Labour rights the 'next big challenge' for corporates, says M&S
Corporate and Social Responsibility (CSR) has moved beyond dealing with ethical trade as a singularity to encompass human rights movements and modern slavery issues, and it should now be a core strategy for businesses.
That is the view of retailer Marks & Spencer’s (M&S) head of responsible sourcing and packaging Louise Nicholls, who claimed that businesses needed to be acutely aware of human rights issues within supply chains in a “hyper-transparent world”.
Speaking at a Sustainable Supply Chains conference hosted by the Food and Drink Federation (FDF) in London on Wednesday (23 November), Nicholls said: “The next big challenge we’ve got is that the world of labour rights is changing. It’s no longer about ethical trade which is a risk to business, but rather a risk to rights holders and we need to set up our business to understand what that looks like.
“It’s about how well you understand those risks in the extended supply chain in what is a much more hyper-transparent world. We are now in a very different space and it’s much more open, to the point where you need to be talking about what you’re doing to address these issues, and how well you’re doing your due diligence.”
Nicholls alluded to the Modern Slavery Act as one area where UK businesses will need to look at, in order to mitigate risks in the supply chain. Introduced in October 2015, the Act requires all businesses with an annual turnover of £36m or more to produce statements on how they are addressing modern slavery in the supply chain.
In July of this year, UK Prime Minister Theresa May announced additional measures to assist with the Act’s implementation, including the creation of a dedicated task force to coordinate Government action, and a budget of £33.5m. However, as sustainability consultant Louise Russel highlighted in a recent edie blog post, fewer than half of companies are currently meeting the minimum legal requirements under the Act.
Acting as a global company with more than 82,000 employees across 59 territories, M&S will have to pay close attention to the Act, and has already taken steps to enhance supply chain mapping to provide ethical data. Currently, all of M&S’s suppliers are obligated under contract to comply with a ‘Global Sourcing Principle’, which aligns the retailer’s frameworks to cater to International Labour Office (ILO) core labour standards.
M&S also has a strong track-record when it comes to supplier auditing. A company report released in June showed that it had conducted 1246 audits last year, raising 7,256 non-compliance concerns directly with the suppliers. Last month, M&S aclaimed top spot amongst FTSE 100 firms by the Business and Human Rights Resource Centre for the proactive monitoring of and reporting on modern slavery in supply chains.
Panorama and Rana Plaza
However, the company has been burnt by supply chain complexity in regards to human rights before. A recent BBC Panorama investigation named the retailer alongside the likes of Next and ASOS, accusing the firms of contracting third-party suppliers in Turkey that are using children and Syrian refugees as cheap labour alternatives to make clothes.
At the time, a company spokesperson told edie that M&S was “disappointed” with the findings and despite finding no evidence themselves, offered to work with the suppliers to take “remedial action”. The fallout from the investigation is still ongoing, but M&S’s work with the Bangladesh Accord suggests that the company takes the “remedial action” approach seriously.
In April 2013, more than 1,138 people - many of which women and children – died during the collapse of Rana Plaza in Bangladesh. Three weeks had passed when a five-year, legally-binding agreement between global brands, retailers and trade unions was drawn up and signed in a concerted effort to create a safer and more secure garment industry.
M&S is one of the signatories to the Accord, and for Nicholls this collaborative approach will be essential in driving change for businesses that are attempting to deal with emerging global challenges such as labour and human rights.
“Collaboration is absolutely vital,” Nicholls adds. “If you want to drive systemic change then this is a collaboration advocacy. We could just be doing little pilot projects on our own, but you can deliver much bigger results when you work together.
“It is absolutely vital that it aligns to your core business strategy though. It can’t be an add-on and it must be at the heart of what you do.”
M&S was among the 71 companies studied by the Ethical Trading Initiative (ETI) and Hult International Business School. Analysis of the companies revealed that while virtually every company understands the reputational risk of finding modern slavery in the supply chain, most are reportedly struggling to meet the demands. One of the key tensions for companies, the report found, is how best and how long to collaborate with suppliers to improve working conditions.