Addis Ababa, Ethiopia
Third International Financing for Development Conference
2015 China Summit on Caring for Climate
New York, United States of America
United Nations Private Sector Forum 2015
A company’s entire supply chain can make a significant impact in promoting human rights, fair labour practices, environmental progress and anti-corruption policies.
However, UN Global Compact participants rank supply chain practices as the biggest challenge to improving their sustainability performance. Extending the UN Global Compact’s Ten Principles into the supply chain can be difficult because of the size of many supply chains. Suppliers may be located large distances from headquarters,
or in regions with lower sustainability standards.
Sustainability across the supply chain is critical across a number of topics, including anti-corruption. Corruption risks in the supply chain can cause reputational, financial and, under some legislation, legal consequences. Supply chain efforts can also support other sustainability goals for businesses seeking to act responsibly.
The UN Global Compact encourages companies to make sustainability a priority from the top of the organization. If the chief executive sees the supply chain as an extension of their workforce and community, the company can set expectations for best practices across its supply chain. These can include key areas such as selection, training, auditing and remediation.
Doing so promotes a broader understanding within an organization of how decisions made, beyond procurement, can affect the supply chain. For example, legal staff,
product developers and marketing all can have an impact. In addition, companies must look at their supply chain as a whole, and consider the suppliers that may have the most significant challenges to address.
To help, the UN Global Compact hosts a website that is a one-stop shop for materials, initiatives and business practices on supply chain sustainability. Additionally, we develop guidance, such as our recent Guide to Traceability. We also host webinars on topics such as gender equality and occupational health and safety in the supply chain.
Because supply chain sustainability is a cross-cutting issue, we apply this work across all four UN Global Compact issue areas (human rights, labour, environment and anti-corruption).