Ethical challenge

16 May 2013
My role with the London Olympics finally came to an end in March with a final report, a bit of a party and a few last words on a blog. Since the closure of the Commission for a Sustainable London 2012, I have had a bit more time to reflect on some of my other work. For me, one of the big failures of London 2012 was to get to grips effectively with some of the ethical issues in the supply chain (despite some leading-edge work from LOCOG) and to address the question of ethical standards for sponsors. I met with many people in my role as Chair of CSL who had an axe to grind about one company or another - many were very genuine concerns. I promised not to let this issue rest and to this end, I am working on a voluntary basis to help develop an initiative with the Institute of Human Rights and Business. I am not sure where this will lead but I know it is important for major sporting events around the world to show some leadership in this area. In my consultancy work, I find I am spending much more time supporting clients around social, economic and ethical issues in the supply chain than around ‘green’ issues. There seems to be much more concern about how supply chains can be used to stimulate local economic growth and employment. This is difficult to achieve and requires a lot of new thinking about how we manage our supply chains in a way that engages more with local communities and organisations responsible for growth and jobs. Businesses are becoming more engaged through their supply chains with public sector bodies trying to achieve policy objectives with ever-shrinking resources. This is a trend particularly in the property and construction sectors. Many of my clients are becoming more acutely aware of the risks that may lurk in their supply chains. The recent tragedy in Bangladesh, where more than 1,000 people in the textile industry lost their lives working in an inadequately constructed factory building making garments for the world’s retailers, is a chilling example. For business to consumer brands the impact on sales can be immediate and profound. For business-to-business companies it is more a slow erosion of confidence from customers, shareholders and partners. It is not just about labour standards, conflict minerals are the subject of legislation in the US and are seen increasingly as a significant reputation risk for businesses in other parts of the world, particularly those in the defence sector. Many sectors are starting to demand greater levels of transparency in their supply chains, such as the construction industry looking for more materials to comply with BES 6001. For decades, the only material we worried about was timber, now concerns are spreading to a wide range of construction materials and their raw material sources. Finally, we come to the ethical issue of payment of sub-contractors. As a small business owner this is a subject dear to my heart. While payment terms are negotiable and may vary widely, it is ethical to pay in accordance with the terms agreed and it is unethical not to do this, due to bureaucratic incompetence or in some cases arbitrary decisions to extend terms without warning or renegotiation. This principle should extend down the supply chain. This subject is frequently brushed under the carpet and few organisations publish their performance against their own payment conditions. Few supply chain managers really understand the risks that lurk deep in their supply chains. Do you? ☛ Shaun McCarthy is director of Action Sustainability
Central London and Cheltenham
Salaries: Central London: £38,656 - £43,186/Cheltenham: £35,736 - £40,011
Central London and Cheltenham
Salaries: Central London: £48,305 - £56,163/Cheltenham: £45,341 - £53,023
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