Sustainability is an important part of corporate social responsibility—a group of ideals that includes concern for human rights, labor practices, and anti-corruption. Today’s companies are becoming more aware of social and ethical considerations and are responding with increasingly visible efforts to improve their performance in these areas.
Every company has a corporate social responsibility stance, as well as a set of guidelines that addresses operating practices and the perspectives of management on human rights, labor, corruption, and sustainability. Until recently, these instructions often were built into the corporation’s DNA but poorly documented. They were simply embedded in the operational strategy and the policies that employees were expected to carry out.
What’s different now is that companies are beginning to articulate corporate social responsibility principles clearly and openly, and organizations are being monitored and judged by a number of outside interests, including consumers and consumer groups, governmental bodies, regulatory agencies, and special-interest groups.
Actions speak louder than words, so observers tend to be more interested in what companies actually do rather than stated intentions. Nevertheless, a published corporate social responsibility policy provides a useful reference to direct employee decisions and actions at all levels of the organization. Without this guidance, it’s difficult to know how an employee will respond to ethical challenges. More importantly, employees may not have confidence in their knowledge of how they are expected to perform. They will bring their own ethics into their decision making—principles that might not align with those of management or the board of directors.
Fortunately, most published guidelines reflect the way an honest, ethical professional would run a business. The United Nations Global Compact provides a basic framework for corporate social responsibility, which includes support and protection of human rights; freedom of association and the right to collective bargaining; the elimination of child labor; ending discrimination; environmental responsibility; and working against forms of corruption, including extortion and bribery. These principles should come across as universal to most people.
Significant complications have arisen due to today’s companies being responsible for the actions of their supply chain partners. Nobody knows this better than the people at Apple, which has been criticized for labor practices and working conditions at supplier plants in Asia. Likewise, the recent disasters at clothing factories in developing countries have reflected poorly on some high-profile fashion brands that contract production with those plants.
As a result, procurement is more complicated than ever. No longer is it sufficient merely to find a low-cost producer with acceptable quality and delivery performance. Procurement professionals also must investigate working conditions; labor practices; employee health; sanitation; and, increasingly, environmental performance before committing to a contract manufacturer or supplier. It is a reflection of the fact that manufacturing is global; and, although a company may outsource production, it cannot outsource the responsibilities of being a producer, employer, and steward of the planet. This is the reality of supply chain management.
Reprinted from APICS Magazine: Enterprise Insights. November/December 2013
