Revised OECD Guidelines to Mandate “Sustainable Supply Chain” Practices

May 26, 2011 EcoVadis

Just yesterday the OECD Guidelines for Multinational Enterprises, which provide recommendations for responsible business conduct in a global context, were updated for the fourth time since they were first adopted in 1976. Forty-two countries adopted the revision with the main addition “new recommendations regarding the violation of human rights and corporate responsibility throughout the chain supply”. It is the first inter-governmental agreement in this area.

It seems that the inclusion of sustainable supply chain practices was urgently driven by the issues regarding conflict mineral as in December 2010 the OECE published Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected Areas , but no doubt sustainability issues in global supply chain management have been mounting for some time. From the early 1990’s with Nike’s public exposure for operations in sweatshops, to the unexpected sustainable supply chain leadership of Wal-Mart, to today where there seem to be multiple initiatives for each industry and sector – Electronic Industry Citizenship Coalition, Sustainable Apparel Coalition, Pharmaceutical Supply Chain Initiative, Sustainable Packaging Coalition, and the list goes on.

For the OECD, the topic has gained further traction with pressure from John Ruggie, UN Special Representative on Business and Human Rights, who has been strongly endorsing social due diligence.

In the new OECD Guidelines under “General Policies”, enterprises are encouraged to:
Engage in or support, where appropriate, private or multi-stakeholder initiatives and social dialogue on responsible supply chain management while ensuring that these initiatives take due account of their social and economic effects on developing countries and of existing internationally recognised standards.
While the words themselves may be simple, the inclusion of the supply chain into the OECD Guidelines is evidence of the major shifts underway and yet to come. This is a signal to all corporations and companies that embracing sustainable supply chain practices is imperative in order to be considered a “responsible business”.

This article was written by Nicole Sherwin, a CSR Analyst at EcoVadis. You can follow her on twitter @NicSherwin

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