Introducing the Supplier Code of Conduct
Having understood that a company must exercise control over its sustainability issues in the supply chain, companies have introduced Supplier Codes of Conduct for this task. SCoCs are often the first sustainability document a company adopts for its supply chain. They can play an important role: they signal expectations, set a baseline for acceptable behaviour, and help standardise communication across a large supplier base. Many also cover the right topics: human rights, labour standards, health and safety, environmental protection, anti-corruption, and so on.
Codes are typically written to apply to all suppliers. That universality has a cost: The codes often stay on a relatively abstract level and rely on high-level commitments such as “Respect human rights” or “Provide safe working conditions. These statements are valuable as principles, but they rarely answer the operational questions a supplier needs in order to comply:
- What kind of action related to human rights and environmental due diligence is required from the supplier, in what format, and how often?
- Who should do what when a risk is identified, and how is progress tracked?
- What kind of support (if any) does the buyer give for the supplier to be able to meet the requirements?
It’s also important to understand that the Code does not bind the supplier automatically. Next you’ll learn when the Code (or other sustainability related contract appendices for that matter) becomes binding.