No place for supply chain 'dirty secrets'

10 October 2013

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11 October 2013 | Andrew Pring

Consumer groups will increasingly ratchet up pressure on companies that allow third and fourth tier suppliers to engage in unethical practices.

That’s the view of Nick Baker, sustainable procurement manager at Skanska, who told the CIPS Annual Conference in London yesterday, “We can no longer draw boundaries around factories or offices in other parts of the world. Consumers are becoming much more aware of the links between what they buy and how it’s made. Unilever’s chief executive Paul Polman said it is ‘our dirty secret that we often don’t know who our suppliers are’. None of us can afford to be in that position today – the risk of reputational damage is too great.”

Baker said that global sustainability standards would get much tougher, but said that it is down to corporations to drive the process, not governments.

“Sustainability presents a great business opportunity. Unilever’s carbon footprint has fallen greatly and at the same time its profits have grown. You can achieve both. It makes sense to use resources more efficiently, and there is a clear moral imperative too.”

Skanska’s creation of a sustainability school for its suppliers has made a big difference to carbon reduction in its supply chain, said Baker. The project, which was also driven by 10 other contractors, recently won the overall prize at the 2013 CIPS Supply Management Awards.

Hugh Jones, director at the Carbon Trust, agreed the pursuit of sustainability makes a strong business case, particularly with energy and materials savings and more efficient suppliers. He said that it can also help with staff recruitment and retention amongst younger employers, who tend to be more environmentally aware than some older colleagues.

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