Last week the UN Global Compact announced the launch of the “Supply Chain Sustainability” which will focus on helping companies implement the Global Compact principles in their supply chain. The initiative will be officially launched in New York in June during the UN Global Compact Leaders Summit 2010 held in New York.
Deploying Global Compact principles in the Supply Chain has been an objective of many GC signatories for years. One of the 1st and most innovative, was the target set by Schneider Electric in 2005 to have 60% of its purchases made with GC signatories. This was an ambitious goal, and even though the initiative conducted many Schneider Electric suppliers to endorse GC principle (at the end of 2009, 1153 Schneider Electric suppliers were GC signatories) this only represented 33% of spend or half of the initial target.
In the absence of verification of performance by Global Compact, this also raise the question on the reality of performance by smaller suppliers, who might be tempted to endorse Global Compact to maintain the relationship with a large buyer. It seems that Global Compact is realizing this, as in February they announced delisting 859 companies (this is more than 15% of the total database of 5300 participants) for failing to deliver on the minimum commitment required (ie: self reporting on some of the progress of their CSR practices once every 2 years).
The new initiative launched by Global Compact should help bridge this gap, and it was very interesting to see that, contrary to many Sustainable Supply Chain initiative, this one is driven by a working group, comprised of Purchasing Executives of all industries: ArcelorMittal, Cemex, Volkswagen, UBS, Nestlé, Unilever, Hitachi, Hyundai, Nokia,…
We wish good luck to this very exciting initiative!