Your customers will always hold you responsible if your suppliers behave badly. Follow Smarta's three ideas to make sure your supply chain is as scrupulous about its ethics as your business is.
While the jargon-tastic term 'ethical supply chain management policy' makes us shudder, the idea behind term is very sound: create a list of guidelines for those involved in your supply chain to ensure at every point, suppliers are observing best practice.
If parts of your supply chain are abroad, consult with local trade unions and NGOs to identify areas of concern. Take into account issues such as forced labour, whether the supplier allows trade union activity, workplace health and safety, workers' ages, wages, working hours, known cases of discrimination, and any history of inhuman treatment. Outline how you expect your suppliers to behave and what sort of conditions you expect to see in factories. See the Ethical Trading Initiative's (ETI) base code for inspiration.
For the best results, communicate your policy as much as possible: identify employees such as buyers or managers who will need training - but ensure the policy is available to all your staff so they know exactly how you manage your supply chain.
If you want to go the extra mile, take inspiration from Divine Chocolate and incentivise your suppliers into becoming more socially conscious. The business' suppliers all have a stake in the company - which means they have a vested interest in maintaining its ethical image.
Your suppliers may say their practices are squeaky clean, but if they can't prove it, how can you trust them? Instead, find out if they have any certification: bodies such as the Fairtrade Foundation, the Soil Association, the Forest Stewardship Council, the Marine Stewardship Council and the Product Authentication Inspectorate (PAI) all have the power to determine whether a company's products can be deemed ethical or not.
Take a look at the Ethical Trading Initiative (ETI), Business Social Compliance Initiative (BSCI), Business in the Community (BITC) and Business for Social Responsibility (BSR) websites as well - all four feature lists of members with socially responsible credentials.
Making your supply chain ethical isn't all fair wages and eliminating child labour - how the chain deals with its waste is equally important. Ask your suppliers to cut down on unnecessary packaging - particularly if it's plastic - or look at more sustainable alternatives. The government's Waste and Resources Action Programme (WRAP) has made a voluntary agreement, called the Courtauld Commitment, with a range of British retailers, to cut down on waste. Its website lists targets and timescales supply chains should be aiming for.
Find out from your suppliers how they handle the rest of their waste, as well. Electrical items should be disposed of in accordance with the Waste Electrical and Electronic Equipment (WEEE) directive, which says all electronic equipment should be disposed of at no cost by the manufacturer. Look into your industry's best practice, and make your suppliers are following it, ensuring they do everything they can to cut down on the amount of waste they produce. Remember: if your suppliers aren't following best practice, it will reflect badly on your own business.
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