How can a small or medium sized business (SMB) achieve the highest environmental and social standards in the workplace? And what can the world’s largest MNCs do to help? These are questions HP tried to answer in a year-long study. We spoke to Mette Andersen, Special Advisor to the Danish Centre for CSR. She is the co-author of our recently released report titled “Small suppliers in global supply chains. Partnerships for sustainable competitiveness “ The report is based on an exhaustive study of HP’s small and medium company suppliers based in the Czech republic, Hungary and Poland. You can also listen to this interview as an audio podcast here.
Q. What sort of challenges do SMB face when they are asked to implement a Code of Conduct that meets the highest environmental and social standards?
MA. Our report indicates that the main challenges for small businesses seem to be lack of financial and human resources. And by “human resources” I mean both lack of people and lack of knowledge and skills. Another barrier SME face when they try to comply with international codes of conduct is that they tend to focus on other aspects of business than social and environmental issues. Typically, SMB focus on more traditional aspects of business such as for instance quality and production planning. And they tend to perceive social and environmental issues as discretional activities which can be set aside to be completed done when they have the time, if they have the resources. So the bottom line here is that SME take a very reactive approach towards social and environmental issues.
Q. HP has promoted a sustainable supply chain for a long time now. Could you provide your insight into what a sustainable supply chain means for you?
MA. A sustainable supply chain is a chain in which the companies that make up the individual links in the chain all work towards social and environmental improvements. They need to demonstrated that they are doing their best to improve the surrounding environment and also the internal organization. It is usually the leading companies in the supply chain, those with the brand name that are driving these efforts by setting certain required standards for their first tier suppliers who in turn set up requirements to their first tier suppliers, and so on. Hopefully, at the end of the day, we will end up with a totally sustainable supply chain.
As it looks today, the SMB as the weak link in the supply chain. Sustainability often ends when SMB enter the supply chain, for the reasons I have already touched on.
Q. The single most important lesson according to your report is that integrating CSR into management processes can improve the bottom line of SMBs; that any company no matter what its size, can benefit from management industry standards. Could you give us some examples?
MA. When companies put greater emphasis on health and safety and the general well-being of their employees, overall productivity often increases. Employees make less mistakes and there is less sub-standard output that needs to be scrapped. Employees are also less likely to be absent due to illness and the amount of accidents at work which disrupt production is likely to decrease. Companies with better health and safety standards will also have a much lower turn-over and will find it much easier to make new hires.
Q. In your report you say it is not necessary for a SMB to have all the procedures of a regular management system in place but that a company’s management needs to clearly communicate the importance of standards across their organisation, to all departments and operations. Could you further explain?
MA. What we have experienced when working with suppliers in Central and Eastern Europe is that they may not always approach social and environmental issues in a systematic way. It tends to be more on an ad-hoc basis. And what we recommend in our report is that smaller companies and smaller suppliers should put more effort into establishing certain standards that are then implemented systematically, to uphold these social and environmental standards. This should include creating a policy, identifying responsible personnel, setting up performance incentives, ensuring continued improvement and regular reviews. We believe that this is the best way of working with social and environmental issues and at the end of the day this will give the smaller suppliers a better result than if they only cover off these issues in an ad hoc way.
Q. HP would like to promote the findings and guidelines from your report to other multinationals as much as possible to encourage their implementation and help raise standards among SMB throughout the global supply chain. What are your recommendations for further promoting the findings and encouraging other multinationals to get involved?
MA. First of all the report and thus also the guidelines is available at websites of the Danish Commerce and Companies Agency, companies, agencies and of the European Commission. The guidelines have been presented and will continue to be presented to industry forums where possible. We aim to disseminate the results and in particular the guidelines to as many of our stakeholders as possible through our websites, through conferences, through seminars etc.
Further information
|
|
Global Citizenship Reports 2006 (*) |
|
|
|
|
|
|
|
|
Printable version
