Some of the biggest global retailers developed a Unified Code of best practices to overcome factories audit fatigue caused by the multiple ethical audits.
For some time now, factories have been complaining about audit fatigue caused by the multiple ethical audits requested by their customers. This has come about because customers have their own programs, mostly based on the same core ILO conventions with slight variations in content or audit methodology. As mutual acceptance has failed to materialize, factories report having to undergo multiple audits leaving them little time to tackle the resulting action plans or implement sustainable solutions to rectify any nonconformities.
Companies have been discussing ways to overcome these hurdles. In 2007, some of the biggest global retailers came together to develop a Unified Code of best practices to improve labor standards in their supply chains. This initiative became the Global Social Compliance Program (GSCP) and the initial retailers, Carrefour, Metro, Migros, Tesco, and Wal-Mart were soon joined by many others. The program now has more than 650 retailers, manufacturers, service providers and other stakeholders working on developing a shared, global and sustainable approach for the continuous improvement of working and environmental conditions.
These participants have existing ethical and environmental codes of their own, many based on existing programs such as Business Social Compliance Initiative (BSCI), Ethical Trading Initiative (ETI), Initiative Clause Sociale (ICS) or others. However, they have all agreed to set aside their own preferences to:
- Build consensus on best practices
- Develop a clear and consistent global message for suppliers
- Drive convergence by building comparability and transparency between existing systems
- Reduce audit fatigue and duplication
- Strengthen collaborative efforts for building capacity and training
The program is also fully inclusive, allowing companies to choose to adopt its Code and tools or to use their own if they meet the same criteria.
New GSCP code and tools
Three years on, GSCP has published a reference code and tools covering labor standards, environmental management and auditor competence as well as a methodology to allow companies to benchmark their codes against these tools.
The group also has a number of other work streams in process looking at Management Systems, Data Sharing and Remediation. In order to maintain their inclusive approach the work streams apply a consultation process and input is welcome from all interested parties. The whole process and outcome is reviewed by an advisory board made up of a variety of civil society international stakeholders such as NGOs, trade unions, academics and the like.
What is the point of the initiative? There currently exist a high number of codes and programs as well as local laws intended to regulate the way companies operate. The initiative gives suppliers a single set of requirements to meet and the possibility of undergoing a single audit accepted by multiple buyers. This should lead to significant cost savings both in terms of audit fees and lost productivity while audits take place. At the same time buyers hope to benefit from a process reduction in the need to audit all their suppliers. This should, in turn, release resources for follow-up and remediation.
What Next? GSCP members are now benchmarking their systems against the GSCP reference tools to identify changes required to their systems where they wish to continue with their own program rather than adopting the tools themselves. The equivalence process will then give members a way to recognize other programs and ensure that they can accept each other’s reports.
SGS has been actively engaged with the GSCP program since its inception and is well placed to conduct audits against the current reference tools and to help companies integrate the social and environmental modules, providing them with a cost and time-effective approach. Suppliers can also get ahead by proactively being audited against this program. Where customers still want to have their own audits undertaken, suppliers will be better prepared by having undergone the GSCP audit process.
Social Responsibility Solutions Manager
SGS United Kingdom Ltd
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