Effective ethical sourcing: part 3
- timnicolle7
- May 29
- 4 min read
Updated: Jun 4
In a recent post we explained why an ineffective ethical sourcing policy can increase risk:
This is the final post in a three part series of posts on ethical sourcing and to make your policy effective.
This sets out the overall approach.
The four factors to consider in the design of policy and implementation.
And it covers the first factor in the list - "understanding the risks to workers".
The 2nd factor - what is reasonable for you to do to monitor the risks
The case for combining social audit with continuous worker voice
The four factors (repeated):
Factor 1: the risks that workers might experience harms
Factor 2: what is "reasonable" for you to do to monitor those risks
Factor 3: what do you do about harms that are detected
Factor 4: how you talk about what you are doing
This is the final part of the article, covering factors 3 and 4 from the list - what to do about harms that are detected and how to set out your policy credentials.
Factor three: What to do about harms that are detected
There will likely be an initial grading of suppliers which get refined as data comes in from the monitoring activities (social audit and continuous worker voice).
A typical operational framework might look like this:
Taking appropriate actions
When issues are detected, appropriate actions are required.
And then the human rights team or ethical sourcing team needs to be empowered by their own organisation to be able to take appropriate actions.
This is about budget and authority
What's alleged in the emerging court cases (eg: Dyson, Starbucks) is that the business was informed that workers were being harmed, but then ignored those warnings. This is a significant source of potential liability.
There are immediate actions that can be taken. There are "snapshot worker-voice" apps and surveys that can be used to communicate directly with workers via a detailed and tailored set of questions.
This enables a deeper dive on the issues is likely a good first step. These solutions have a high cost and high level of sophistication - but it is important to diagnose root causes and develop appropriate remedies.
Direct worker surveys have an important role.
See the above diagram - which shows (on the right hand side) where a direct worker survey should be used. This is when more detailed information is required to understand root cause, scale and effect and to design remedy and potentially calculate worker compensation.
For example, foreign migrant workers might be reporting that they have paid recruitment fees which have not been reimbursed; likely this would be against the ethical sourcing policy and it be potentially illegal and unreasonable. This would be an area where specialist advice can be required and where a deeper dive would make sense to establish a way forward perhaps based on a direct and specially-designed survey of affected workers.
Where do worker grievance mechanisms fit in?
Worker grievance mechanisms are much considered, but widely found to be poor value for money in terms of:
How much they cost to run
Whether they actually work in practice
This is a topic for another article. But the key point is that risks to workers are of two kinds:
Systemic risks that affect a cohort of workers
Individual risks that affect, maybe, one or several workers
Individual risks can stem from "bad individuals" that can be present in any organisation. But social audits and continuous worker voice platforms can miss these individual situations as the individual issues can get lost in the data.
For this reason, a well-functioning grievance channel is an important supplement to the other tools available and should be widely-deployed.
Factor Four - what should you say?
Coming back to the four elements involved in creating an ethical sourcing policy that reduces risks:
Factor 1: the risks that workers might experience harms
Factor 2: what is "reasonable" for you to monitor those risks
Factor 3: what do you do about harms that are detected
Factor 4: how you talk about what you are doing
As above, we have covered:
the idea that risks should be mapped and suppliers graded
what might be reasonable to do in order to monitor the risks, noting that relying on supplier self-certification and social audit alone is unwise
leading us to look at the role of continuous worker voice to supplement social audit - which looks like an effective combination.
Finally we have noted that there are roles for direct worker surveys when a deeper dive is required on specific concerns, and that functioning grievance channels are important to pick up individual issues.
So we get to the public statements that organisations make about their position on worker-treatment in supply chains. This is a key source of liability that must be managed very carefully - and this is another area where specialist advice could be very important.
No set of systems and procedures will monitor all the risks to a 100% certainty level. Any system of checks will always have some weaknesses somewhere.
But you should be explaining what you actually do, and defending that as being reasonable and effective given your business and the level of risks to workers that you perceive in your supply chains.
How does an effective ethical sourcing policy reduce risk?
When the four factors discussed above are coordinated and aligned, an organisation can show it has taken reasonable steps to detect and mitigate risks to workers in its locations and supply chains - and made public statements that are aligned with those steps.
Failing to coordinate the policy across these four steps can increase risk rather than reduce it.
These are really interesting topics - and we are keen to talk to human rights specialists, ethical sourcing teams, worker organisations, social auditors and consultancies.
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