Supply Chain Management
While in Boston for the Ceres Conference, I also attended the Siran (Sustainable Investment Research Analyst Network) Symposium. Most of the participants were analysts who spend much time practicing shareholder advocacy. One of the sessions featured Dan Viederman of Verite, who spoke on how to improve corporate responsibility in the supply chain. Verite is a non-profit organization committed to ensuring safe, fair and legal working conditions worldwide.
Dan mentioned that social investors and non-profit groups have succeeded in raising awareness about supply chain issues, influencing companies to be more open about the realities of their sourcing, and developing pilot projects to address problems. Yet despite some clear signs of progress – particularly in transparency – improvements on the ground are coming slowly.
Dan stated that any company which sources products from Third World countries invariably has human rights violations in its supply chain. The key for companies is to admit this reality and take steps to address it.
He outlined the Fair Made Five:
1) Commitment to Transparency – How forthcoming is the company about its sourcing problems?
2) Investigate Current Practices – Does the company investigate with credible resources? Who does the monitoring?
3) Plan for Positive Impact – Does the company measure its impact? Does it change its program in response to evaluations?
4) Look Inside the Business – Are non-CSR (corporate social responsibility) staff within the company on board? Are indicators for CSR linked with those for business?
5) Improve Prospects for Workers and their Communities – How does the company support workers beyond the code? How does it give workers a voice, and choices? How does it commit to the communities in which it sources?
By asking these questions of companies and using the information effectively, shareholder advocates can begin to address supply chain concerns.
