4. Implement Internally and Externally
Once the company has decided how to work on sustainability and has established a code of conduct, the latter should be implemented and monitored both internally and externally. One basic rule for achieving sustainable practices is that the company is transparent in its behaviour, and this transparency extends to its stakeholders.
The company's code of conduct needs to be communicated to employees so that they understand how it affects their day-to-day work. The code of conduct should be readily available and everyone must be aware of the consequences for the company and its employees if it is not followed. In certain cases, a written statement from employees may be required in which they promise to live up to the company's code of conduct.
Internal courses about the company's value base and its code of conduct should be held on a regular basis. By highlighting various dilemmas and discussing how the company has acted and should act in specific situations, employees become engaged and can readily apply the code to their daily work. The training should gather the employees together and be interactive so that the code is integrated into the corporate culture. If online training is the only option, a follow-up discussion or workshop is recommended. Also, ensure that collaboration between different departments takes place so that everyone benefits from the experiences and reflections of others.
A constructive way of encouraging employees is to include the company's sustainability goals in career development discussions. By setting individual, measurable goals related to the company's sustainability work, you anchor the strategy of the organisation, and then it is possible to follow up and reward individual efforts. One example of this could be an individual’s choice of mode of transport for business trips.
In order to ensure that sustainability work has an impact throughout the organisation and that employees and management both work towards achieving the goals set, the company should implement a control function, i.e. a structured system for internal audits, where employees are advised to report inconsistencies or violations.
Depending on the size of the company, it may also be advantageous to have a whistle-blower function. There may be situations where employees cannot or do not want to report violations to their immediate boss. The Swedish capacity for transparency and acceptance of criticism is also quite unique from an international perspective. In many foreign markets this is not the case, and a function allowing employees to report anonymously or secretly can be a viable alternative. The whistle-blower function can also be used by external parties who detect violations within the company.
Wherever such a function is implemented, the company must have clear guidelines regarding the privacy and protection of the whistle-blower. In 2017, a new law came into force providing special protection for workers facing reprisals for registering complaints about serious misconduct. The Act was passed to provide protection for such workers when they sound the alarm about violations in their employer’s business. More information about the law can be found in the Swedish Constitution, 2016:749 (in Swedish).
Implement throughout the supply chain
To be successful in your sustainability efforts, it is important that they encompass and permeate the entire value chain, including suppliers and subcontractors. These businesses are often situated in countries far away and, for this reason, it can be difficult to control how they operate. It is therefore important, at the beginning of your partnerships, that suppliers understand the company's policy, the expectations placed on them and the reasons why.
The implementation process is continuous and sustainability issues should be a natural part of collaborations with external stakeholders. Below are examples of how the company can implement its sustainability programme with suppliers and thereby increase the chances of a sustainable supply chain:
Conduct due diligence
When selecting a supplier, it is important that you carry out ‘due diligence’ – a thorough inspection of potential partners and evaluating their credibility. By doing this you will be able to identify sustainability risks – both the risks inherent in the country as well as risks posed specifically by the potential supplier. If you do not possess the skills internally, you can make use of an external consultant, either one who works locally in that market or a consultant based in Sweden. Business Swedencan help you get in touch with these experts.
Make sure that sustainability criteria are included in agreements
When you draw up an agreement with your supplier, it is important that all essential sustainability conditions are included in the written agreement and that the supplier understands what their implications are. If you want your supplier to fully adhere to your company’s code of conduct, then this should be a part of the agreement.
The agreement should also contain information on how you intend to check that the supplier fulfils its commitments and what actions you might take if the supplier fails to live up to them. In addition, the agreement should contain conditions regarding the supplier’s obligations in terms of it checking any subcontractors in the same way.
Train the supplier
Should the supplier lack experience and knowledge, you need to provide training and information as to why sustainability issues are important as well as what is applicable by law and international conventions and guidelines.
Maintain close dialogue
The best way to succeed in the long term with sustainability in the supply chain is to work together and maintain close dialogue with your business partners. By educating and sharing each other’s problems and experiences, you can jointly develop and improve procedures and guidelines.
In many cultures, such as those of China and India, there may be a reluctance to make one’s feelings and opinions public and to discuss problem areas. To drive change, it is important to communicate that sustainability is a common process of change, and that you prefer to know about any problems that might exist rather than be unaware of them.
Limited influence over suppliers
If yours is a small company with limited influence, it may be difficult to get suppliers to change routines according to international guidelines. In such cases, a working strategy may be to collaborate with other companies using the same supplier and get help from a range of organisations and NGOs to increase your influence over regional decision-makers and industry clusters.
NGOs often work as a bridge between civil society and government agencies. They often have more expertise in local conditions than the authorities, are significantly better at providing information and can be a constructive partner to gain support from regarding sustainability challenges. Examples of typical organisations in each of the respective areas can be found at these links: human rights, working conditions, anti-corruption and the environment.
Monitor the supply chain
In order to guarantee that suppliers live up to your requirements and expectations, they need to be regularly monitored. This can be done in various ways and the extent to which monitoring is needed may vary depending on your need to ensure that violations are not occurring. Below are examples of different ways to monitor suppliers:
Ask the supplier to carry out a self-assessment of its sustainability work. The risk of self-assessment is that it may not always reflect reality. One example of a self-assessment tool aimed at companies is The Global Compact Self-Assessment Tool.
You can make a visit – a so-called audit – to the supplier, yourself or through an external party. Checks should be carried out under structured conditions and performed by experienced people. Business Sweden’s local offices can, in some cases, help your company to find a local recommended auditor. The audit may include employees’ ages, their working conditions, the work environment and safety etc. If inconsistencies are found, the company must have a plan of action to deal with such situations. Read more in Step 5.
You, as an external party, can make unannounced visits to suppliers, provided you have permission to do so. The benefits are, hopefully, that the supplier has not been able to carry out any ‘cosmetic adjustments’ immediately prior to the visit, such as temporary security solutions. If violations are revealed, the company must have a plan of action to deal with the situation. Read more in Step 5.