Rob --

Many thanks for thinking about it!

One of the points i've left to the side is that there is some evidence of a "natural carrot" here -- in other words, a return profile that comes from good corporate citizenship. The intuition around this is straightforward: a business is durable in a different way if it consistently meets and exceeds self-imposed standards for the intensity and type of the footprint it invariably leaves.

There is reasonably comprehensive evidence that good behavior on a cross-section of ESG factors is associated with desirable things. This study [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2699610] should place good corporate citizenship firmly on the agenda of any CEO or CFO. It's hard to find things that are durably associated with good financial performance, you know?

I agree that fair trade labeling is super useful on the consumer side, but investors should also be thinking hard about this especially for firms with rich multiples. Take Inditex (ZARA parent company) for example, just because they're large and we've written about them before [https://blogs.cfainstitute.org/investor/2013/03/13/inditex-is-priced-fo…]. With the company trading near 34x earnings, it's difficult to imagine any equity investors are counting on a payback period much shorter than 20 years. The durability of the franchise matters immensely to the firm's return profile, and sourcing is literally step one in the repeatable process that gets investors paid.

I'd be asking about supply chain issues for "natural carrot" reasons as above, but also to avoid a potential discontinuity. Payback is on at least a 20yr horizon, so not baking it into the evaluation is in some ways a bet on static consumer preference.

Cheers, and all the best --

Will