Working within procurement or sustainability and unsure about the benefits of putting together a code of conduct? Think of it a prenuptial agreement about transparency and responsibility for a happy, lasting relationship. Any company that is serious about reducing its climate impact and improving things like working conditions and corruption in its supply chain needs a supplier code of conduct. It’s like a prenuptial agreement to which you can hold external partners, such as suppliers or holdings, or internal units, such as offices or projects, to account and monitor how things are going.
What is a code of conduct?
A Code of Conduct is the official document of rules, principles, employee expectations and values that are fundamental in an organization for operating in a social, ethical and environmental manner. It provides guidance for staff in areas and situations when they need to take personal ethical decisions, and can simultaneously be used to set the standard for suppliers and partners.
components of a supplier code of conduct
We looked at supplier codes of conduct from a range of companies, including Axfood, Ericsson, Google Inc., KappAhl, NENT, Nudie Jeans, SAS and Stockholm Exergi and here are some of the most common components:
Introduction: This is a legally binding document, so it’s important to explain clearly at the beginning what your supplier code of conduct aims to achieve. State the parties involved in the agreement, which country laws you observe, and to which rules and regulations you want them to adhere.
Labour: Area to cover include freely chosen employment, anti-human trafficking, child labour avoidance, how to employ student interns, working hours, wages and benefits, humane treatment, non-discrimination, freedom of association and collective bargaining, immigration law and compliance, and health and safety conditions in accordance with OHSAS 18001 or equivalent.
Environment: This will cover areas such as air emissions, hazardous substances, materials disposal, product content restrictions, resource efficiency, and wastewater and solid waste. The environmental standards depend on the nature of your relationship with the supplier, in which industry or sector you operate, and the types of products and service you produce together. Some suppliers may have an Environmental Management System (EMS) in place to comply with ISO 14001 or equivalent.
Ethics: Ethical guidelines are established to achieve success in the marketplace without ignoring social responsibilities. Areas include business integrity, the need to avoid improper advantage, zero tolerance for bribery and corruption, disclosure of information, intellectual property, fair business, advertising and competition, responsible sourcing (minerals), international trade, privacy, and risk assessment and management.
Ongoing improvement: Few companies can claim to be perfect in every area of their business operations, and so the need for continual dissemination and checks over adherence to the supplier code of conduct is vital. This section covers areas like staff training, communication, audits and assessments, and reporting.
References: The following standards are among those commonly used in preparing supplier codes of conduct and may be a useful source of additional information: ILO Code Of Practice In Safety And Health, ILO International Labor Standards, OECD Guidelines For Multinational Enterprises, United Nations Global Compact.
Now you have a clearer idea of what a supplier code of conduct comprises. It’s a complex document but you won’t regret doing it. It’ll supercharge your sustainable sourcing efforts and bring credibility to your commitment to supply chain sustainability.
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