The international dimension
The intensification of the global competition for fossil fuels, food and many other natural resources provides enormous opportunities for many developing countries to gain greater benefits from trade, investment and integration in global supply chains. At the same time, this race for resources presents a huge stress test for business integrity overseas, making more effective and inclusive collective commitments to responsible investment and supply chain management an urgent task.
Strengthening compliance and integrity in the supply chain: what comes next? Ayesha Barenblat and Tara Rangarajan1 I firmly believe that a company that cheats on overtime and on the age of its labour, that dumps its scraps and chemicals in our rivers, that does not pay its taxes or honour its contracts will ultimately cheat on the quality of its products. And cheating on the quality of products is the same as cheating on customers. Wal-Mart CEO Lee Scott, October 2008
Sustainability in supply chains: from sticks to carrots, partnerships and ownership Fifteen years ago efforts to ensure supply chain integrity focused on labour and environmental issues, and relied mainly on risk mitigation and social audits as tools to assess such risks. This approach turned out not to be enough. Monitoring and the threat of sanctions alone were not effective in safeguarding compliance and integrity across supply chains. Today, leading companies have moved beyond this narrow control-based approach. They are increasingly taking a hard look at how their own purchasing practices may have an impact on factory conditions and the sustainability of supply chains in a broader sense, including compliance with all applicable laws, not least those related to a country’s anti-corruption stance. At the same time, these companies also seek to instil greater ‘ownership’ for improving conditions with the factories themselves. Translating these lessons and new approaches into a strategic framework, Business for Social Responsibility, in partnership with some of its most innovative member companies, has identified four key pillars that must work in concert with one another to make supply chains effective and sustainable: 1 Ayesha Barenblat is a manager in Advisory Services at Business for Social Responsibility (BSR). Tara Rangarajan is the managing director of Advisory Services at BSR.
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