Sustainable HR 2: Ethically and Socially Responsible Supply Chain Management
"Given the different pressures and conditions many vendors face, the best practice with regards to this now – especially when unacceptable or problematic conditions have been discovered – is not to abruptly cancel the relationship if, after evaluation, it becomes clear that there are issues."
This post is a continuation from yesterday's post examining shifts in sustainable procurement practice.
First, a company that has committed publicly to sustainability and Corporate Responsibility needs to align not only their, but also those they collaborate and are in business with, values with practice.
One of the most basic starting points in this area is ensuring they are not profiting basic human rights abuses. For example, no use of sweat shops, child labour or modern slavery in their own company or by those they buy from.
Photo: “Tailors at work in Hearne’s at 63–64 The Quay, Waterford” from The National Library of Ireland, July 25, 1907
If this is found to be the case, and there is a demonstrated willingness and ability to change, then many companies are increasingly deciding to initially retain the relationship.
This may sound controversial at first. Previously, as soon as any shortcomings, especially large potential PR disaster ones related to human rights, were discovered many companies tried to hide it or broke the relationship as quickly as possible. Many still do this of course.
However, increasingly a number of large corporations are trying not to do this. Why?
Part of the reason for sticking with problematic vendors and trying to improve working conditions is to try to make amends for the ways in which they have already profited from Human Rights infractions. In this case, a company takes responsibility for trying to ensure that the conditions actually improve for the workers who have already (and could be) affected.
There is also the idea of expediency (described in the above section) which aims for continuity and a “better the Devil you know” approach.
The most common reason though is one of the underlying assumptions CSR: that you try to positively impact the communities you work within.
If one vendor is “problematic”, for whatever reason, many global corporations found that their local competitors were often using similar practices.
This means that if a company truly wants to step away from and avoid the issue it has uncovered, it often needs to not only break its relationship with that specific vendor but also the region it is based in.
For this reason, helping to create change can not only make business and financial sense, it becomes more sustainable and socially responsible in the long run.
This is why some large companies (there is a significant group of smaller ones also do this just on a less massive scale) give support, guidance and working closely with suppliers to develop improved systems and ways of doing things.
One common reason these “issues” exist is because of inequality and poverty. Another is the very specific local context in which they occur.
There is poverty and inequality almost everywhere but it manifests and continues because of very specific local cycles.
Thus, solutions have to be addressed and solved locally but often need extensive support in order to truly understand and transform these issues.
This approach starts from the understanding that both victims and exploiters are often deeply rooted in cycles of exploitation and abusemgoing back for generations.
It is also rooted in the knowledge that many other suppliers and vendors will face similar problems and so helping to solve pre-existing supplier’s issues is often the most expedient and responsible way to carry on a sustainable trade.
Deadlines for adherence, detailed requirements for documentation/proof and regular, in-depth on-site visits are ways many corporations are implementing changes.
For many, this begins with re-evaluations in the light of these new, clearly defined policies and requirements for the supply chain. What and where are the known strengths and weaknesses?
This may also mean undergoing a comprehensive questioning, tracing and re-evaluation of who you work with and who/where you source your products, services and other resources from (one approach to this is described in the last section of this article).
It also means recognizing that responsible and sustainable procurement, vendors and supply chain management is an on-going process of getting to know, evaluating and revising relationships.
As people and companies are usually under-going constant change, exploring these considerations once – at the beginning of a relationship – is not enough to truly say you truly know and understand who you work with and who they work with and who they work with (ad infinitum).
Developing a more sustainable and ethical approach with vendors in the supply chain can be summarised into 5 steps.
1. First, survey key suppliers to assess how they meet environmental and social criteria the business has formally prioritised (e.g. in policies).
2. Next, suppliers are informed of new policies and requirements that they do not currently meet.
3. In order to maintain relationships, discussions about required change are usually “sandwiched” and hedged in with a discussion of support, resources that can be drawn to aid meeting new compliance standards and collaborative expectation-setting.
4. Next, problematic vendors are usually given a timeline for re-assessment and attainment of those goals (along with resources and help to continue to meet them).
5. Finally, progress and achievements are assessed against the timeline and expectations. A decision is made as to whether the relationship will continue and plans are made for further development and monitoring.
Vendor Improvement
This on-going support for vendors that many sustainable businesses are now extending to their supply chain is also often done for CSR reasons as well as more pragmatic ones. The two most common reasons for doing this are: human rights and expediency.First, a company that has committed publicly to sustainability and Corporate Responsibility needs to align not only their, but also those they collaborate and are in business with, values with practice.
One of the most basic starting points in this area is ensuring they are not profiting basic human rights abuses. For example, no use of sweat shops, child labour or modern slavery in their own company or by those they buy from.
If this is found to be the case, and there is a demonstrated willingness and ability to change, then many companies are increasingly deciding to initially retain the relationship.
This may sound controversial at first. Previously, as soon as any shortcomings, especially large potential PR disaster ones related to human rights, were discovered many companies tried to hide it or broke the relationship as quickly as possible. Many still do this of course.
However, increasingly a number of large corporations are trying not to do this. Why?
Part of the reason for sticking with problematic vendors and trying to improve working conditions is to try to make amends for the ways in which they have already profited from Human Rights infractions. In this case, a company takes responsibility for trying to ensure that the conditions actually improve for the workers who have already (and could be) affected.
There is also the idea of expediency (described in the above section) which aims for continuity and a “better the Devil you know” approach.
The most common reason though is one of the underlying assumptions CSR: that you try to positively impact the communities you work within.
Positive Impact
In many places where vendors are located together and that many global supply chains depend upon (e.g. fashion production in Vietnam or Cambodia), working conditions are often similar.If one vendor is “problematic”, for whatever reason, many global corporations found that their local competitors were often using similar practices.
This means that if a company truly wants to step away from and avoid the issue it has uncovered, it often needs to not only break its relationship with that specific vendor but also the region it is based in.
For this reason, helping to create change can not only make business and financial sense, it becomes more sustainable and socially responsible in the long run.
This is why some large companies (there is a significant group of smaller ones also do this just on a less massive scale) give support, guidance and working closely with suppliers to develop improved systems and ways of doing things.
One common reason these “issues” exist is because of inequality and poverty. Another is the very specific local context in which they occur.
There is poverty and inequality almost everywhere but it manifests and continues because of very specific local cycles.
Thus, solutions have to be addressed and solved locally but often need extensive support in order to truly understand and transform these issues.
This approach starts from the understanding that both victims and exploiters are often deeply rooted in cycles of exploitation and abusemgoing back for generations.
It is also rooted in the knowledge that many other suppliers and vendors will face similar problems and so helping to solve pre-existing supplier’s issues is often the most expedient and responsible way to carry on a sustainable trade.
Relationship Management
When considering implementing a sustainable CSR approach into procurement, most understand that very clear policies and expectations must be set and communicated to all current and prospective suppliers.Deadlines for adherence, detailed requirements for documentation/proof and regular, in-depth on-site visits are ways many corporations are implementing changes.
For many, this begins with re-evaluations in the light of these new, clearly defined policies and requirements for the supply chain. What and where are the known strengths and weaknesses?
This may also mean undergoing a comprehensive questioning, tracing and re-evaluation of who you work with and who/where you source your products, services and other resources from (one approach to this is described in the last section of this article).
It also means recognizing that responsible and sustainable procurement, vendors and supply chain management is an on-going process of getting to know, evaluating and revising relationships.
As people and companies are usually under-going constant change, exploring these considerations once – at the beginning of a relationship – is not enough to truly say you truly know and understand who you work with and who they work with and who they work with (ad infinitum).
Developing a more sustainable and ethical approach with vendors in the supply chain can be summarised into 5 steps.
1. First, survey key suppliers to assess how they meet environmental and social criteria the business has formally prioritised (e.g. in policies).
2. Next, suppliers are informed of new policies and requirements that they do not currently meet.
3. In order to maintain relationships, discussions about required change are usually “sandwiched” and hedged in with a discussion of support, resources that can be drawn to aid meeting new compliance standards and collaborative expectation-setting.
4. Next, problematic vendors are usually given a timeline for re-assessment and attainment of those goals (along with resources and help to continue to meet them).
5. Finally, progress and achievements are assessed against the timeline and expectations. A decision is made as to whether the relationship will continue and plans are made for further development and monitoring.
