adequate level of control where it has been demonstrated that the area’s performance regarding specific social or environmental issues is adequate to fulfil the buyer’s commitments.

Next steps

Companies are encouraged to review additional guidance on traceability, supply chain mapping, and monitoring. This includes Core Principle 5 regarding key expectations for traceability and the Operational Guidance on Supply Chain Management. Section 2 of that document provides specific guidance on options and mechanisms for achieving adequate traceability and mapping supply chains. Additionally, the Operational Guidance on Smallholder Inclusion in Ethical Supply Chains provides specific guidance on approaches to traceability in supply chains involving smallholder producers.

To apply the Framework, companies can assess their traceability systems and implementation against the elements of the Accountability Framework initiative (AFi) using the provided self-assessment tool. Furthermore, they should determine how best to report on progress toward supply chain traceability using existing reporting systems in alignment with the Framework.

Find additional support

Even with clear guidance, there can be numerous decisions and challenges in setting up an ethical supply chain suited to a particular company’s context. Many companies seek the support of service providers whose approach and advice are aligned with the Accountability Framework. While the AFi is not a service provider and does not accept funding from companies, it can discuss next steps with organisations and help identify options for further support based on their specific needs.