CSR Supply chain

Consumers are increasingly discerning when it comes to the ethical aspect of where and how products are made. Shareholders, investors and other stakeholders are also concerned with the ethics of a product’s supply chain. Socially responsible corporations must be seen to insist on fair wages and decent conditions in the supply chain. CSR policies mean that companies can use purchasing power to influence ethical standards lower down the supply chain. Corporate Social Responsibility requires that companies cannot claim to be properly ethical if suppliers do not behave ethically too. CSR policies concerning the supply base might include ensuring safe, hygienic working conditions for staff, ensuring reasonable working hours and preventing forced overtime. Companies further down the supply chain should provide staff a living wage and ensure that child labour is nor used in the supply base. Consumer demand for organic produce in the supply chain, and the growth of the Fair trade movement has begun to affect the supply chain in the market place and is setting standards in certain industries that supply chains in others are beginning to respond to.

CSR obligates businesses to support ethically sound practices in smaller producers in the supply chain. This can be achieved by building a positive CSR relationship with producers and by being reasonable and realistic about supply deadlines. Regular audits of ethical practices within the supply chain and support in raising standards where ethics reports identify points of weakness are crucial if CSR policies are to be credible. Procurement is a powerful incentive for smaller suppliers to conform to CSR standards.

The environmental impact of production further down the supply chain can also be assessed in environmental audits and should comply with accepted CSR standards within the company. As with ethical issues in the supply chain, CSR policies cannot be credible if the supply chain’s environmental impact on climate change, sustainability and waste management is a detrimental one.