EconomySustainability also encompasses the value chain

Sustainability also encompasses the value chain

(Expansion) – Fortunately, more and more companies are becoming aware of the impacts that their business models, their operations and their products and services generate on society and the environment, and consequently adopt various strategies, programs and initiatives corporate social responsibility or corporate sustainability.

However, this transformation is not an easy task due to the wide variety of topics that must be covered and the diversity of expectations that stakeholders may have; nor is it achieved overnight, since it must be mainstreamed throughout the organization, be part of its culture and be put into action through its day-to-day activities.

And as if that were not enough, not only should it cover the operations that the company directly controls, but those of its value chain should also be considered, since that is where the greatest risks, the most severe impacts or the best opportunities in terms of social responsibility.

How many companies have not faced serious reputational and even financial crises due to labor rights scandals, environmental issues or controversial situations that arose in some link of their value chain?

Given this, a challenge is presented for those companies that take their corporate sustainability seriously, since this will imply not only mapping their value chain (suppliers, distributors, dealers, business partners, etc.), but also carrying out processes of diagnosis or due diligence to be able to identify said risks, impacts and opportunities that could arise in the value chain, and from there act accordingly with various scopes.

Some companies decide to start by simply sharing a decalogue of principles or code of ethics with their value chain, or ask them to answer a simple questionnaire about their social, environmental and governance practices. From there, it could be possible to advance to the signing of some commitment or the inclusion of a clause in this regard within the corresponding contract, until arriving at evaluation, monitoring or auditing schemes in the matter, to ensure that they effectively comply with what was requested, or that for what they claim to do, have sufficient evidence to support it.

When the results of any member of its value chain are positive or a good score or level is achieved in terms of sustainability, it may be that the commercial relationship with the company is maintained or expanded; but on the contrary, with negative results or low scores, it could imply that certain conditions are established to continue with the commercial relationship, or even in some other cases, that it is limited or terminated.

Additionally, there are also companies that decide to support their value chain to advance jointly on these issues, being able to offer them some talks or formal training, as well as supplier development schemes, advice, support and even economic support or financing linked to their progress or commitments to sustainability, especially when within the value chain there are micro, small or medium-sized companies, for which all these aids can be the difference to trigger or promote their progress in terms of sustainability.

Undoubtedly, all of this requires a commitment from companies, but also an investment in their value chain, which, like any other, must be evaluated in terms of its financial return, but also in terms of the impact it may have on social and environmental terms, and to the very strengthening of the chain of which the company itself is a part and can benefit from it.

Therefore, today socially responsible companies must seek to have socially responsible value chains and make sustainability a common element throughout it, covering all its links or at least the most critical to ensure the sustainability of your business. , product or service to its various stakeholders.

Editor’s note: Jorge Reyes Iturbide is a specialist in corporate social responsibility and sustainable development and for 17 years has worked for various companies and national and international organizations on research projects, consulting, development of standards and executive education on the subject. He is currently Director of the Faculty of Social Responsibility and Director of the IDEARSE Center of the Universidad Anáhuac México. Follow him on and . The opinions published in this column belong exclusively to the author.

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