TFE/TFE Licensing, October 2021

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FEATURED CONTENT

The Secret to Achieving Responsible Sourcing and a Larger Supplier Base BY SARAH NG | MANAGER, CORPORATE COMMUNICATIONS, ICTI ETHICAL TOY PROGRAM (IETP) Why is Responsible Sourcing Important? Businesses now face multiple challenges in the global supply chain: labor shortages, shipping crises, and record-high container rates, to name just a few. At the same time, regulatory bodies and consumers expect businesses to ensure their operations and products uphold sustainability and social responsibility standards. When procurement professionals are under tremendous pressure, responsible sourcing strategy becomes more important than ever. Sourcing responsibly provides procurement professionals crucial insights into the social metrics of their global supply chain, helping them to comply with regulations such as the Modern Slavery Act, protecting their reputation, and mitigating supply chain disruption to ensure their products arrive on shelf, on time. Does Responsible Sourcing mean we need to replace our suppliers? What happens to our supplier base? Working with suppliers that meet your responsible sourcing standards will not negatively impact your supplier base. Sourcing responsibly is, indeed, a clear opportunity to achieve greater visibility and diversify your supply chain. IETP is a widely-trusted responsible sourcing standard, with 98% of retailer and manufacturer acceptance. Over 1,000 global suppliers have joined our Factory Certification Program or Social Impact Assessment Program. Our database is made up of suppliers who have been evaluated using our industry-wide accepted standard, organizations can therefore easily be connected with their “best-fit supplier.” IETP streamlines the supplier screening process, providing assurance that products made by the suppliers in our program meet the ethical sourcing requirements of the industry. We created our exclusive Connect Platform to link your global supply chain with our pool of responsible suppliers. The Platform allows you to search for suppliers based on your specific needs, review their social compliance history, stay informed with their real-time updates, as well as receive custom alerts when potential supply chain disruptions occur. When you adopt the ICTI Ethical Toy Program into your ethical sourcing strategy, we connect your global supply chain with our cohort of responsible suppliers. What happens with my current suppliers? We understand you value the trust and long-term relationships you have built with your suppliers and these are important to maintain. To achieve greater visibility, we suggest the following steps: 1. Supply Chain Mapping and Initial Risk Assessment — This is a critical first step to drive transparency, so you know who your suppliers are and where your products come from. Identify the risk levels of each source country via available resources such as the Global Slavery Index or the Child Labor Index. 2. Monitor and manage risks — Based upon the level of risk measured, allocate them adequate monitoring programs. Suppliers from high-risk countries should go

through a full monitoring program. Comprehensive assessments combined with onsite audits or visits such as the Factory Certification Program we operate would help identify unauthorized sub-contracting or other serious gaps preventing your transparency goals. For lower-risk countries, remote assessment such as the Social Impact Assessment Program would help you establish whether a business partner currently has an effective management system in place to maintain good labor practices and ensure safe workplace conditions. What happens to the non-compliant suppliers? How can we bring them up to our standard? Just like you, your suppliers are also facing multiple operational challenges. At IETP, we take proactive actions to assure all non-compliances are rectified. Our on-the-ground teams offer bespoke engagement activities to help the suppliers in our program identify the root cause of non-compliances and helping them find sustainable solutions to prevent further or future non-compliances. Furthermore, suppliers need to understand your expectations. At IETP, we offer tailored capacity building courses as well as regularly speaking at supplier conferences to communicate the expectations of buyers, helping them improve to the standards expected. For example, we believe workplace safety is crucial as it helps to ensure a safe, harmonious, and productive work environment for all. To communicate this with the suppliers in our program, we host complimentary webinars on workplace safety, helping to build suppliers’ understanding and capability to identify and avoid potential electrical, fire, and machinery incidents. The changes needed to build a sustainable supply chain cannot be achieved by audit alone. A sustainable supply chain requires industry-wide knowledge and collaborative efforts; IETP is here to facilitate this. For support to help you advance your ESG (Environment, Social, Governance) objectives, achieve supply chain sustainability, or to find ideas on how to invest for positive social impact, contact join@ethicaltoyprogram.org and find out how we can support your goals.

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