Ian Nicholson, of Responsible Solutions, on a new ethical design guide for an industry seeking more sustainable procurement.
Ian Nicholson
Recent media coverage of the UK steel industry and its tightening of procurement procedure highlights a wider issue that is rapidly rising up the agenda for the construction sector: do you know exactly where your products and materials are coming from?
To tackle the problem of contractors only considering lowest price in their procurement practices, the government has issued a set of guidelines to reduce the influx of “cheaper” imports from countries such as China and deliver a timely boost to the UK steel industry. The guidelines apply to large projects with a capital value of £10m or above.
From a social perspective, there are a number of questions contractors should be asking. Are my suppliers compliant with relevant health and safety legislation? Do they place a value on their local community and hire apprentices? Are they taking steps to ensure modern slavery does not exist in their organisation?
There are also environmental concerns, such as energy use, transport-related emissions and focus on of waste minimisation and recycling.
Having a better understanding of your suppliers can carry other positive implications. Strong working supplier relationships can increase stability, consistency and security of supply, and highlight to customers that you are committed to ethical sourcing – potentially avoiding damaging exposés of unethical work practices.
Perhaps the most important point to take home is that none of this can happen unless there is a level of transparency in your supply chain. You can’t even begin to consider ethical issues without first knowing the source of your materials, products, and services.
"There are a number of questions contractors should be asking. Are my suppliers compliant with relevant health and safety legislation? Do they place a value on their local community and hire apprentices? Are they taking steps to ensure modern slavery does not exist in their organisation?"
Of course, these values have a much wider scope than the steel industry. Delving into supply chains can be a challenging and time-consuming process, and unfortunately, the “out of sight, out of mind” approach is adopted far too often.
One development that will help procurement professionals in the industry is the publication of a new ethical design guide and an online Ethical Sourcing Risk Profile Tool at the Greenbuild Expo in Manchester today (10 November).
These are being launched by the “AESOP” project – An Ethical and Social responsibility Portfolio for construction professionals. AESOP is funded by the EPSRC (Engineering and Physical Sciences Research Council) and is run by corporate responsibility consultant Responsible Solutions and Loughborough University.
Ethical Sourcing: A Designer’s Guide will inform designers and specifiers on ethical sourcing issues such as recognising product-specific and organisational certifications, and understanding supply chain problems, including modern slavery and conflict minerals. This will mean that ethical sourcing considerations are embedded within a project from the very early stages.
The online Ethical Sourcing Risk Profile tool will provide an important resource for organisations to carry out a simple risk assessment of ethics in their supply chain, covering questions such as “Where do the products and services you use typically come from?”
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This will provide an overall risk score for different areas of the supply chain, informing you on which issues are most important to your organisation in terms of ethical risk and transparency.
The steel industry headlines and associated government procurement guidelines represent an important step in the right direction in terms of raising the profile of the wider issues of supply chain transparency and ethical sourcing. However, why should steel be singled out when such transparency and sourcing issues are just as prevalent within other sectors? There is still more progress to be made.
In short, you cannot just pick and choose which materials you source ethically. One-off policies are potentially a recipe for confusion and conflict. What is required is a strategic approach to supply chain risk that is based on clear and consistent values.
The good news is that the tools you need to put such a policy into practice are now on the market. I wouldn’t say ethics just got easy, but “doing the right thing” might not be as hard as you think!
Ian Nicholson is managing director of Responsible Solutions
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