RISK, COMPLIANCE

How to create an ethical sourcing strategy that reduces critical business risk and minimizes harm

For those in the corporate world 2020 has whipped up the perfect storm. Not only is most of the globe in the grips of recession, but the pandemic that led us here has generated some formidable challenges. Set against a background of growing economic, social and environmental instability, the art of doing business has rarely felt more fragile.

A growing number of governments across the globe are forcing procurement teams to better understand what their suppliers are engaged in. In 2010 California introduced the Transparency in Supply Chains Act. In 2015 the UK enacted the Modern Slavery Act. In 2017 France adopted a Corporate Duty of Vigilance Law and in 2018 Australia's Modern Slavery Act was passed by both houses of Parliament. Germany and Canada have also announced their intention to legislate supply chain reporting, and earlier this year the European Commissioner for Justice announced that the commission will propose legislation in 2021 on mandatory 'corporate sustainable due diligence'.

With Covid-19 squeezing already tight budgets it might feel like an inopportune time to refocus corporate efforts and redirect spend. But with the campaign against supply chain mismanagement only gathering momentum internationally, businesses have little choice but to start exploring their own ethical procurement strategy.