Have Supply Chains Changed Since Rana Plaza?

One year after the collapse of the Rana Plaza apparel factory in Bangladesh killed more than 1,000 people, it is clear that things aren’t changing quickly enough for workers in global supply chains.

In fact, according to a forthcoming report by Ceres and Sustainalytics that tracks corporate progress on sustainability issues, 42 percent of the 613 largest publicly traded companies in the United States still do not have supplier codes of conduct in place that address human rights in supply chains.

Ceres set specific expectations for corporations in regards to supply chain management in its Roadmap for Sustainability. A key expectation is that companies must ensure that suppliers meet the same environmental and social standards — including disclosure of goals and performance metrics — as the company has set for its internal operations.

This is a simple message, and while Ceres recognizes that it takes effort, investment and commitment to implement sustainable business strategies across global supply chains, companies must do more to demonstrate that they are being proactive and not waiting for the next factory fire or collapse before taking action. Too is much at risk for the company and its investors. But more important, people’s lives are at stake.

A relative holds a picture of a missing garment worker, who was working in the Rana Plaza building when it collapsed, in Savar, 30 km (19 miles) outside Dhaka April 24, 2013.

Until companies elevate sustainability as a core value in procurement, comparable to quality and price, suppliers will not be adequately incentivized to meet the environmental and social expectations set forth in their customers’ supplier codes of conduct. According to the forthcoming report, 47 percent of companies demonstrate some inclusion of environmental and/or social criteria in the procurement decision-making process. Given the intense, widespread focus on supply chain impacts for companies in various sectors, we expected this number to be higher.

Take Control of The Supply Chain
Companies, especially major international brands, have the power to significantly influence the behavior of their suppliers. As customers, they can insist that suppliers meet international human rights standards, and they can engage and help suppliers improve sustainability performance through incentives, technology and training. Companies know that business viability and success depends on managing their supply chains sustainably.

The forthcoming report, to be released April 30, will show a moderate increase in company engagement with suppliers to support social and environmental performance improvement. A third of companies have some activities in place to engage suppliers on sustainability performance issues, up from 27 percent in 2012. There is clearly room for improvement here, as sharing expertise on having a long-term sustainable business can only strengthen the resiliency of corporate supply chains.

On the anniversary of the Bangladesh disaster at Rana Plaza, we should take a moment to pause, reflect and inspire ourselves to be bolder in our commitments to change and to accelerate the pace of our actions.

It is clear that we have the power and the ability to make supply chains safer and more sustainable. Waiting for another disaster in Bangladesh or anywhere else in the world is inexcusable.

Source: GreenBiz

Related: Global Supply Chains: Deciding the Way Forward