5.2 Including Sustainability Issues in Supplier Requirements

How do you include sustainability issues into general supplier requirements?

Every company has, in one form or another, a set of general supplier requirements (‘supplier code’, ‘supplier code of conduct’, etc.) which usually contain chapters about legality, workers’ rights, child labour, health and safety, environmental responsibility, etc. Such a supplier code can be used as an effective instrument for making sure that sustainable sourcing becomes an integrated element of all company-supplier relations as long as they contain appropriate clauses on the subject.

As you implement your strategy, you will want to think about your relationships with suppliers who must implement it.  What kinds of investments will they need to make? What is their ability and interest to invest – they will be asking “what’s in it for me?” What is your role in enabling that investment? It is important to think about the power relationships and how their business will benefit from participating in your sustainability programme. Sometimes just winning your business is an adequate incentive, but sometimes even the biggest buyers will not be able to simply dictate compliance or participation. It can thus be useful to ask yourself the following questions:

  • What are the existing rules that regulate relationships with your suppliers?
  • Do they contain sufficient clauses about sustainability and related issues? Is there a need to update these clauses?
  • Do they contain sufficient requirements with respect to suppliers’ obligations towards the farmers who supply them? Is there a need to extend or update these requirements?
  • Do they contain effective sanctions against suppliers who do not comply with the sustainability requirements? How can you incentivise continuous improvement?
  • How seriously has your firm asked these questions in the past? Was it a box-ticking exercise or a serious endeavour to which suppliers were held accountable? If the intention is to drive change rather than tick boxes, will you follow up on the questions posed to suppliers?

Often you will discover that your task is much more than just including sustainability requirements into your supplier code, but that you have to rethink the whole concept on which your relationship with suppliers is based. You may need to think about changing your supply model considerably (see 5.1, especially the section on “Adapting the Sourcing Model to Make Sustainable Sourcing Possible”).

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