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August 18, 2016

Human Rights Most Important Issue in Corporate Supply Chains
    by Robert Kropp

Ethical Corporation reports on the results of its survey of corporations and other stakeholders, addressing risk and opportunity in corporate supply chains.

SocialFunds.com -- In the runup to its supply chain summit, to be held in London in October, Ethical Corporation has produced a report summarizing its survey of corporate professionals and others on anticipated risks and opportunities in corporate supply chains.

Entitled The State of Sustainable Supply Chains 2016, the report summarizes 533 responses to an online survey conducted by Ethical Corp in June. A relatively small percentage of respondents were from outside the corporate world; however, the analysis undertaken in the report focuses on responses from corporate employees, nearly half of whom were identified as director-level or above.

Not surprisingly, many of the corporate respondents identified themselves as either supply chain professionals of from Corporate Social Responsibility (CSR) (or sustainability) departments. What serves to distinguish Ethical Corp’s report from many like it is the frequent comparison of responses from the two groups. “We do this to identify gaps and trends between these two different business units,” the report states. “Does the supply chain department see sustainable issues as being critical? Are the sustainability and supply chain departments incentives aligned? What do both departments see as being the biggest sustainable supply chain opportunities in the coming 12 months?”

Fully 80% of respondents indicate that sustainability is at least mostly embedded throughout their companies’ supply chains; given the more aspirational nature of CSR work, it isn’t a surprise that supply chain professionals are more bullish on this issue than are CSR departments.

When it comes to what single factor most drives their work, the two departments differ more markedly; for the CSR departments, it is reducing risk, and for supply chain professionals it is reducing costs.

Asked what the biggest supply chain issues are, respondents cited human rights (although for supply chain professionals, human rights were second, following traceability). Fifty percent of CSR professionals consider human rights to be the most important issue. Considering advances made in holding business responsible for human rights impacts of their operations—the 2010 endorsement by the United Nations’ Human Rights Council of the
Guiding Principles on Business and Human Rights, for example, as well as the recent development of benchmarks to rate corporate human rights performance—it is no wonder that CSR professionals consider human rights to be of the most importance. The severity of reputational risk alone would be more than enough to make it so.

In terms of opportunities to come, respondents ranked industry collaboration as first, followed by the circular economy and resource efficiency. “It could be argued that circular economy is the optimum point of resource efficiency as organizations will be creating multiple products from the resources originally used for just one product,” the report states.

“It is clear to see that both internal and external collaboration will be critical in creating and managing more sustainable and responsible supply chains,” the report concludes.

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