Working with Asian Suppliers: The CSR Challenges for Norwegian Firms
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Transcript of Working with Asian Suppliers: The CSR Challenges for Norwegian Firms
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Verité
Working with Asian Suppliers: The CSR Challenges for
Norwegian Firms
Heather WhiteFounder and President, Verité
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Verité
Challenges in Overseas Contracting Relationships
• Arms length oversight• Little bargaining power• 3rd party ownership poses potential reputational
threat
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Verité
Role of Host Government - Uncertain
• Lack of government enforcement
• Presence may be antagonistic to workers' rights/protections
• May resent interference posed by outsiders’ codes
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Verité
Social Consequences of Global Outsourcing
• Persistent discussion of ‘living wage’
• Increase in prominence for ‘fair trade’ goods
• Companies argue the social benefit of job creation and economic activities
• Companies pondering MFA-end impacts
• Possibility of downward pressure on working conditions due to economic disruption
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Verité
Social Consequences of Global Outsourcing
• Companies at the forefront of CSR are engaging discussion of the social benefits of their production
• Responses to ‘anti-globalization’ forces require broad conceptualization of business’ role
• ‘Outsourcing’ debate has political importance
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Verité
Globalization and CSR
The literature shows systematic evidence of multinational
companies exposed by so-called anti-sweatshop campaigns being
subsequently punished by the market through sharp decreases in
share prices.
Responsibility Breeds Success, Development Outreach, Nigel Twose and Ziba Cranmer, World Bank
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Verité
On Wall Street, a Rise in Dismissals Over Ethics
New York TimesPublished: March 29, 2005
By LANDON THOMAS Jr.
“With regulatory scrutiny heightened, there has been a wave of firings as
corporations move to stop perceived breaches of ethics.”
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Verité
Groups Influencing Social Compliance
Consumers Media NGOs Labor Unions Students
Business partners Investors (owners) International
Organizations Church/religious
groups
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Verité
Globalization and CSR
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Verité
Standardization
Social Benefit
AccountabilityCollaboration
Worker Empowerment
Trends in Social Compliance: the Verité view
Transparency
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Verité
The Case for Worker Empowerment
• Stakeholders’ push for SC better informed workers
• Greater awareness sustained SC (or push from below)
• Use of area-based NGOs for sustainability
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Verité
The Case for Worker Empowerment
• Workers are sharing responsibility for social compliance (even pushing it and enabling it)
• Empowered workforce sustains the workplace develops community
• Healthy community averts economic displacements
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Verité
Movement Toward Standardization
• Factories with multiple buyers
• Licensees or agents serving multiple brands with same info
• Shared auditing• Cost reduction• Minimize audit ‘fatigue’
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Verité
Standardization of Expectations and Accountability
• Foundation of CoC is universal
– Respect for human rights– Int’l labor standards– Coming together of governments
- - Nafta, Asean, APEC, US-Jordan trade
• Cooperation bet. brands• Better info management • Access to information
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Verité
More Collaborative Initiatives Among Brands
• Standardization – Codes, tools, approaches– Industry wide initiatives
• Common production facilities common target audience
• Cost reduction• Minimize audit ‘fatigue’• Minimize learning ‘fatigue’• Better protection for the
brands
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Verité
Role of Transparency in Reporting
• Vendor performance assessed on facts, not only relationships
• Not just the product, but “HOW is it made?”
• Demand to know common violations; industry specific… Answers not only WHO (factory) but WHAT (standards, industry, etc.) and WHERE (geographic location)
• More segmented reporting - - includes country/regional performance
• Legal changes requiring social reporting
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Verité
Role of Transparency in Reporting
• CalPERS• Users have ability to
validate and disseminate reports
• Growing number of ‘learned’ workers
• Growing number of civil society organizations everywhere
• Governance concerns
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Verité
‘If we hadn’t included stakeholders in reviewing and
commenting on the report prior to its release, we would
have had a very different response.’
Dan Henkle, VP, Gap Inc.
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Verité
Standardization Greater influence in business & broader
role in societal development.
Social Benefit
AccountabilityCollaboration
Worker Empowerment
Global Social Compliance in 2010
Transparency
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Verité
Fast Forward …
Changing landscape of liability moving from legal to moral dimension
Liabilities are not only current timeline goes into the future and into the past
In 10 years, CSR will play broader role in how companies are doing business
And, CSR will need to be seen as contributing to social development, not simply insulating a brand
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Verité
Thank you!