Have you ever wondered how responsible your company’s supply chain really is? A report from The Economist Intelligence Unit (July 2017) found that four in five business executives claim their companies have a responsible supply chain. But the reality is less positive. While many companies have put responsible supply chains high on their agenda, it has become a lower priority for a significant 30% of global businesses over the past five years.
So why do many companies fail to see the importance of supply chain responsibility?
The report cites complex supply chains with multiple suppliers as the number one hurdle to responsibility, while some companies simply expect others (eg government) to take the lead through regulation and legislation.
In other cases, companies have other priorities and it takes a major event, such as the Bangladesh factory collapse, to spur them into action. After such a catastrophe companies immediately bump the more tangible and pressing issues like health and safety up the agenda, while more hidden and apparently less risky issues like child labor and gender equality, or harder to assess issues like climate change remain overlooked. The report showed these key issues receive little attention from companies: just 22% address child labor, 23% climate change and carbon footprint, and 28% gender equality.
But these are all critical issues, and with corporate reputation and long term business sustainability at stake, the report urges CSR professionals to translate social and environmental issues from moral imperatives into risks and opportunities relevant to their stakeholders. That said, no one company is expected to tackle all the issues alone. In many cases these are sector-wide problems which can only be tackled through collaboration of all stakeholders. And that is where third party certification schemes like UTZ come in.
On the right track
By partnering with UTZ you have the assurance that your company is contributing towards improvements in the more challenging issues of child labor, working conditions and climate change across the coffee, tea and cocoa sectors.
Given the complexity of quantification for such issues, third-party experts like UTZ play an important role in developing measurement and forecasting systems. For instance, the UTZ certification scheme requires both internal and external monitoring at farm level to ensure continuous improvement: doing more with less, smart farming practices, being more sustainable, and training people in management practices. As such, certification is cited as one of the tools a company can use to make progress.
Protect and strengthen brand reputation
There is no time for more excuses. We already know that consumers demand responsibility and transparency. Companies that show leadership in this area will find it not only mitigates risk but also brings business benefits in terms of employee and consumer satisfaction and longer term sustainability and profitability.
As UTZ CEO Han de Groot summarises: “This is not a matter of choice anymore. It is a matter of not being left behind.”