Corporate Social Responsibility and the Supply Chain
Shareholders, stakeholders, employees, and customers judge a business by the impact of its activities or services provided, and how they impact a community, the economy, and the environment overall. Corporate social responsibility, also known as CSR, is a term used to describe a company or institution’s efforts to improve society in different aspects. These efforts can range from donating money to nonprofits to implementing sustainable practices in the workplace. Implementing CSR as a business model has numerous benefits such as improving one’s reputation, driving a positive impact on the environment and communities, attracting more customers, increasing employee retention in a purpose-driven company, increasing capital growth, and building a resilient supply chain (Webber 2023). The supply chain is an integral part of most businesses and is essential to company success and customer satisfaction, so it is also important to consider whether all suppliers, all workers, and other companies in the supply chain implement CSR activities and practices.
Supply chain management deals with how businesses turn raw materials into finished products, including the transportation, warehousing, packaging, and distribution of those products to consumers. With increasing climate issues, suppliers take responsibility to not harm the environment, such as regulating their waste and gas emissions production while complying with governmental regulations and increasing their profits. Similarly, Green Supply Chain Management can be defined as reflecting a company’s consideration about environmental issues in all other supply chain processes (Tekin & al. 2015).
There are four different types of corporate social responsibility: environmental, ethical, philanthropic, and economic responsibility. A good way to start measuring corporate social sustainability is by looking at each step separately.
Environmental Responsibility in the Supply Chain
Environmental responsibility includes taking steps to minimize waste and pollution while also working towards a sustainable future for all. Companies can purchase and use recycled materials for packaging. It can also purchase technologies that produce less energy and waste than traditional ones. Another environmental factor is making sure the suppliers implement sustainable processes by setting standards that should be respected and implemented. Suppliers can also be trained on environmental protection to ensure they understand the importance of sustainability. In addition, having a team that can track the company’s environmental footprint to gather information can help the company plan better for its future.
Philanthropic Responsibility in the Supply Chain
Companies need to come up with goals to maximize their positive social impact. The supply chain does not only involve suppliers, vendors, or workers but also communities (Winter 2021). As a company, it is important to actively show support to global and local initiatives that address socially critical issues such as racism, education, equity, and affordable health care (or to nonprofit organizations that do) to strengthen the bond within the community where they operate. Also, supply chain management can support sustainable development projects in local areas but also offer scholarships to students studying majors related to sustainability or the supply chain that support the UN Sustainable Development Goals and help to enhance human rights. Another way to incorporate CSR into business practices is by volunteering time to nonprofit organizations, increasing employee engagement. Because work can be stressful, it is important to create experiences where people’s needs for accomplishment and personal interests are met with humanity’s needs; it helps to increase job satisfaction, bringing greater pride to one’s self and to the company.
Ethical Responsibility in the Supply Chain
To improve ethical responsibility, supply chains should ensure all suppliers or vendors conduct fair labor practices. Companies should build on treating everyone with dignity and respect and offer equal employment opportunities. Being ethical means to be fair, honest, and having morals; supply chain workers deserve to be heard and accepted in their workplace. In order to implement CSR in the supply chain, companies should emphasize having procedures in place to assure health and safe working conditions for their workers and suppliers. These include offering health and safety training to everyone, providing legal rights so they can speak up in case any injustice is observed. It also means having a team of experts who monitor any violation of the company’s code of conduct such as forced labor, child labor, unpaid overtime work, abuse, and sexual harassment within supply chain operations and act accordingly. In addition, the value of more diverse and inclusive corporate supply chains should be encouraged. Diversity and inclusion promote competition, innovation, and sometimes access to new global markets (Robinson 2021). It also means increasing the number of managers, suppliers, and recruiters from underrepresented communities in supply chain management.
Economic Responsibility in the Supply Chain
Economic responsibility involves making financial decisions while contributing to the environment and society. This can include committing to provide a fair and transparent salary to all employees or investing in renewable energy. It can also mean spending money for a positive long-term impact such as investing in educational programs or more sustainable suppliers.
Many consumers respond well to brands that are known to be environmentally friendly. Even though it is a collective battle, companies play an important role in encouraging sustainable initiatives, and there is still a need for improvement within CSR. With growing environmental concerns, more companies are searching for new practices to change their business model so they can show transparency with respect to the environment, their customers, and their employees.
Robinson, Rod. 2021. Why Diverse and Inclusive Supply Chains are needed and Three Tip to make it happen. Forbes. Accessed on April 1, 2023. https://www.forbes.com/sites/forbesbusinesscouncil/2021/08/06/why-diverse-and-inclusive-supply-chains-are-needed-and-three-tips-to-make-it-happen/?sh=549f31e960f1.
Tezin, E.K; Tozan, Ertuk and Tozan, Hakan. 2015. Corporate Social Responsibility in Supply Chains. INTECH. Applications of Contemporary Management Approaches in Supply Chains. Retrieved from https://www.intechopen.com/chapters/47883.
Webber, Ana.2023. 10 Business Benefits of Corporate Social Responsibility (CSR). TeamBondng. Retrieved from https://www.teambonding.com/10-business-benefits-of-corporate-social-responsibility/.
Winter, Ben. 2021. The 3 essential elements of supply chain sustainability. Fairmakit. Retrieved from https://www.fairmarkit.com/blog/the-3-essential-elements-of-supply-chain-sustainability#:~:text=What%20are%20the%203%20elements,three%20elements%20will%20sound%20familiar.