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11 April 2014 | Gurjit Degun
There is an increasing challenge to manage supply chains responsibly but companies are taking action to improve standards, according to an MEP.
Richard Howitt, the European Parliament’s rapporteur on corporate social responsibility (CSR) and Labour MEP, was speaking at the Sedex Global (the Supplier Ethical Data Exchange) Responsible Sourcing Conference in London on Wednesday.
At the company’s 10th anniversary reception, Howitt explained how much the emphasis on CSR has changed. “Ten years ago this room would have been filled with public relations people or corporate responsibility managers, they would not have been anything to do with the core business strategy of the company,” he said.
“When I look at you, I’m looking at suppliers as well as purchasers and people who would not have been involved in the debate about corporate responsibility a decade ago.”
Howitt added that another big change over the past 10 years has been to do with supply chains. “It’s about complexity, it’s about wealth and it’s about the sheer number of companies that were involved in global supply chains compared to their outsourcing,” he said.
“According to the economy, some 80 per cent of manufacturing around the world is sub-contracted. It’s a good thing. It throws up the challenge to manage supply chains and it means that the focus in terms of concern is now much less about the company, the new concern is much more about the supply chain.”
He referenced the Rana Plaza factory collapse in Bangladesh, a year ago this month, making a “sea change” in the debate about CSR. He added: “It does show a hopeful note that sometimes good can come out of tragedy because what I see is that companies are now increasingly committed to taking proactive action to improve standards. Ten years ago it was about how companies could insulate themselves from any hard questions of what was going on about their supply chain.”
Howitt also listed some issues to consider for the future. These included taking the living wage debate “out of developed countries and into developing countries”.
He added: “Companies should fulfil corporate responsibility as part of their licence to operate in other parts of the world and I suggest to you that if Europe and developed economies want open trading relationships in the world, then part of our licence to achieve that is to ensure that our businesses fulfil corporate responsibility and responsible supply chain management.”