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Principle 2: Impacts
Who or what will be affected by this decision?
Understanding impacts on people, communities, and the environment is central to fair and responsible supply chain decisions. Impacts should be considered across the whole system, including those that occur indirectly or outside an organisation's immediate sphere of control.
2.1 People and Communities
Consider how a decision may affect jobs, incomes, economic security, health, education, resilience, and access to markets, particularly where people, communities, or businesses have limited alternatives. Consideration should also be given to how impacts are distributed and whether certain groups may be more vulnerable to the consequences of a decision.
2.2 Environmental Impacts
Consider environmental impacts, including emissions, biodiversity, land use, water resources, waste, and other environmental outcomes. Actions intended to improve one environmental issue should not automatically be assumed to deliver an overall environmental benefit.
2.3 Unintended Consequences
Particular attention should be given to unintended consequences and indirect impacts. Consider whether a decision could create new impacts elsewhere in the system, including impacts that fall outside their own operations, reporting boundaries, or emissions inventory. This may include effects on livelihoods, indirect jobs, biodiversity, infrastructure, transport networks, access to essential goods and services, or overall environmental outcomes.
2.4 Distribution of Costs and Benefits
Consider who bears the costs, risks, and burdens associated with a decision and who receives the benefits. New standards, reporting requirements, certifications, sourcing criteria, or other sustainability measures should not create disproportionate burdens for those least able to bear them.
2.5 Fairness and Equity
Particular care should be taken where decisions may disadvantage suppliers, workers or communities in developing countries, especially where resources are more limited and livelihoods are more dependent on trade. Climate-related sourcing decisions should recognise historical responsibility for emissions and avoid placing disproportionate burdens on those who have contributed least to climate change.
Decisions should seek the best overall outcome for people and the environment, while avoiding the transfer of significant negative impacts between places, sustainability issues or stakeholder groups. Where trade-offs cannot be avoided, these should be assessed transparently, with Principle 4 applied to determine whether they are proportionate and whether better alternatives exist.