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The most influential corporate responsibility body in the US says the
tide has turned against the audit-led approach to ethical supply chain
monitoring.
BSR argues that the widespread company practice of monitoring and inspecting suppliers for compliance with ethical codes of practice has had ‘some useful impacts’, but should no longer be the focus of efforts to improve conditions in supplier factories.
Instead this ‘first-generation’ approach should be viewed as having laid the foundations for other methods likely to be more effective. Companies now have to ‘remake strategies, redeploy resources and consider new partnerships in pursuit of a model that has the potential to achieve more lasting change’, the non-profit business body says. As a result, companies will have to work in much closer partnership with workers and governments.
BSR believes the ‘rush to action’ in the early to mid-1990s led many companies to make the number of supplier-factory inspections their yardstick of success, even though this ‘blunt instrument’ revealed problems while offering no cure. In addition, it argues that monitoring has been a response to concerns raised in developed countries where the goods are sold, rather than in the countries where they are produced. It has therefore had limited appeal for suppliers, workers, non-governmental organizations and governments in developing countries.
In a new report, Beyond monitoring: a new vision for sustainable supply chains, BSR says that companies now need to:
align purchasing practices more closely with any social and environmental demands made on suppliers
give
business to suppliers that manage their workforces responsibly in an
effort to stimulate greater ‘ownership’ of the issues on the part of
suppliers
ensure
workers at supplier factories are in a position to assert their rights
and have access to means of resolving disputes and developing their
skills
do
more to encourage governments to create public policy frameworks and to
raise workplace standards, with enforcement not left just to the
private sector.
BSR maintains that the corporate world will have made significant progress if, in five years’ time, multinationals are spending ‘substantially less’ on monitoring, and are working to supply chain principles that apply across their industry sector, rather than running individual company programmes as tends to happen at present.
Its findings echo those of other influential bodies in the field, notably the Ethical Trading Initiative – which has concluded that audit-led ethical supply chain management is dead (EP7, issue 7) – and the World Bank, which has found widespread ‘fatigue’ among companies and suppliers (EP6, issue 11).
The level of corporate resources devoted to monitoring over the past few years has been enormous. At one point, the US retailer Gap was carrying out 8500 inspections a year of its supplier factories.
BSR is to pilot some of its recommended approaches with companies during the next few months as part of a programme called Beyond Monitoring.
BSR argues that the widespread company practice of monitoring and inspecting suppliers for compliance with ethical codes of practice has had ‘some useful impacts’, but should no longer be the focus of efforts to improve conditions in supplier factories.
Instead this ‘first-generation’ approach should be viewed as having laid the foundations for other methods likely to be more effective. Companies now have to ‘remake strategies, redeploy resources and consider new partnerships in pursuit of a model that has the potential to achieve more lasting change’, the non-profit business body says. As a result, companies will have to work in much closer partnership with workers and governments.
BSR believes the ‘rush to action’ in the early to mid-1990s led many companies to make the number of supplier-factory inspections their yardstick of success, even though this ‘blunt instrument’ revealed problems while offering no cure. In addition, it argues that monitoring has been a response to concerns raised in developed countries where the goods are sold, rather than in the countries where they are produced. It has therefore had limited appeal for suppliers, workers, non-governmental organizations and governments in developing countries.
In a new report, Beyond monitoring: a new vision for sustainable supply chains, BSR says that companies now need to:
align purchasing practices more closely with any social and environmental demands made on suppliers give
business to suppliers that manage their workforces responsibly in an
effort to stimulate greater ‘ownership’ of the issues on the part of
suppliersensure
workers at supplier factories are in a position to assert their rights
and have access to means of resolving disputes and developing their
skills do
more to encourage governments to create public policy frameworks and to
raise workplace standards, with enforcement not left just to the
private sector.BSR maintains that the corporate world will have made significant progress if, in five years’ time, multinationals are spending ‘substantially less’ on monitoring, and are working to supply chain principles that apply across their industry sector, rather than running individual company programmes as tends to happen at present.
Its findings echo those of other influential bodies in the field, notably the Ethical Trading Initiative – which has concluded that audit-led ethical supply chain management is dead (EP7, issue 7) – and the World Bank, which has found widespread ‘fatigue’ among companies and suppliers (EP6, issue 11).
The level of corporate resources devoted to monitoring over the past few years has been enormous. At one point, the US retailer Gap was carrying out 8500 inspections a year of its supplier factories.
BSR is to pilot some of its recommended approaches with companies during the next few months as part of a programme called Beyond Monitoring.
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