Corporate Social Responsibility and Sustainable Supply Chains
Corporate social responsibility (CSR) has shifted how companies conduct their business and operations. Understanding CSR and using sustainable business practices as part of a CSR approach helps businesses achieve their sustainability goals and drive positive change through their supply chains.
What is corporate social responsibility (CSR)?
CSR is an organisation’s commitment to taking a responsible approach towards the people, communities and the environments it operates within. Companies with CSR policies make themselves accountable to their customers, investors and other stakeholders for the impact they have on the world. This includes their supply chain and sourcing practices. Consequently, CSR is also a strategic approach where a company aims to have a positive impact in the regions and communities it works with.
How to measure CSR in your supply chain
There are four different areas of corporate social responsibility: environmental, ethical, philanthropic and economic responsibility. Companies may look at these responsibilities just in relation to their own operations, or in relation to their supply chains too.
The positive impact of social responsibility in supply chains on sustainable performance is also increasingly clear. Many investors, governments and consumers now expect companies to understand their social and environmental impacts in their supply chains, not just their own organisations.
One way to start measuring CSR is by looking at each area separately. However, taking a holistic approach to sustainability can be more efficient in the long term, have cross-departmental benefits and maximise positive impacts on people and the environment.
1. Environmental responsibility
Environmental responsibility includes taking steps to minimise waste and pollution while also working towards an environmentally friendly future for all.
Your company can begin by setting commitments to reduce the environmental impact of raw material extraction. Secondly, look at tracking environmental impact through data points on air emissions, water usage and physical waste. This could be in your own operations or include parts of your supply chain too — which will help to identify major environmental risks in it
2. Ethical responsibility
An aspect of sustainability that is often overlooked. Ethical responsibility relates to business ethics, governance and how an organisation treats people.
There are five social risks organisations should prioritise when looking at ethical responsibility. These are forced labour, child labour, discrimination, freedom of association, and health, safety and hygiene.
3. Philanthropic responsibility
This type of CSR is important when looking at an organisation’s vision and purpose. Companies with strong philanthropic CSR aim to make positive contributions to society. In practice, this often means companies support charitable initiatives or create their own (and sometimes both).
To get started, your organisation can begin contributing to charities that represent causes in line with your company’s business, activities and purpose. For example, a fruit juice brand might support a charity that works for gender equality in agriculture. Your company could also support employees to volunteer or work in partnerships with smaller, local not-for-profit organisations.
4. Economic responsibility
A business must operate in a financially responsible way to be successful, of course. But economic responsibility extends beyond commercial success and considers the wider economics of a company’s financial decisions, such as making funds available to support CSR and sustainability programmes.
Another example of economic responsibility is paying living wages to employees, and supporting living wages in a supply chain.
Benefits of corporate social responsibility practices
Organisations that embrace CSR reap several benefits:
- Raising brand awareness and improving reputation.
- Creating a competitive advantage by addressing potential CSR risks ahead of time and building a resilient supply chain.
- Attracting new investors and customers.
- Increasing employee engagement by leading a purpose-driven organisation.
- Driving positive impacts for workers and communities, which supports their resilience.
- Avoiding financial penalties by meeting legislation on the environment and workers’ rights.
How Sedex can help
Sedex offers intelligent tools and expert guidance that help organisations like yours achieve their corporate social responsibility goals. Through our technology and data-led insights, Sedex can help you build a more sustainable, responsible supply chain to drive positive change and operational success.
- Store, share and report on supply chain information and manage supplier performance on health and safety, due diligence and CSR goals with the Sedex Platform.
- Gather data about activities and working conditions across your supplier sites with our Self-Assessment Questionnaire (SAQ).
- Identify social and environmental risks across a global supply chain with our risk assessment tool, and compare inherent risks in relevant countries and sectors to help you decide where to focus.
- Our Consulting team can design a holistic supply chain sustainability plan that focuses on your business priorities and delivers tangible progress for you and your key stakeholders.
