Start your responsible supply chain journey right with robust policies
25 julho 2024
Strong polices serve as a foundation for effective company action to protect forests, other natural ecosystems, and human rights.
Companies that produce or source agricultural or forestry commodities can benefit from establishing responsible supply chain policies. Yet some companies – even those seeking to operate responsibly – may be reluctant to set goals or policies.
This may be because they are still working to understand their supply chains and trace materials through them. Or because they are concerned about their ability to achieve commitments by a specified date.
Why companies should set policies
The AFi recommends that all companies, regardless of their positions in the supply chain, set strong responsible supply chain polices. These policies serve as a foundation for effective company action. For example, a company policy can:
- help ensure that the outcomes a company has set out to achieve are clear and comprehensive
- form the basis of effective communication of company expectations to business partners and suppliers, for example through procurement policies and supplier contracts
- support clear disclosure and assessment of progress towards goals
- articulate goals to investors and stakeholders, and support constructive and transparent engagement
Robust policies can also support companies as they prepare for existing and emerging regulations, such as the EU Deforestation Regulation.
What a policy should include
To align with the Accountability Framework, no-deforestation and no-conversion policies must include, at minimum:
- a clearly stated commitment to eliminating deforestation and/or conversion from supply chains and financial investments;
- definitions of key terms, such as no-deforestation;
- a specified cutoff date or dates after which time deforestation or conversion would render the material non-compliant; and
- a commitment to restoration or compensation when environmental harms have occurred.
Company policies to protect the internationally-recognised human rights of Indigenous Peoples, local communities, and workers should include at minimum a clearly-stated commitment to:
- respect internationally-recognised human rights;
- conduct business consistent with the UN Guiding Principles on Business and Human Rights (UNGPs) and OECD guidelines, including through implementation of human rights due diligence processes and remediation where harms have occurred;
- respect the rights of Indigenous Peoples and local communities, including the right to free, prior, and informed consent (FPIC);
- respect the rights of workers under the ILO fundamental conventions, as well as the right to a living wage and living income; and
- actively engage rightsholders and provide grievance mechanism(s) designed and adequately resourced to address harms to human rights.
Accountability Framework Core Principles 1 and 2 provide additional detail on the elements to include in company supply chain policies, which are applicable across supply chain actors, commodities, and geographies.
Because the Framework is based on international norms, good practices, and broad consensus, following this roadmap gives companies confidence that their actions will fulfil stakeholder expectations and set them up for success.
Other good practices from the Accountability Framework
In addition to including the elements listed above, companies should also specify the scope of their policies. The scope should be comprehensive, applying across all supplies that pose environmental or social risk, across all suppliers, and across all business units, at corporate group level. If a company policy does not cover this full scope, it should specify which are excluded and provide rationale.
Additionally, companies should develop time-bound plans against which progress can be measured and reported. Framework-aligned plans and policies can help companies demonstrate their progress through reporting and assessment platforms.
Further, policies and plans should be endorsed by senior company leadership and communicated to the company’s supplier base. This buy-in is essential for turning commitments into action and achieving the long-term protection of forests, natural ecosystems, and human rights.
Get started with the Accountability Framework
The AFi provides resources to support companies at the goal setting stage of their ethical supply chain journeys. As they begin, companies can look to the below guidance from the AFi.
Our web page for companies on setting or strengthening supply chain goals and policies describes the elements of Accountability Framework Core Principles 1-3 on protection of forests and other natural ecosystems, respect for human rights, and specification of commitments.
The AFi’s user guide on How To Write a Strong Ethical Supply Chain Policy explains how companies can apply the Accountability Framework to develop or update their polices. It also includes a sample company policy that companies may reference or adapt.
Our E-learning Platform module on goal setting details the essential elements to incorporate into a company policy. It emphasises the need for clear terms and definitions, a sufficiently broad scope to fully address risk, and an adequate level of detail to enable credible monitoring and reporting.