7.1 Ethical Sourcing and Supplier Code of Conduct

Ethical sourcing and supplier codes of conduct are crucial for responsible supply chain management. Companies must consider the social, environmental, and economic impacts of their procurement decisions, ensuring fair compensation and sustainable practices throughout their supply chains.

Implementing these principles involves developing comprehensive supplier codes, conducting due diligence, and performing social audits. By prioritizing ethical standards and sustainability, businesses can create positive impacts while managing risks in their supply chains.

Ethical Sourcing Principles

Defining Ethical Sourcing and Fair Trade

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Top images from around the web for Defining Ethical Sourcing and Fair Trade

• 

  World Fair Trade Organisation - WikiCorporates View original

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• 

  An update on the University’s fair trade journey – Social Responsibility and Sustainability View original

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  Working with Smallholders : A Handbook for Firms Building Sustainable Supply Chains View original

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  World Fair Trade Organisation - WikiCorporates View original

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  An update on the University’s fair trade journey – Social Responsibility and Sustainability View original

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• Ethical sourcing involves obtaining goods and services in a responsible and sustainable manner
• Considers social, environmental, and economic impacts of procurement decisions
• Fair trade ensures producers in developing countries receive fair compensation for their goods
• Supports improved working conditions and sustainable practices in supply chains
• Includes certification programs verifying products meet specific ethical standards (Fair Trade Certified)

Sustainable Procurement Strategies

• Sustainable procurement integrates environmental and social considerations into purchasing decisions
• Aims to reduce negative impacts and maximize positive outcomes throughout the supply chain
• Involves assessing suppliers' environmental practices (carbon footprint, waste management)
• Considers social factors such as labor conditions and community impact
• Encourages innovation in eco-friendly product design and packaging

Implementing Responsible Purchasing Practices

• Responsible purchasing practices prioritize long-term sustainability over short-term cost savings
• Involves building collaborative relationships with suppliers to improve practices
• Includes setting clear expectations for ethical behavior and sustainability standards
• Requires transparency in supply chain operations and sourcing decisions
• Emphasizes capacity building and support for suppliers to meet ethical standards
• May involve paying premium prices to ensure fair wages and sustainable production methods

Supplier Code of Conduct

Developing a Comprehensive Supplier Code of Conduct

• Supplier Code of Conduct outlines ethical expectations for business partners
• Addresses key areas such as labor rights, environmental stewardship, and business integrity
• Establishes minimum standards for working conditions (safe work environment, fair wages)
• Prohibits unethical practices (child labor, forced labor, discrimination)
• Requires compliance with local and international laws and regulations
• Encourages suppliers to extend these standards to their own suppliers and subcontractors

Implementing and Enforcing Vendor Compliance

• Vendor compliance ensures suppliers adhere to the established Code of Conduct
• Involves clear communication of expectations and consequences for non-compliance
• Requires suppliers to acknowledge and agree to the Code of Conduct
• Includes regular assessments and evaluations of supplier performance
• May involve on-site inspections or third-party audits to verify compliance
• Establishes corrective action processes for addressing violations or areas of improvement
• Provides training and resources to help suppliers meet compliance requirements

Compliance and Auditing

Conducting Due Diligence in Supply Chain Management

• Due diligence involves thorough investigation and assessment of potential risks in the supply chain
• Includes researching suppliers' backgrounds, practices, and reputations
• Assesses potential human rights violations, environmental risks, and legal compliance issues
• Involves mapping the entire supply chain to identify all tiers of suppliers
• Requires ongoing monitoring and evaluation of suppliers' performance and practices
• May include reviewing suppliers' own due diligence processes and risk management strategies

Implementing Effective Social Audits

• Social audits evaluate suppliers' compliance with labor and human rights standards
• Involves on-site inspections of facilities and working conditions
• Includes interviews with workers to assess their experiences and treatment
• Reviews documentation related to wages, working hours, and employee records
• Assesses health and safety practices and environmental management systems
• Identifies areas of non-compliance and opportunities for improvement
• Requires follow-up actions and verification of corrective measures
• May involve unannounced audits to ensure accurate representation of daily operations