In the modern global economy, almost every company has a supply chain that reaches around the world. On Labor Day, a day when most Americans enjoy a day off to honor working men and women, we should acknowledge, too, the millions of invisible hands that are the backbone of these global supply chains. These are the people (too often children) who stitch the shirts on our backs, harvest the coffee beans that end up in our cups, and assemble the smart phones in our pockets, often toiling in conditions we can scarcely imagine. They are the foundation of the global economy and essential to its future.
Supply chain management is a major focus of The 21st Century Corporation: The Ceres Roadmap for Sustainability, a practical framework for developing a sustainable business strategy. Building resilient supply chains is essential in an era when increasing extreme weather events around the world are frequently disrupting commerce, and human rights concerns can damage even the glossiest reputation. Recent flooding in Thailand that shuttered auto parts factories for months and a rash of suicides among unhappy workers at the Foxconn electronics assembly company in China are just two examples of supply chain disruptions causing negative ripples for leading global companies.
With the regulatory, reputational, legal and operational risks associated with sustainability issues rising, companies must understand how every one of their suppliers is performing on key environmental, social and governance (ESG) metrics. In short, companies are expected to “own” and disclose the performance of their suppliers whether it relates to the human rights of their workforces or greenhouse gas emissions from their operations.
To catalyze better supply chain practices, Ceres is today releasing a new tool for companies, the Supplier Self-Assessment Questionnaire (SAQ): Building the Foundation for Sustainable Supply Chains.
For many companies, the biggest sustainability risks they face are embedded in the supply chain. While some companies and industry sectors have developed fairly sophisticated methods for assessing and improving the sustainability performance of their suppliers, Ceres’s year-long survey of best practices in this arena revealed that most focus on either environmental or social impacts. Effective supply chain management requires attention to both, including issues such as climate change, water scarcity, human rights, governance and stakeholder engagement.
Next page: How your company can rise above competitors