How To Build A Robust Supplier Code Of Conduct
A good Supplier Code of Conduct should be a foundational element of your responsible sourcing program and due diligence - it’s foundational for your supply chain sustainability efforts.
The good news is that you may already have one. Make sure it’s comprehensive, materially relevant, and aligned with best practices.
Here’s how you can build one from scratch or make smart updates to your existing one.
What is a Supplier Code of Conduct?
A Supplier Code of Conduct is a foundational business document that articulates the responsibilities and expectations that a brand has with upstream partners in their value chain.
They are helpful for a variety of traditional legal and business reasons related but also helps define the terms of your relationship related to human rights, working conditions, and other sustainability issues.
However, these areas of impact can be missing from legacy Codes of Conduct which means they fail to provide a first line of defense when it comes to risk reduction.
Why do you need a Supplier Code of Conduct?
They’re not a silver bullet or panacea, but they do represent an important initial step in demonstrating credible due diligence on human rights and environmental practices in your value chain.
When you build a Code of Conduct that you require contract manufacturers and suppliers to sign you build an additional layer of risk reduction into your sourcing practices. You can lean on this document as a starting point for greater transparency, traceability, and ultimately positive impact moving forward.
And as state (e.g. CA Supply Chain Transparency Act), federal (e.g. Uyghur Forced Labor Prevention Act) and international (e.g. EU Corporate Sustainability Due Diligence Directive) regulations continue to be enacted, your Code of Conduct can help set the stage for future compliance.
How can you build (or update) one?
Through our work advising brands in building these we’ve found that the best in class Supplier Codes of Conduct have a few things in common:
Comprehensive: Covers all materially relevant areas of impact like forced/child labor, worker health and safety, right to organize, regulatory compliance, emissions, pollution, certifications, and other environmental issues and apply to subcontractors and sub suppliers.
Credible: Is based on established international guidance like Fair Labor Association Workplace Code of Conduct, International Labor Organization standards, and OECD Due Diligence Guidance.
Enforceable: Make sure these are signed documents, include in new supplier onboarding, define how violations will be treated, and describe the use of corrective action plans.
We can quickly help with your Supplier Code of Conduct so please get in touch!