Supplier code of conduct
ESG is becoming increasingly prominent in the business landscape and is an important metric for investors when assessing the attractiveness of a business, and for other parties entering into contracts with your business, particularly within the public sector.
Businesses are frequently asked to confirm that their ESG strategy and values are reflected throughout the supply chain. A supplier code of conduct is a great way to ensure that suppliers comply with your requirements, and to set these out in one document.
Why does ESG in the supply chain matter?
Scope 3 emissions are increasingly being reported on as an ESG metric. This shows the importance of taking a broad view of the impact of your business as a whole and not just the policies your own business has in place.
If your business has a strong ESG strategy and values these could be undermined by having suppliers with, for example, a lack of care for the environment, discriminatory working practices and poor data governance.
Why put a supplier code of conduct in place?
Reporting and analysing your impact is much easier when all your policies are brought together in one document and suppliers are asked to confirm they are compliant.
Having one code of conduct gives you an easy way to show investors, customers and staff that you have strong ESG values which are reflected throughout your supply chain.
Contractual force
Once you have a code of conduct in place you can seek to contractually require that your suppliers comply with your code. This brings weight to your code and allows you to enforce it and impose penalties for non-compliance.
Why does it matter
A supplier code of conduct is important because it enables you to set out your position on key ESG matters and ensure a uniform position amongst your suppliers.
What it will help you to achieve
Customers, funders and investors are increasingly asking for assurances about not only your own ESG position but the position throughout the supply chain, for example warranties that your suppliers are not producing high levels of greenhouse gas emissions or breaching modern slavery legislation.
A supplier code of conduct is easy to signpost to investors and customers, and will bring together all ESG related requirements in one place. You can contractually require compliance with the code, meaning that you can enforce it and take steps to deal with non-compliance.
Some examples of our responsible business related support
- Support and recommendations on introducing ESG driven decision-making
- Support and recommendations on an appropriate framework and monitoring matrix
- Undertaking gap analysis against the framework to identify areas for improvement
- Reviewing or providing appropriate organisational policies
- Providing training to board and senior management to underpin those policies
- Support with setting and implementing a stakeholder engagement strategy