Giving Compass' Take:
- Here are four points of leverage to help push corporate leadership toward equitable and responsible sourcing when it comes to ESG.
- How can donors play a role in encouraging companies to make meaningful steps toward equity in CSR and investing?
- Learn how impact sourcing can be a sustainable model for social justice.
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“We are all very good at the lip service.” What many of us fear and suspect—and what an executive from a leading global brand recently confirmed—is that companies do not take responsible sourcing seriously enough for it to have a meaningful impact. Instead of prioritizing the human rights of workers and communities, or protecting the environment, our interviews with executives from 21 leading brands suggested that companies will adopt only as much responsible sourcing requirements as they must. “We have invested so much with NGOs, yet we see the same problems as 10 years ago,” an executive told us; another added, “I’m not satisfied with the impact we are making. I’m not surprised we haven’t made more progress.”
What needs to be done? One executive put it bluntly: “The best strategy is to be vicious, attacking the CEO publicly.” Without denying the difficulty and complexity of responsible sourcing, many of our interview subjects made the same point: coordinated, sophisticated public pressure—including naming and shaming top brands and other stakeholders—can help catalyze necessary actions. Companies cannot simply rely on supplier audits, responsible purchasing scorecards, and the annual disclosures included in ESG (environment, social, governance) reports. Doing more of the same may check the boxes of ESG compliance systems, but to improve the well-being of workers, communities, and the environment, companies need external pressure (which includes better and smarter government regulation).
As these executives work in corporations that represent leading examples of responsible sourcing performers in their own sectors and across industries, their revelations are particularly concerning. The implications for companies in lower tiers of performance are likely even worse.
For responsible sourcing to become a true business imperative that makes a material difference, executives highlighted four points of leverage:
- Companies Need to Feel the Pressure of Activism
- Government Needs to Step Up
- A Business Case to Compel Real Change
- Making CEOs Responsible
Read the full article about responsible sourcing by Steve Rochlin and David Wofford at Stanford Social Innovation Review.