Corporate Citizenship Starts With the Supply Chain
In recent years, a noticeable paradigm shift has taken place in the business world. Driven by the realization that business and society can no longer intersect at the crossroads of profits first and society second, business is adopting a new order that puts the interests of society on a level that is at par with the interests of business. This has prompted a closer look at the supply chain and an increased emphasis on sustainable sourcing.
The outcomes of this convergence of interests include more opportunities for impoverished people around the world, increased protection for the environment, and, yes, paradoxical as it may seem, no decline in corporate profits for companies at the forefront of this shift in thinking.
In short, companies are aggressively embracing the philosophy of corporate citizenship, which means taking responsibility for protecting the environment, reducing inequality, and bringing about social justice through supply chain practices and beyond.
This policy of no dichotomy between business results and corporate citizenship is today the bedrock of some of the most successful companies and operates prominently in the areas of environmental policy, product safety, human rights, the management of chemicals in consumer products, conflict minerals, and code of conduct for manufacturers.
Emphasizing such a broad spectrum of areas is in keeping with the vision of many companies that the old model is neither desirable nor sustainable. Today, consumers' decisions to buy products are linked to questions about where and how products are developed and produced.
Businesses can no longer afford to ignore consumer interest in ethical dimensions such as fair labor practices, supply chain diversity, and sustainable sourcing.
At first glance, corporate citizenship activities might appear to work against corporate profits as significant costs are usually associated with its policies and programs. Deep analysis, however, tells a different story: Business can be conducted profitably without sacrificing core human values such as safe working conditions and decent wages.
Human well-being and prosperity depend a great deal on the free flow and movement of capital, goods, people, and technologies. Investment in product development creates jobs and provides purchasing power. Purchasing power, in turn, ensures that companies can produce more of the same products and develop new ones, furthering their profit margins as well as bolstering their economic base. A vibrant economy expands the tax base, making it possible to build and maintain public infrastructure.
Deriving Global Benefits
Multinational corporations must strive to take advantage of the opportunities inherent in today's global economy, including moving manufacturing operations to geographical locations where labor is cheap, ensuring bottom line benefits as well as creating jobs in areas that would otherwise have been economically depressed. Millions of people have been lifted out of poverty as a result.
But globalization has not benefited everyone. Hundreds of millions still suffer inequality and other forms of economic injustice.
Fortunately, some companies have pursued sound business results with the welfare of human beings and the environment in mind. More should do the same, starting by closely examining their supply chains.