More and more, companies are being held responsible for the actions - or inaction - of their suppliers on a wide range of issues, from greenhouse-gas emissions to child and forced labor in manufacturing plants and on farms. Similarly, a broad cross-section of stakeholder groups, from governments to NGOs to investors, seeks information on how companies are tracking and measuring performance on these issues.
For example, California legislation
now requires companies to report on their activities to eliminate slavery and human trafficking from their supply chains. Inquiries by rankings and ratings organizations such as the Dow Jones Sustainability Indexes
seek to understand companies' efforts to address a range of human rights and environmental issues in their supply chains. In addition, the Global Reporting Initiative
(GRI) offers specific guidance for companies to report on human rights issues, and the latest version of the GRI Sustainability Reporting Guidelines seeks information on human rights risks among significant suppliers. The next iteration of the GRI guidelines, G4, will likely seek even greater and more specific disclosure on reporters' supply chain activities.
The trend toward greater demand for disclosure of supply chain performance means that companies must be prepared to not only understand and report on the activities of their supply chains, but also to take decisive measures to ensure that those activities are in line with company values and stakeholder expectations.