BRUSSELS, — The business case for sustainable supply chains recently got a boost from the Federation des Experts Comptables Europeens (FEE), the representative organization of the European accountancy profession. The group's latest publication, "Assurance for a Sustainable Supply Chain," offers background and guidance on managing sustainable and ethical supply chains, with an emphasis on independent assurance.
Increasingly, customers and external commentators expect a company's values to be present in the products it sells. Brands have suffered major reputational damage when their suppliers were found to engage in unacceptable practices. Brand and bottom line benefits must be safeguarded, says the report, by implementing a code of conduct for suppliers.
"Previously, buyers were influenced in their choice of supplier only by the latter's ability to supply products of the right quality, at a fair price and with reliable and timely delivery. However in managing risk and opportunity today, it has become necessary for companies to consider the risks to brand reputation associated with the use of a supplier that does not reflect the company's values. Such risks can impact on the bottom line," warned chairman of the FEE Sustainability Assurance Group, Lars-Olle Larsson.
Lars-Olle Larsson added that: "a company can impose its sustainability policies on its supply chain by using a supplier code of conduct. To be useful codes must have sufficient detail to allow clear interpretation, and companies must be able to measure the extent to which suppliers are complying. Active monitoring of take-up and compliance is important if a company is to derive the maximum benefit from its supplier code of conduct.
Independent assurance is a powerful tool for use in the monitoring of suppliers and it adds credibility to a company's own reporting. Independent assurance commissioned by the company provides the greatest degree of stakeholder confidence in the implementation and operation of its supplier code of conduct."
Complete text of the report is available for download
online.
