Behind the scenes: The hidden threats that could harm your brand

The illusion of control: Four preconceived notions and their devastating impacts

To identify the threats to your brand, it is crucial to start by deconstructing preconceived notions that can distort your perception of risk. Among them, four frequently arise, each representing a major risk to your brand.

❝ A scandal could tarnish our image, but its impact will be short-lived.❞

‍While scandals are handled differently today than a decade ago, they remain ticking time bombs, capable of causing immense damage. Brand reputation damaged, stock market valuation plummeting, consumer boycotts… These are just a few consequences that highlight a commonly underestimated reality: ignoring the risk of scandal endangers your company's resilience and competitiveness.

Remember, 2020. At the height of its growth, a British fast fashion giant found itself at the center of a major scandal. An investigation by The Sunday Times exposed appalling working conditions among its UK suppliers: wages half the legal minimum and ignored safety standards.

The reaction was swift. Within days, the brand's market valuation dropped by 40%, losing over a billion pounds sterling. Several retailers cut ties with the brand to avoid association with the scandal. Outraged consumers called for a boycott.

In 2022, history repeated itself. Another undercover investigation by The Times once again placed the British brand in the spotlight, this time accused again of worker mistreatment in its supply chain.

And this is not an isolated case. Year after year, similar scandals emerge, exposing recurring flaws in supply chains. So why aren’t these crises anticipated? Let’s debunk a second misconception.

❝ Our partners are reliable: they are regularly audited to prevent scandals.❞

Audits are essential control tools, yet they remain insufficient in preventing scandals. The main issue lies in their execution. Instead of being conducted unexpectedly or undercover, they are often announced in advance, giving suppliers time to temporarily adjust their practices. The result? Biased evaluations, limited transparency, and an underestimation of actual risks within the supply chain.

Still not convinced? History has shown the limitations of social audits.

In November 2021, Public Eye revealed alarming working conditions at a Chinese fast fashion giant: meager wages, workweeks exceeding 70 hours, no social protections. Two years later, another investigation reached the same conclusions, despite audits conducted by well-known organizations and heavily promoted by the brand.

The consequence? The brand's U.S. IPO faced significant hurdles. Concerns about its supply chain pushed the company to consider London instead… where similar hesitations emerged. Doubt persists, and the IPO remains on hold.

If audits alone are not enough to ensure responsible practices, then prioritizing shorter, well-controlled supply chains seems like the best answer. Producing locally with certified suppliers appears to be the ideal solution.

Yet, once again, we face another misconception.

❝ Our local production guarantees an ethical supply chain.❞

Certified suppliers, contract manufacturing, nearshore supply chains… These strategies are intended to reduce risks in your supply chain. However, they remain imperfect: none of them guarantee full control over supplier practices.

Even worse, they can create a false sense of security, making it seem as though everything is under control while gaps still exist. An underestimated danger that can be costly.

While supply chain scandals are often associated with fast fashion, 2024 has proven that even luxury is not immune to this illusion of control; last year, two major fashion houses paid the price.

Behind an apparent mastery of their production, these brands outsourced certain goods to local workshops, which in turn subcontracted parts of the work to undeclared workshops in the Milan region. The result? Underpaid workers, forced to work beyond legal limits, in precarious safety conditions.

Although the integrity of the parent brands was never called into question, the Italian subsidiaries of these luxury houses were placed under judicial administration, proving that in the textile industry, a local supply chain does not guarantee total control over suppliers.

Could experienced teams have prevented these failures? Are these scandals ultimately the responsibility of the departments in charge? It is time to deconstruct one final misconception.

❝ Our Procurement and CSR teams are experienced and fully understand these issues.❞

Having strong CSR and Procurement departments is undoubtedly an asset, but it does not guarantee full control over compliance and traceability issues. Regulations evolve, supply chains become more complex, and risks often remain invisible until it is too late. Even the most seasoned teams face major challenges: lack of supplier transparency, limitations of traditional audits, and the growing number of legal obligations.

The evidence is clear: in 2020, the Supply Chain Director of a well-known Swedish brand responded to allegations concerning his company. Their products could potentially contain cotton sourced from Xinjiang, a Chinese region that accounts for 20% of global cotton production and became infamous in 2020.

Despite commitments to traceability and strict procurement policies, he admitted before a British parliamentary committee that the complexity of the supply chain made full traceability of their products impossible. The blending of fibers from different regions complicates the precise identification of cotton origins.

This case highlights an uncomfortable reality: even the most structured brands, with well-trained Procurement and CSR teams, can be blinded by the lack of transparency from their suppliers. The risk of exposure to non-compliant practices remains very real.

So, how can you protect your brand from these threats? If audits, certifications, local production, and even dedicated teams are not enough, what solutions can truly safeguard your company from scandal?

Uncompromising control: Three solutions to protect your brand

In an environment where transparency is no longer optional, any unanticipated weakness can turn into a crisis with major financial, regulatory, and reputational consequences. However, it is possible to shift the dynamic: companies that take a proactive approach to traceability can even turn risk into a competitive advantage.

Far from being a mere constraint, control should become a strategic lever—but it must be structured intelligently.

1. Strengthen your control systems

‍Relying solely on periodic audits or supplier declarations means risking overlooking non-compliant practices. An announced audit rarely ensures long-term compliance: the rising number of scandals tied to inadequate certifications or biased audits proves this.

To secure your brand, control should no longer be a static snapshot but a continuous and automated process. True reliability comes from a systematic analysis of supplier data, supported by intelligent alert mechanisms that integrate both regulatory requirements and your own compliance criteria.

By leveraging systems that go beyond mere document collection, you don’t just mitigate risks—you gain a competitive edge, strengthening your credibility with investors, distributors, and consumers by proving that your commitments are backed by concrete facts.

2. Master your supply chain

Having perfect visibility over your direct suppliers is one thing. But what do you really know about your suppliers’ suppliers?

Too many companies focus solely on their tier-1 suppliers without mapping the deeper levels of their supply chain. However, these deeper levels often conceal the real risks: forced labor, circumvention of social and environmental standards, or opaque sourcing of raw materials.

Managing suppliers without a clear understanding of the entire supply chain is akin to making strategic decisions based on incomplete data. Today, regulatory requirements demand far greater traceability, and brands that fail to anticipate these obligations risk being excluded from key markets. The future belongs to companies capable of mapping their entire production ecosystem, not just to avoid crises but to create long-term commercial advantages.

A transparent supply chain is not just a safeguard against sanctions and reputational damage—it is also a powerful differentiator. By proving, with reliable data, that you control every step of your production, you enhance your credibility and gain a crucial trust advantage that competitors will struggle to match.

3. Empower your teams for complete traceability

Compliance and traceability challenges can no longer be managed in silos, nor can they rest solely on Procurement or CSR teams without the right tools and resources. Given the increasing complexity of compliance requirements, it is essential to equip your teams with the necessary means to ensure effective and proactive management.

Regulations are constantly evolving, obligations vary by market, and risk assessment methods continue to improve. In this context, having a clear and structured vision of traceability within your organization is crucial to staying ahead. Don’t just react to new requirements—structure your processes, equip your employees with the right tools, and embed traceability into a sustainable compliance strategy.

Let your competitors view new regulations as a constraint. Invest in upskilling your teams and turn these challenges into opportunities: make traceability a resilience factor, a business accelerator, and the key element of your sustainable development strategy.

Conclusion: From illusion to resolution

For too long, supply chain risk management has been based on an illusion of control. Periodic audits, certifications, and local production—while essential—are no longer enough to guarantee real risk management. The frequent scandals that arise prove this: what exposes your brand is not a lack of control but an outdated and incomplete approach to control.

Recognizing this reality is the first step. Implementing tailored solutions is the second. Traceability can no longer be just a compliance exercise—it must become a continuous, automated, and strategic process, capable of identifying risks in real time and reinforcing your company’s credibility with stakeholders.

Don’t just minimize crises—turn traceability into a true lever for resilience and differentiation.

‍