Policies & Processes

Description

Integrate sustainability considerations into your organisation's value chain-related policies, processes, and standards.

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Value chain-related policies and standards can help you embed transparency and performance expectations across your value chain.

Develop credible sustainable procurement policies and guidelines
Develop a credible supplier code of conduct.
Adapt current processes and develop new processes to deliver on your sustainability commitments

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Develop credible policies and guidelines

Start by creating overarching policies that communicate your commitment to sustainable procurement. As your sustainability practices mature, consider developing issue-specific policies. For instance, these policies could be focused on climate change, human rights and modern slavery, or sourcing particular materials such as palm oil. It can be beneficial to leverage industry standards as guidelines and to seek input from suppliers to create a well-informed policy. Lastly, make sure these policies are used by embedding them into various procurement procedures, including supplier assessments and material sourcing requirements.

EXAMPLE: Disney's conflict minerals policy
Disney created a materials sourcing policy specific to the issue of conflict minerals. The policy addresses sustainability risks related to a material’s region of origin.¹

Develop a credible supplier code of conduct

A supplier code of conduct communicates your organisation's values, expectations, and grievance procedures.² While a basic code typically includes labour rights, environmental responsibility, and ethical practices, you can enhance it by referencing specific benchmarks or external standards with established third-party support.³ Ensure you provide ample context and examples to clarify expectations and unfamiliar concepts.

EXAMPLE: Vodafone cascading expectations
Vodafone's Code of Ethical Purchasing states that suppliers must hold their own suppliers and subcontractors to the same code.^{4, 5}

EXAMPLE: Apple's supplier code of conduct
Apple's Code of Conduct uses OECD due diligence guidance as a reputable third-party reference on responsible mineral sourcing.⁶

Adapt and develop processes to deliver on your commitments

To ensure sustainable policies are effectively applied by suppliers, you may need to adapt and develop your policy implementation processes. Here are some key considerations. One, understand the capabilities and needs of your suppliers to avoid setting impractical demands, as this may lead to unintended consequences like unauthorised outsourcing. Two, seek to facilitate open dialogues with different teams, such as finance and design, to identify and resolve any potential conflicts with your sustainable procurement targets. Three, provide training to your team and your suppliers to improve awareness and understanding of relevant policies.

Footnotes

¹ https://thewaltdisneycompany.com/app/uploads/2021/05/FY2021-Conflict-Minerals-Policy.pdf

² https://www.ardeainternational.com/resources/publications/the-value-of-supplier-codes-of-conduct/

³ https://ecovadis.com/glossary/supplier-code-conduct/

⁴ https://www.vodafone.com/sustainable-business/operating-responsibly/responsible-supply-chain/how-we-manage-our-supply-chain

⁵ https://www.vodafone.com/content/dam/vodcom/sustainability/pdfs/VPC_Supplier_Policy_A2_Code_of_Ethical_Purchasing_V3.pdf

⁶ https://www.apple.com/hk/supplier-responsibility/pdf/Apple-Supplier-Code-of-Conduct-and-Supplier-Responsibility-Standards.pdf

Resources

The Value of Supplier Codes of Conduct: Supporting Transparency and Improving Performance

This white paper, by Ardea International, offers a comprehensive look at supplier codes of conduct. It covers their role in creating accountability and transparency and explains how to implement them effectively.

The Value of Supplier Codes of Conduct: Supporting Transparency and Improving Performance

Model Sustainable Purchasing Policy (Direct Download)

This model policy created by the Sustainable Purchasing Leadership Council (SPLC) offers a readymade template to help you create a sustainable purchasing policy.

Model Sustainable Purchasing Policy

Supplier Code of Conduct

A high-level overview of supplier codes of conduct by Ecovadis. It summarises supplier codes of conduct, including what they are, how to develop and monitor them, and their benefits.

Supplier Code of Conduct

ISO 20400 [PAY TO USE]

The first international standard for sustainable procurement created by the International Standards Organisation (ISO).

Explore Market: It can help inform your pre-planning process by offering guidance on integrating sustainability criteria into procurement processes, engaging with suppliers, and assessing sustainability risks.

Policies and Processes: The standard can be used to help develop and implement sustainable purchasing policies and processes.

Review: The measuring and improving performance section provides techniques to implement and continually improve sustainable procurement.

ISO 20400

Public Procurement For A Circular Economy: Good Practice Guidance

This guide by the European Commission includes the section "Organisational Policy for Circular Procurement" on pages 6 and 7. The section briefly outlines practical considerations for creating a circular procurement policy or incorporating the circular economy into existing policies.

Public Procurement For A Circular Economy: Good Practice Guidance

Supply Chain Sustainability: A Practical Guide to Continuous Improvement

This guide from the UN Global Compact and BSR outlines practical steps that your company can take to achieve supply chain sustainability. This resource provides a wide array of introductory information to better acquaint you with sustainable procurement, such as developing the business case; establishing a vision and expectations for your supply chain; explaining the key aspects of engagement with suppliers; and determining roles and responsibilities. The step-based guide also includes helpful examples that highlight best practices.

Supply Chain Sustainability: A Practical Guide to Continuous Improvement

The Buyer Code

The Buyer Code provides model language for setting out the steps that purchasers can take towards supporting positive human rights outcomes. It promotes the shared-responsibility approach of the UNGPs and the OECD Guidance on Due Diligence for Responsible Business Conduct, and articulates detailed standards that fall under six categories: institutional commitments; selecting suppliers; negotiating the contract; performing and renewing the contract; remediation for human rights harms; and disengagement and responsible exit.

The Buyer Code

Lululemon’s Conundrum: Good Corporate Social Responsibility Initiatives and the Persistence of Forced Labour

This report from Governing Forced Labour in Supply Chains (GFLC) highlights that having supply chain policies and codes in place does not ensure they are upheld at the site level. Using the case of Lululemon, which has has four policies addressing supply chain labour exploitation, it shows that there are significant challenges in ensuring their effectiveness. This is because responsibility to implement and monitor these policies is largely delegated to suppliers and there is a lack of information needed to assess their efficacy.

Lululemon’s Conundrum: Good Corporate Social Responsibility Initiatives and the Persistence of Forced Labour

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