What's Happening?
A recent study by the World Resources Institute (WRI) has revealed that only 3% of the world's largest companies have set goals to improve working conditions or invest in worker skills within their supply chains. The report, titled 'Elephant in the boardroom: People are missing in corporate supply chain goals,' analyzed over 1,000 commitments from nearly 700 multinational corporations. It found that while climate and nature have become central to corporate sustainability strategies, workers and small suppliers remain largely overlooked. Only 12% of the companies examined had at least one people-focused goal, with most stopping short of addressing basic issues such as safety, fair pay, or training. The study highlights a sharp imbalance, noting that 80 to 90% of many companies' environmental impacts are tied to their suppliers, yet most supply chain goals treat sustainability as a one-sided mandate.
Why It's Important?
The findings of the WRI study underscore a significant gap in corporate sustainability strategies, where the human element is often neglected. This oversight not only risks worsening conditions for workers but also jeopardizes companies' own sustainability targets. Cleaner, more resilient supply chains are unlikely without recognizing and supporting the needs of the people who make them run. The study suggests that a partnership approach, where companies collaborate with suppliers to co-design solutions, could shift the focus from compliance to mutual value. Such measures would not only improve worker well-being but also strengthen the reliability of supply chains under mounting economic and environmental pressures. By ignoring the human side of sustainability, companies may be overlooking a critical factor that could determine whether their broader environmental goals succeed or fail.
What's Next?
The report calls for a shift in corporate strategies to include more people-centered supply chain goals. Examples of such goals could include offering workplace safety training, providing proper protective equipment, and ensuring fair pay and stable schedules. The WRI argues that these measures would not only improve worker well-being but also strengthen the reliability of supply chains. Companies are encouraged to adopt a collaborative model with suppliers to co-design solutions, which could help suppliers finance upgrades, invest in training, and build long-term resilience. This approach could potentially lead to more sustainable and equitable supply chains, benefiting both companies and their workers.
Beyond the Headlines
The study points to a missed opportunity for companies to enhance their reputations and achieve their sustainability targets by focusing on the human element of their supply chains. By adopting a more inclusive approach, companies can not only improve worker conditions but also create more resilient and reliable supply chains. This shift could lead to long-term benefits for both companies and their suppliers, fostering a more sustainable and equitable business environment.
