What’s Next for Responsible Sourcing

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By Guest Writer: Mark Evans, Omega Compliance

The topic of ‘audit fatigue’ has been around for almost as long as the responsible sourcing profession itself.  When high-profile exposés in the 1990s revealed human rights abuses in the apparel and footwear supply chain, brands saw factory audits as part of the solution. However, the industry’s response was largely uncoordinated, resulting in a multitude of codes of conduct, each requiring its own version of supplier audits. As a result, factories became inundated with audits and ‘audit fatigue’ set in among workers and suppliers.

For the last 20 years, brands and retailers in the U.S. have tried to address the fatigue issue by reducing the number of audits. Recognizing that 90% of brand requirements were the same, the industry embarked on numerous harmonization initiatives, such as the GSCP, with the objective of consolidating around a single audit tool. Not only could this address fatigue, it could also allow the industry to turn its attention to other important initiatives like capacity building and worker wellbeing.

Despite these bold attempts at harmonization, it became clear that while brand requirements were similar, they were also completely distinct. The 10% difference was unbridgeable, reflective of the different values of the separate organizations. The industry in the U.S. turned its focus elsewhere.

However, recently renewed efforts to solve audit duplication, coupled with fresh thinking, has revealed there is light at the end of the tunnel and a glimpse of a changing, more dynamic responsible sourcing landscape. In 2015, the Social & Labor Convergence Program (SLCP) was launched with the support of more than 200 signatory brands including adidas, Gap, Nike, VF Corp PVH, and Target. Rather than reattempting to harmonize standards, the SLCP’s mission was to create a converged assessment, performed by qualified verifying bodies, like Omega.

The dataset collected would be broad enough to enable benchmarking against each brand’s proprietary standard.

The SLCP has made considerable progress. A significant number of its high-profile signatories, acting as force multipliers, have recently committed to replacing their own proprietary audits with the SLCP assessment.

Furthermore, a growing number of brands and retailers, including Walmart, which have sourcing footprints beyond apparel, are accepting a broad range of accredited audits, such as Sedex, WRAP and Amfori, rather than requiring their own.  The landscape seems to be finally shifting towards fewer, but higher quality, responsible sourcing audits. In addition, the audits are underpinned by a pool of auditors certified by the Association of Professional Social Compliance Auditors (APSCA), another recent industry milestone.

So what’s next?

Presuming the consolidation of responsible sourcing audits continues, brands and retailers will have newly available resources. They should choose to reinvest their savings into other parts of the industry in need. But the question remains, will brands and retailers move from monitoring to collaborative efforts or will they double down on other tiers of their supply chain?

Below are some key areas in need of more focused resources:

  • Improving the conditions under which homeworkers are employed across their supply chains. After agriculture, the homeworking economy is the largest employer of women in the developing world. Given how prevalent piece rate compensation is in this sector, there are real challenges with payment of minimum wage, for example.
  • More specialized responsible sourcing audits, under the IRIS standard, of labor brokers.
  • Worker dialogue programs, such as WOVO, which provide workers with greater representation and agency within their supply chains.
  • Greater supply chain traceability. As an example, growing concerns of forced labor in Xinjiang has recently prompted Cotton On to ban the sourcing of cotton from the region, where an estimated 80% of China’s cotton is produced. This issue is likely to grow in prominence as pressure is put on the U.S. Congress to intervene. In fact, Omega has recently built a cotton traceability assessment, performed upon both factories and mills, enabling brands and retailers to understand where their cotton inputs originate.

The opinions expressed in this article are those of the author and may not reflect the position of her/his employer.