The headlines about Mattel, Asda, Tesco, Primark and Gap prove just how important it is for organisations to devise, implement and monitor a corporate social responsibility (CSR) policy.
Accepting that something needs to be done is one thing, but deciding what it is and what is going to be sustainable is another entirely. The barriers to addressing these challenges include the cost in finances and physical resources, the complexity of the task, and the continuously evolving agenda. It was only comparatively recently, for example, that carbon emissions appeared on the CSR agenda. There was also the difficulty of applying the traditional four-box model for risk assessment.
Where do I start?
There are practical ways to begin. The first is collaboration. Getting companies from a particular sector around the table to discuss its peculiar issues and working with them to develop supply chain management solutions has been particularly successful.
From here, it is possible to begin to map and systematise the process, bringing consistency and a common approach that can be used across a whole sector. Whereas a particular approach needs to be sector-specific, the principles are easily adapted to sectors as diverse as construction, transport, oil and gas, mining, utilities and the public sector.
An example of this can be seen in the information and communication technology sector, where the leading global brands have united to develop tools to improve corporate responsibility practices. The latest collaborative effort by the members of GeSI (Global e-Sustainability Initiative) and the EICC (Electronics Industry Code of Conduct) is to develop and deploy a tool and process to measure, monitor and improve supply chain CSR performance across this sector.
It isn’t, however, about creating a process you can simply switch on and leave to run by itself. Effective, sustainable supply chain management only happens when companies take a long-term view and work with suppliers in order to identify and establish standards and encourage continuous improvement.
How do I measure results?
For many, the answer lies in auditing or monitoring. To get the best from this approach, companies should make sure they use properly trained auditors who have an understanding of, and a grounding in, social and ethical auditing. It is not enough to rely on quality auditors: we have found that even among the most experienced of audit organisations this can lead to a “tick box” approach. You may need to consider special training requirements to ensure that the results you obtain are accurate, in-depth and provide the right basis for growth and improvement.
After the well-publicised fall from grace of Nike a few years ago, the company embarked on an intensive series of factory audits looking at working conditions in more than 800 of its suppliers in over 50 countries. Subsequently, Professor Richard Locke from MIT undertook his own investigation to ask whether monitoring improved labour standards.
His conclusions were, perhaps, surprising. In spite of significant effort and investment by Nike to improve working conditions among its suppliers, the evidence suggested that monitoring alone produced only limited results.
Instead, it was only when monitoring was combined with other interventions – in this case, focused on tackling the root causes of poor working conditions by improving suppliers’ ability to schedule their work and improve quality and efficiency – that working conditions appeared to improve significantly.
What can I learn from that?
The lesson for us here is that we need to consider new, more systemic approaches to auditing and take a more holistic view than previously. We need to be willing to consider long-term partnerships and work with suppliers to achieve results that are going to be worthwhile for both sides.
There is an increasing willingness among organisations to work together to find ways of managing suppliers across a sector, and this is evident even in the most competitive fields. At the same time, we’re seeing an acceptance that supplier information must be validated by experienced third parties if it is to have any credence.
Lastly, there is a much greater understanding that supplier information needs to cover a broad range of issues that includes capability, financial performance, ethical behaviour, social responsibility and health and safety.
Colin Maund (colin.j.maund@achilles.com) is chief executive of Achilles Group, a supplier management services provider based in Abingdon, UK
