Whether you have been indifferent, a skeptic or a champion of Corporate Social Responsibility (CSR) initiatives and activities until now, the trend is well and truly set and it is an aspect of your business that will only gain significance in 2015 and beyond. This year, make a resolution to embrace the movement and take your supply chain partners along with you. You might be surprised what they could help you achieve…
CSR has been much talked about in the past decade, and often referred to as a PR exercise or even a pretext for cost cutting measures rather than a genuine statement of good intentions for the planet and its people. But instead of arguing the point, is it not more beneficial to discuss the many ways a company can positively contribute to society and the environment, whichever the main motivation may be?
It would be hard to find an annual report from any of the S&P 500 companies that does not mention CSR as a corporate concern and you will find huge differences in the variety of differing social and environmental contributions. From experience in business process outsourcing, three main factors would seem to set the ‘committed corporations’ apart from the rest:
- Setting or adopting standards as part of the company’s DNA
- Holding your supply chain to similar standards
- Setting specific yearly targets
Rare are the companies in 2015 who manage all aspects of their activities themselves. Indeed, chances are, a number of different supply chain partners handle your products today. So here are some ways they can contribute and become part of your CSR strategy:
- Sustainability: Your supply chain partners can mitigate the impact your activity has on the environment, helping to reduce waste and the use of resources and energy. Whether utilising manufacturing capacity, improving your management of inventory levels, optimising logistics, enhancing the rate of product recovery or repair yields from the field, , they can have a real impact. . By adopting ‘lean’ processes and environmentally friendly policies (such as ISO 14001 standard), your partners, will help promote sustainable practices upstream and benefit financially. In addition, you will ensure they have the quality systems in place to measure, report and perform against your CSR targets.
- Health & safety, employment and support of the community: Through outsourcing, it is now very common for companies to have more people indirectly employed in support roles than employees on their own payroll. This both undervalues the employment contribution the company actually makes and poses a potential threat to its reputation. Some 2014 headlines have highlighted the problem of improper human resources management if not adopted throughout the chain. Again, by requiring your partners (and their own partners) to adhere to an appropriate standard when it comes to employee welfare (such as OHSAS 18001) or other similar standards, (such as Ecovadis, or EICC in the technology sector) you will greatly influence these practices. By incorporating some of these aspects into your suppliers’ scorecards or Key Performance Indicators (KPIs), you can gain visibility to control and drive real improvement in this area.
- Business Ethics: This is probably the most difficult aspect of CSR to measure and therefore influence in your supply chain. However, by giving it careful consideration when selecting your partners in the first place, you can get a fair insight in the way a company conducts its business. A good indication also of a company’s ethical behaviour is their level of transparency that they provide in their Code of Conduct. Also, a partner that is not so open to routine audits or site visits at short notice should probably raise some flags…
So this year – when setting your own CSR targets – do think about how you can involve and leverage the CSR contributions of your business partners. This may not only help you improve on your own performance, but it will also have some positive ripple effects that may potentially reach the four corners of the globe and ultimately satisfy not just your customers but your own employees, investors, governments and other stake-holders alike. So go on, take a fresh approach in 2015 and unlock more of the value potential from your supply chains. What have you go to lose?
Xavier Hubert, Solutions Architect EMEA at Teleplan International
