This article was originally published in BSR Insight and is reprinted with permission.
The number of standards also has multiplied, reflecting a broader set of topics and participants. In the early 2000s, priorities were wages, working hours, and health and safety. Today, issues also include environmental performance and anti-corruption. Product certifications and labels have also exploded. An entire index exists just to catalogue the number of new eco-labels launched every year.
But what progress have we made toward improving the lives of workers in supply chains and protecting the ecosystems that support industry and commerce as well as human survival on this planet?
Although supply chain sustainability management practices have evolved significantly, we have an opportunity to re-examine traditional approaches and achieve measurable, dramatic improvements. Here, I suggest four lessons we can take from supply chain sustainability efforts to date, and four ideas we can apply to achieve greater impact going forward.
The Road We’ve Traveled
It’s hard to capture all of the lessons learned during two decades of work on supply chain sustainability challenges, but four stand out as most important.
1. We must go well beyond monitoring. Social compliance monitoring was initiated to hold multinational companies accountable for maintaining good labor practices at supplier facilities. While this did illuminate working conditions and violations, it also spurred unintended consequences, including duplicative and burdensome audits, bribery and phony records, and a pass/fail mentality that drove problems underground. A retailer once told me that his company fired all the in-house social compliance staff in order to root out rampant bribe-taking, which suppliers had come to expect as a condition of doing business with that company. Third-party audit firms also faced challenges to combat bribery in their relationships with suppliers and brands and retailers.
Perhaps the biggest problem was that the monitoring approach failed to motivate suppliers to own the sustainability agenda. Among other problems, monitoring didn’t revamp management systems to sustain compliance and encourage improvement over time.
The increasingly prescribed remedy to this is a “beyond monitoring” approach that includes management-systems assessments and supplier-development programs that address root causes, provide training, set milestones and incentives, and otherwise encourage suppliers to improve their management practices and performance.
Next page: Toward a comprehensive approach