Seven practical tips for sustainable supply chain audits

If you want to conduct a proper sustainability audit of your supply chain, it can be difficult to approach the task. Many companies have more or less fleeting relationships with their subcontractors. Many don't feel they have the purchasing power, resources or relationships to make demands and ask questions. But ultimately, any problems in the supply chain fall back on your own business, and it's important that the efforts you make to check your supply chain are resource-efficient and high-impact.
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Here are Factline's seven concrete tips on how to tackle your task.

1. Get an overview, take a stand and prioritize which initiatives can make the biggest difference
CSR covers a wide range of considerations such as reducing CO2 emissions, recycling, workers' rights, harmful chemicals, child labour, working environment, supply chain responsibility and more. Therefore, it is important to be clear on which areas of focus are most relevant to your company and how best to address risk areas and issues. If you work in a resource-intensive manufacturing business, climate and environmental considerations may be the focus areas that need the most attention. If your products require a lot of labor to complete, social considerations such as workers' rights may be the most important. That doesn't mean you shouldn't also buy organic coffee in the canteen. A small effort is still an effort, the small steps also make a difference. What is important is that buying organic coffee cannot compensate for what you do, or don't do, in your core business.


2. Make demands - both on product and production
If you want to move the CSR agenda from "nice to have" to "must have", you probably need to make new, stricter demands on your suppliers. All companies are used to making specification and quality demands on their subcontractors, and similarly, you should also make demands on sustainability. Setting requirements for the product itself regarding e.g. environmental considerations is often easier than requirements for the production itself, since you can, for example, test for harmful chemical substances or other properties when you have the product in hand. There are fewer gray areas, and more solutions such as certifications and labeling schemes are ready on the shelf. It gets more complicated when it comes to the actual production, but this is just as important.
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3. Think holistically
Naturally, the requirements must be followed up with an employee who ensures that what has been decided is also implemented. It must be clear to the supplier what you expect, and you must follow up and rectify any shortcomings in your collaboration with the supplier. This requires a broad range of initiatives. The first is typically a code of conduct. Too often, the code of conduct becomes a "dead document" that is sent to the supplier on the first order and is not looked at after the first contact. The second tool is an audit that can provide a snapshot of the conditions at the supplier. A self-assessment with a tool like Factlines is a working tool to get an overview of the suppliers' efforts, evaluate risk and identify where improvement is needed. All of these complement each other.

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4. Build solid and long-term relationships with suppliers
It is important to involve suppliers in the change initiatives that are launched. And that requires good relationships. It can be tempting to shop around among suppliers and find the cheapest supplier with the first good offer that comes along. Should you discover problematic conditions, you can hold them at arm's length and say that the conditions violate your own principles. This can quickly become bad business, both financially and in terms of CSR. Long-term relationships provide a shared understanding of needs and framework conditions. This leads to better products and makes it easier for the company you work for to influence change.
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5. Participate and learn
The CSR area is constantly evolving and new solutions are constantly being developed. There are many different media and networking forums where you can participate and get good advice. Much of it costs nothing but time, and it can be very effective. Instead of going it alone with CSR, you can be inspired by others. Factlines has regular seminars and forums that you are welcome to join.


6. Ethical supply chains are a process
A good and healthy supply chain does not come by itself, but requires a long and tough pull where you have to take into account cultural differences, local working conditions and different expectations. Fortunately, no one expects everything to be solved in a flash. In most cases, you are protected from bad cases if you make sure to communicate clearly and openly about the risk areas you have identified and the steps you intend to take to resolve them.


7. Make ethics part of the company's DNA
It is important that sustainable thinking is integrated into the company's culture and embedded in the core business. Otherwise, CSR efforts will easily be overlooked in individual projects that gradually develop in the background without being followed up. For more and more companies, sustainability is part of their core narrative; part of their "license to operate". Other companies work with the triple bottom line, where in addition to keeping the financial bottom line in balance, they work with a social and environmental bottom line. In this way, sustainability is considered in all processes, from the initial idea to the product going on sale.