Kuhn Associates Sustainability Advisors LLC
Sustainable Business News 
 
Volume 2014, Number 10                                                                                         November 2014  
In This Issue
Featured Article
Ideas You Can Use NOW
Calendar of Events
About Us
We help companies throughout the product supply chain create sustainable businesses.

Consulting services
include creating enterprise-level sustainability visions, goals and strategies; re-engineering internal processes to reflect sustainable best practices; maximizing the sustainability of today's complex supply chains and assisting with communicating sustainability information in writing and in media.

Training services include webinars and in-person seminars for large to small groups on topics ranging from GHG accounting to Mastering Supply Chain Sustainability and Social Responsibility. We can custom design training to suit your needs.

Sustainability Tools include Turnkey Solutions sustainability data management software - a cloud-based data collection, management and reporting system designed with supply chain networks in mind.

 

We work in a variety of industries. We are extremely sensitive to clients' budgets and their capacity for change.
 
Whether it's an environmental or social responsibility issue, our team of professionals is ready to help your business. Please contact us to learn how we can help you.
 
Call 212-343-1006 today.


In this newsletter edition, our Feature Article outlines the rationale behind adopting a protocol for addressing the thorny human rights issues that exist in today's complex supply chains.

In our
Ideas You Can Use Now section, we provide some specific tactics for addressing supply chain human rights issues.
 

Finally, in the Calendar section, we suggest a few sustainability-related events in the coming few months that you might want to investigate.

    

Happy reading! 

 

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Feature Article: A Protocol for Addressing Supply Chain Human Rights Issues

Recently, the International Corporate Accountability Roundtable (ICAR) released a report describing some of the challenges that the U.S. federal government faces in its ability to source and procure goods and services worldwide without transgressing the basic human rights of people throughout its complex supply chain. While the report focuses on some of the unique issues of government procurement, it made us once again think of the need for companies to adopt and implement their own protocols to address this timely subject. This Feature Article will set forth the scope of the human rights topic, outline some of the common procurement-related gaps in protecting human rights and argue in favor of the adoption of clear and strong procurement-focused protocols.

 

So what are the possible supply chain human rights issues facing companies? They include:

  • unlawful or low wages
  • excessive working hours
  • harsh, unhealthy or unsafe working conditions
  • child labor
  • conflict minerals
  • human trafficking and forced labor
  • restrictions on freedom of association; and
  • restrictions on freedom of movement.

The prevalence and materiality of any human rights issue to any one company's particular situation will be unique to its industry and the characteristics of its supply chain. So there's no universal "problem" or, for that matter, solution. And because supply chains change over time, issues and their relevance change as well. This point will be important to remember when designing and implementing supplier-facing protocols - embed continuous improvement mechanisms. 

 

ICAR's report found that government procurement lacked a number of policies and practices that could better safeguard human rights. We found much of their list consistent with our observations of potential "problems" in corporate procurement, particularly:

  • Lack of integration of human rights issues and risk analyses in procurement planning (e.g., sourcing practices, internal training)
  • Inadequate notice and clarity regarding human rights- related expectations in RFP, bid and other sourcing processes and documents (e.g., lack of clear descriptions of consequences of violations)
  • Sub-par supplier evaluations for capacity around protecting human rights (e.g., little or no use of third-party/independent assessments of supplier- or geography-specific human rights risks and/or records)
  • Vague or non-existent contract language regarding human rights expectations, metrics and/or penalties (e.g., contracts have no description of human rights portions of supplier scorecards)
  • Inappropriate enforcement mechanisms (e.g., deselection only option when capacity-building investment might be better).

In light of how much overt and covert abuse of human rights exists in today's supply chains, we firmly believe that every company would benefit from a review of its procurement practices and how protecting human rights is or is not embedded (the issues outlined above are a good place to start). And while the opaqueness of many supply chains makes protocols sometimes only partially effective, in our experience they are, in fact, more than just a band aid for very complex problems - especially when crafted by experts (including knowledgeable NGOs) and adopted industry-wide (a best practice approach).

 

Below, in Ideas You Can Use Now, we offer a few tips on how to get started.

 

>> Call or email us to discuss corporate supply chain human rights protocols. We'd love to hear your thoughts and offer our ideas.

Phone: +1-212-343-1006
Email: robert@kuhnassociatesllc.com


Ideas You Can Use Now!
Above we talked about the potential pitfalls in protecting human rights in supply chains that exist in five parts of the procurement process. A robust supply chain human rights protocol needs to cover all of these functions, focusing on the human rights risks that are material to a company's specific industry and circumstances. Here are some things that can get you started:
  • Procurement planning - undertake a materiality analysis to gain insight into and prioritize known and potential human rights risks. Use this scope clarification effort to identify resource requirements. Consider this due diligence investment to be the foundation for the remainder of your protocol.
  • Sourcing - ensure sourcing professionals are notified of risks and have the knowledge and tools to convey the company's awareness of risks and associated requirements to potential suppliers. For low risk issues, consider the idea of offering "pre-clearance" status to supplier candidates who comply with relevant reliable standards, have recent certified human rights audits, etc.
  • Supplier evaluation - early on, assess your team's internal capacity and company knowledgebase, focusing on high-risk issues. Consider relevance of industry, regional and global standards to the evaluation process.
  • Contracting - have a clear, understandable Code of Conduct with explicit language about human rights risks and clarity about the consequences of non-compliance. Require regular, periodic recertification by all suppliers.
  • Enforcement - weigh the balance of carrots and sticks in your enforcement regime and make sure the mix is aligned with your company's human rights risk profile (and updated as necessary!). Consider the value of using third-party/independent monitoring.

To be clear, no human rights protocol will ensure that a company can identify, mitigate and/or remedy all human rights abuses in its supply chain. But we do know that the steps outlined here increase chances for success in this complex area.

 

>> Call us at 212-343-1006 or email us at info@kuhnassociatesllc.com with your questions or comments.


Calendar of Events


Here are a few of the many interesting sustainability events happening in the coming months that we think are worthy of your attention.

December 11, New York, NY - The Breaking Down the Business Case of Solar: Policies & Technologies roundtable will evaluate the business case for the solar market including identifying and monitoring lucrative projects while taking advantage of available incentives and decreasing solar panel prices. Go to http://goo.gl/QvzzN3 for more info and to register.

February 17 - 19, Phoenix Arizona - GreenBiz Forum 15 will define the trends, challenges and opportunities in sustainable business now. To learn more visit http://www.greenbiz.com/events/greenbiz-forum/phoenix/2015.

March 18 - 19, Bangkok, Thailand - Sustainable Brands 2015 Bangkok will be SB's first conference of 2015. Join the community in Bangkok and learn about the local companies who are recognizing the business benefits of delivering better brands. To learn more visit http://www.sustainablebrands.com/events.
Thanks for reading! Please contact us today to discuss anything you've read here, suggest a topic for a future Newsletter edition or learn how we can help you build a more sustainable business.

Call 212-343-1006 or email us at
info@kuhnassociatesllc.com for more information.

Sincerely,

Robert W. Kuhn, President and Senior Advisor
Kuhn Associates Sustainability Advisors LLC
Copyright 2014  Kuhn Associates Sustainability Advisors LLC
Reproduction without prior permission prohibited.