In my daily work as a sustainability consultant, I speak to clients and potential clients about doing business with respect for people and the planet. In these conversations, I emphasize why sustainability should be an essential part of business decisions. We discuss key risks and how to overcome them. We talk about engaging internal and external stakeholders to make change happen. In short: we make sure clients see how and why they should bring sustainability to the core of their business.
During some of these conversations, however, the discussion takes another direction. My counterparts come with ‘Good Reasons’ why they should, in fact, not act sustainably. In this article, I decided to summarize my top-five of these Good Reasons. Enjoy the ride.
Good Reason #1: We are only a small buyer
This argument is, interestingly, most often made by the largest of multinationals – arguing that they are in fact only a small buyer of a certain product or ingredient, and constitute a small part of a suppliers’ clientele. Meaning: who are we to ask our supplier to work on reducing their environmental harm, or to ask them to share their human rights issues with us? They won’t even listen to us. Interestingly, SMEs and not-so-huge-corporations rarely use this argument. Somehow, it is as if they understand that no matter how small your volumes are, you still have a role to play in changing your value chain for the better: you decide what suppliers you work with, for one thing, and what you source from them. And if your company does not clarify what it is you think ‘doing business’ or even fair business entails – then how can you expect more transparency, or even change, in your value chain?
Good Reason #2: The issues are too big
We cannot possibly influence the big issues by ourselves. They are difficult, span across industries, weave in with other root causes, and are just overall complex. Other actors in the sector also use this Good Reason not to engage on certain big issues, so our company does not need to stick out our necks – we will not be the first to move. This is a particularly Good Reason when we are talking about problems that are not just related to one value chain but are a regional or even international challenge – such as forced labour and crimes against humanity in Xinjiang, China. An additional layer to employing this Good Reason is that the issue is often not only too big – it is also too tricky, since companies can be quite dependent on a certain region or supplier for one or several of their products. Moving to another product, another supplier, or even deciding to change the product portfolio are difficult and costly business decisions, that we rather avoid. Luckily, we can always start another multi-stakeholder business initiative, to talk more about how we can accomplish something – in the meantime, accomplishing nothing.
Good Reason #3: We should respect cultural differences
In some countries, child labour might be necessary for families to earn a living wage – so, who are we to tell our suppliers not to employ children? (Not joking, this argument was recently made, again, and seriously defended). The ‘cultural differences’ argument also holds for things like living wage (people in India just need less to get by, it is a very different culture there), working hours (if the workers in Thailand do not work 12 or 14 hour shifts with us, they will quit and work in another factory – that is just their culture), and other issues. The great thing about this Good Reason is that it releases you from the responsibility to even figure out the root cause of an issue – it is Cultural, therefore we will leave it as it is.
The point, of course, is that just because something is ‘cultural’, does not make it right. In some cultures, it is accepted to stone women to death because they have allegedly committed adultery. That does not mean that it is OK – or that your company simply has to move on with ‘business as usual’ if human rights violations that are ‘cultural’ occur in your value chains. Luckily, there are these things called international norms, such as ILO conventions, the Universal Declaration of Human Rights and human rights instruments, that have been designed, approved, implemented by countries from all over the world. We do not have to depend on our own interpretation of what is right or wrong, or on ‘cultural differences’, to make clear what kind of behaviour we accept. We have international norms and guidelines – use them.
Good Reason #4: Our suppliers are the ones who need to change
This Good Reason goes something like this: ‘We are not exactly sure where the issues lie, and really, we think our suppliers should ensure proper wages are paid, no overtime takes place, and generally ensure sustainability risks are managed. The fact that our purchasing practices, business demands and/or consumption-based business model may be at the root of some or all of these problems, is really not up for discussion.’ A good solution to this conundrum is to increase demands on your suppliers through checklists, audits, and spot checks. This way, you further move the burden of managing sustainability risks to already overburdened and under-capacitated suppliers in developing countries. Without compensating them for the additional effort, of course – business is business, we are not a charity!
The uncomfortable truth is that it is exactly this behaviour that is leading to – or at least, exacerbating – sustainability risks in our value chains in the first place. Changing your own buying practices, contract management and building long-term relationships with suppliers has more promising effects on workers in your value chain than checking your supplier again, and again.
Good Reason #5: Our value chain is too complicated
This is a very Good Reason not to manage sustainability risks. After all, if we don’t know that there are any issues, we also do not need to act on them (again, a statement I heard recently). The fact is, of course, that supply chains are not complicated by necessity, but by design. A great way to keep a hold of this Good Reason is to ensure your supply chains are and stay increasingly complex. Top tip: regularly change suppliers, so you do not build long-term relationships but rather have price-based negotiations that make it easier to replace one supplier with another. Also, work with traders where you can – it is in their interest and business model to keep their cards close to their chest, when it comes to disclosing where they source from. This helps to keep your value chain opaque and to use this Good Reason whenever a question comes up.
Alternatively, you could make conscious buying decisions that build stronger relationships with a selected group of dedicated suppliers, so you do not constantly need to switch. You could also change the way your company rewards buyers: including elements that go beyond the lowest price, but instead contribute to a healthier, shorter, stronger supply chain. You could ensure transparency by starting with trust. You could ensure trust by being vulnerable, open, and honest. You could – oh well. Give me a call if you want to talk about it.
As with everything else in this life that truly matters (raising a child, being a good partner to your spouse), doing business sustainably is not easy. It takes effort, patience, and openness. It is tough. You mess up, you get confronted with the impacts of your behaviour, you apologize and work to set things right together with those that are affected. And just like your spouse will not accept you hiding behind Good Reasons why you did not come home last night, neither are the five Good Reasons in this article acceptable arguments when you do business without considering sustainability.
Anne Manschot, senior sustainability consultant at Enact Sustainable Strategies. She supports clients in their due diligence journey and has specific expertise on business and human rights. She regularly writes opinion pieces.