Ethical Supply Chain Program: Diversify to Thrive

by Todd Merton, Head of Business Development, Ethical Supply Chain Program

Heightened geopolitical tension, shipping volatility, and tighter ESG regulation are pushing brands to rethink their sourcing strategies. While it is impossible to predict the future, companies must be strategic. Horizon scanning and reflecting on the root cause of recent disruptive episodes help companies reduce risk.

Companies that were able to convert the disruptions of COVID-19 into a catalyst for diversifying their supply chains geographically were more resilient to the disruptions faced by many with the onset of U.S. tariffs. These companies have also used disruptors to strategically service individual consumer markets and identify nearshoring opportunities. Diversifying production locations helps businesses reduce risks, capitalize on different countries’ unique capabilities, produce shorter lead times, enhance manufacturing flexibility, and improve logistics with faster delivery and savings on shipping costs.  

The nature of disruption requires quick action — and supply chain disruptions are no exception. When onboarding substitute suppliers, companies expose themselves to great risk by cutting corners in the due diligence process. Working with the right partners can alleviate this.

With more than 20 years of experience in responsible sourcing for toys, the Ethical Supply Chain Program (ESCP) is now deployed across many sectors with certified and assessed facilities in more than 50 countries. So far, this year’s data shows an increase in the number of suppliers joining the program in developing manufacturing regions, with a 10% increase in Vietnam and 28% in Indonesia. 

Through partnerships with The Toy Association and other organizations worldwide, the ESCP has extended the program’s benefits to many more companies. This includes access to the Connect Platform, the ESCP Worker Helpline, which features an effective grievance mechanism, and the expert support required to ensure a new supplier’s compliance with global regulatory requirements and industry standards.

Many businesses are guilty of gathering data without the ability to analyze it or understand the follow-up action. The Connect Platform houses supply chain data and identifies the root causes of issues to support long-term capability building. Companies can onboard new suppliers quickly and confidently, as an ESCP Certified supplier has no outstanding social or EHS non-compliances. 

ESCP’s Connect Platform also houses Marketplace, a function that enables buyers and suppliers to exchange sourcing requirements and capabilities efficiently. Buyers can share their order requirements directly with all the certified facilities in the ESCP community, streamlining the qualification and onboarding process. Consider it your “little black book” of ethical, quality suppliers that are ready for business.

To learn more about how the ESCP can support your business, contact membership@ethicalsupplychain.org to book a call with our team.

A version of this feature first appeared in the 2025 LA Fall Toy Preview Issue of The Toy Book. Read the full issue here!

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