Auditing your supply chain is an opportunity to test the CSR commitment of your business; and the underlying ethos of its commercial policies. Not only will it help you better understand your supplier; but you’ll also be building a socially responsible company that’s attractive to customers, investors and employees.
Where to begin: Deciding on what impacts to examine is largely dependent on the type of product or service you provide and the length of your supply chain. Before you begin, consider the chain’s complexity and use this to assess the time and scope of a potential CSR impact evaluation. For example, will you assess your suppliers only – or review both them and their suppliers too?
And remember that the criteria you use to assess your suppliers must be reflected in your own organisation’s measures and performance.
What to examine:
• Inspect the waste stream and recycling policies of your raw material providers. Look for evidence of waste carrier licences and transfer notes – and any prosecutions or fines imposed.
• Request health and safety polices and check that they meet contemporary requirements and changing legislation. Investigate the number of accidents and their severity, and any civil and criminal legal proceedings at your suppliers’ sites.
• Question suppliers on their compliance with employment regulations. Evaluate the working conditions of local people employed by overseas suppliers; it may be appropriate to benchmark against standards such as Fairtrade (www. fairtrade.org.uk).
• Ensure British suppliers are paying their employees the Minimum Wage; or the Living Wage, and abiding by the Working Time Directive. There have been many recent reports regarding the mistreatment of workers, with pay and conditions below legal limits.
Remember:
• Begin by analysing your own organisation.
• Decide assessment criteria and tiers at the outset.
• Allocate sufficient time and resources to achieve a meaningful evaluation.
• Undertake your own research where possible.
• Seek collaborating evidence from more than one source.
• Standardise your approach – reviewing factors in a methodical and consistent manner.
• Don’t be afraid to ask awkward or follow-up questions to confirm your findings.
Request details of energy reduction measures, any savings made, and suppliers’ total CO2 emissions. SMEs may use a green energy supplier; such as Good Energy (http://www.goodenergy.co.uk/), that provides a fuel mix encompassing wind, solar, hydro and biofuel. Research, assess and report: You’ll find that much of the assessment of a complex supply chain report is a desktop exercise; as information is supplied following a formal request for details. However, wherever possible, Duty of Care Audit visits should be made to view and assess sites in person. Ideally both methods should make use of a standardised checklist to ensure consistent reporting. And use technology to drive your research – an Internet search can yield useful background information.
What’s in it for you?
At the end of the process you may not have changed the world; but you will benefit from a thorough understanding of your supply chain and have built better relationships. You’ll also have set socially responsible criteria; not just based on cost; by which your products and services, and ultimately your brand, are judged. Of course, it’s not just about supporting communities and the environment. A proactive approach to corporate social responsibility makes good business sense too; assisting in the recruitment and retention of employees, attracting customers and investors and helping to strengthen your brand. By auditing your supply chain, you’ll ensure that your connections reinforce your reputation.