Why supply chain reporting matters
Recently we were invited to join a panel discussion at the Sustain Conference in Paris. The one-day event was organised by EcoVadis, a global Supply Chain Management business set up in 2008. Their role is to work with buyers to help them create transparent and clear supply chains. They do this by auditing the Corporate Social Responsibility of suppliers and providing them with a scorecard, which highlights areas of good practice and areas for improvements.
We were originally invited to EcoVadis by a client of ours, as part of their supply chain management. We accepted and went through the process of providing evidence, policies and procedures in all CSR functions.
We scored very high (63/100) and received a Gold Standard Rating.
So, for me the most interesting part wasn’t me on stage with my very own microphone - although that was quite fun - It was finding out about the development in CSR and how supply chain management has grown.
Businesses are no longer merely compliant in terms of their own responsibility but intentionally examine their entire supply chain. This creates a challenge for buyers in terms of managing and supporting their complex and diverse suppliers and the cost versus benefit for suppliers to embrace and embed fair practices across all their functions.
Supply chain management is growing fast; take EcoVadis for example, they started 8 years ago with one client and in 2015 alone they welcomed 8,000 new companies.
During the event we heard from GSK who are committed to a corporate wide sustainability programme and have a supply chain of 65,000 and Coca Cola Enterprises who provide support and help to suppliers but will also drop suppliers if they don’t make the progress over time in terms of addressing key principles including Health and Safety, human rights and business integrity.
EcoVadis then provided us with some numbers, which just made things even trickier…So, globally there are about 200 CSR Standards and Audits, 459 eco-labels, 2 new ISO (International Organisational Standards) and a variety of other new standards including the Modern Slavery Act (UK).
I reflected on how hard we have found it to implement policies, practices and activities around CSR and how we still struggle to implement the same practices across all of our 17 offices globally. How would small scale farmers and businesses in developing and emerging markets cope to ensure they are compliant with Health and Safety, fair business practices and anti-corruption issues in a context that may well be very different from their buyers? With less people, infrastructure and time to do what is needed.
On the other hand organisations receive a lot of pressure from their stakeholders to improve their business practices and to ensure they have a clean supply chain. The more forward thinking and responsible businesses are indeed trying to address this but how far should a business go in supporting and helping its supply chain? At what point do they drop a supplier because they need more help than they can provide.
And finally, the increase in numbers of CSR platforms and reporting mechanisms concerns me slightly. We have been members of the UN Global Compact since 2005, which I am now truly grateful of because it has helped us to be more structured in our approach to CSR and without a doubt this has helped us achieve a Gold Standard through EcoVadis. However, we have hundreds of clients and if they all ask us to sign up to their CSR auditing platforms (EcoVadis suggest there are about 200), how can we please all our clients? And when do suppliers say no?