As businesses increasingly strive to live up to their stated values, considerable reputation risk lingers within their supply chains around substandard labor practices, environmental degradation, corruption, human rights, supplier diversity, and civic engagement.
That’s the key takeaway from new research by Brodeur Partners and Baruch College’s Weissman Center for International Business, which recently surveyed 111 corporate social responsibility (CSR) and sustainability professionals from a variety of industries and sectors.
Among the highlights:
- Transparency is lacking: Only 36 percent of respondents consider it extremely or very important that their suppliers publicly report their CSR/sustainability performance.
- Standards are spotty: Only 54 percent of companies have formal CSR/sustainability standards for their supply chain partners.
- Their effectiveness is questionable: Only two-thirds (67 percent) of respondents think their company’s standards are effective.
- Standards enforcement is lax: Only 42 percent say their company ends partnerships with suppliers that don’t meet its CSR/sustainability standards.
- Labor practices draw concern: Supplier labor practices are the top CSR/sustainability concern, deemed very or extremely important by 77 percent of the respondents.
“Everyone’s doing their best, but if a company can identify problems in its own global supply chain, so can any regulator, whistleblower or advocacy organization,” said Scott Beaudoin, Brodeur Partners executive vice president of social purpose and sustainability, in a news release. “As CSR/sustainability professionals, we must ask ourselves: Despite our good intentions, are we learning all we can about our supply chain shortcomings? Are we doing all we can to fix them?”
Consumers put values to the test
Increased scrutiny on supply chain practices reflects a changing business climate where customer-facing companies are expected to live and enforce their values all the way back through their supply chains to raw materials excavation.
Low pay, long hours, dangerous conditions, bribery, pollution, or ignoring human rights violations all reflect a company’s values even if the offender is a far-flung,
- Nearly two-thirds (63 percent) of companies have formal CSR/sustainability policies and publish a standalone CSR/sustainability report.
- Seventy percent (70 percent) of respondents reported overall good to excellent performance in supply chain partners’ labor practices. Performance in other areas received lower marks.
- Two-thirds work with supply chain partners to help them meet the company’s CSR/sustainability standards.
“To be relevant in business today, a company can no longer use CSR/sustainability as a veneer on its brand,” said Andrea Coville, CEO of Brodeur Partners, in the release. “Customers want to do business with a company that deeply holds strong values, lives those values, and does everything it can to enforce them around the world. Although values are about much more than business performance, your business performance depends on them.”
Download the full report here.
The survey was fielded from May 26 to July 15, 2020 among n=111 corporate CSR and Sustainability professionals that represent 111 organizations across various industries and sectors. Survey participants were sourced from a propriety list of CSR-Sustainability professionals. In addition to the survey, Brodeur Partners collected qualitative feedback from a group of experienced sustainability professionals to provide additional insight to the current CSR and sustainability landscape.
