4 steps to drive value from an ethical sourcing policy
- BSR, a global non-profit sustainability consultancy, has established a four rung ladder of benchmark standards by which companies can measure their degree of sourcing transparency, which BSR recently released in a working paper.
- The first rung establishes building awareness to support sustainability; the second involves assuring supplier compliance with company sustainability standards; the third, managing priorities, suggests identifying opportunities for impact within the supply chain; and the fourth and final rung, driving impact, guides companies toward innovation.
- Although a 2016 BSR/GlobeScan State of Sustainable Business Survey found that 84% reported having a supplier code of conduct, and 61% reported sustainable sourcing as part of business strategy, there still remains little agreement on the best methods of ensuring compliance.
The challenging reality of sustainability compliance is that it is an elusive target that constantly shifts with the global landscape.
Many retailers work hard to research their suppliers' sources, going so far as to hire consultants and NGOs to investigate international manufacturing plants. However, even with established practices such as scheduled visits and interpreters, a majority of Tier 1 suppliers mislead investigators through language barriers, musical cues to alert illegal workers to vanish and even the intentional displacement of machinery that crowds the working environment.
One example of the challenge in the transparency effort is the massive new product purity plan currently being undertaken at Target. Because of its size and the value of doing business there, suppliers will likely exert pressure on their subcontractors to comply with the company's new demands, but the cost of investigating and confirming standards will not be minimal.
Rather than focus on climbing all four rungs of the ladder as laid out by BSR, retailers should delve further in to exploring and then implementing truly effective sourcing investigations. The operative word — "investigation" — is key, because as evidence has shown in the various tiers of sourcing and subcontracting, the violations do not want to be found.
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