P2.1: Policies and Codes
CERES ROADMAP EXPECTATION
|Companies will set supply chain policies and codes aligned with overall social and environmental standards.|
Building a Sustainable Supply Chain
In the modern economy, supply chains stretch across the globe, creating both efficiencies and risks. Levi Strauss & Co. is pioneering a new blueprint for supply chain management geared at improving worker well-being. Read more...
Check out Roadmap in Action for more examples of how companies are implementing the Ceres Roadmap.
A strong supply chain management system begins with policies and codes of conduct defining expectations for working conditions among contractors and suppliers. Such statements should address both environmental and social criteria, and incorporate environmental standards, pertinent environmental regulations, health and safety requirements, minimum living wages, working hours, freedom of association and collective bargaining, discrimination, child labor and forced labor. Such policies should also reference the Universal Declaration of Human Rights and/or the International Labor Organization (ILO) Conventions. Supply chain codes and standards should be accessible in local languages for all suppliers and contractors.
HOW ARE COMPANIES PERFORMING?
In the The Road to 2020: Corporate Progress on The Ceres Roadmap For Sustainability, we evaluated 600 of the largest U.S. companies on their progress towards meeting the expectations laid forth in the Ceres Roadmap for Sustainability using data compiled and analyzed by Sustainalytics.
For this expectation, the evaluation was limited to assessing social policies and codes (environmental criteria for suppliers is assessed in the Align Procurement Practices expectation). Forty-three percent of the 600 companies (259 companies) have a supplier code in place. Among the priority sectors focused on for this expectation—Food & Beverage, Footwear & Apparel, Retail and Technology Hardware—38 percent (37 of 97 companies) disclose supply chain codes of conduct that reference the ILO conventions.
It is not uncommon for companies to share common suppliers within their respective supply chains. This can result in a single supplier dedicating significant time and resources to comply with the competing requests of it business customers. In an effort to find solutions to this challenge, companies and key stakeholder organizations are collaborating to create common supplier requirements in sectors such as Apparel & Footwear, Technology Hardware and Electric Utilities.
For example, the Sustainable Apparel Coalition (SAC) was founded in 2009 by a coalition of environmental organizations and companies including Gap, H&M, Kohl’s Department Stores, Nike, VF Corporation and Walmart. The group is developing an industry-wide, open-sourced, supply chain index that measures water and energy use, GHG emissions, waste and the social labor practices of suppliers. This effort allows companies to present a common standard to suppliers and streamline the collection of sustainability performance data. The SAC plans to expand membership in 2012 to all footwear and apparel companies and eventually to other consumer industries.
Standardization of supplier expectations across a group of companies can effectively raise the bar for the entire sector. These initiatives can also provide companies that are just starting out with resources for addressing sustainability challenges within their own supply chains. With a commitment to collaboration and open sourcing, these industry initiatives can contribute to further uptake and implementation of supplier codes and policies.
All 600 companies have been assessed for this expectation. Additional indicators and analysis is provided for nine priority sectors, covering 251 companies: Autos & Transportation, Financial Services, Food & Beverage, Footwear & Apparel, Retail, Technology Hardware, Technology Software & Services, Oil & Gas Producers and Utilities. Go to the Sector Performance section for more detailed analysis.
Click on a performance tier below to view more information on the priority sectors.