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Minimizing Risk Through Proper Supply Chain Management

Updated: Nov 2, 2018

The CSR Group's president, Paula Ivey, was featured in The Wall Street Journal after she spoke at a conference New York.


Wall Street Journal

Risk management and reputation concerns are the two top issues driving increased corporate social responsibility in supply chains, an executive who advises companies on corporate social responsibility said at a conference Wednesday in New York.

The risks from supply chain problems—encompassing everything from environmental footprint and conflict minerals use to human rights issues and labor conditions—are exacerbated by a gap in perception between what companies know is happening and what consumers think is happening, and by the explosion of social media and its impact on reputation and brand, Paula Ivey, president of The CSR Group, said Wednesday.

These factors have propelled risk management and reputation protection to become the main drivers of change in supply chain management, Ms. Ivey said at the Commit Forum conference. “Risk management is probably the number one defense by companies for properly managing corporate social responsibility,” she said, as there are “billions at stake” in protecting reputations and brands. Employing a proactive approach to a company’s corporate social responsibility program by employing best practices and transparency of the supply chain are the best ways to bridge that perception gap. “That’s where I think we’re headed, to filling that gap,” she said.

Supply chain changes are not just being driven by non-government organizations and activists, as many people believe, but also by consumers who want to know where their products are coming from and what is being used to make them, and by governments that are issuing a wider array of regulations to govern how companies behave when it comes to reporting on their supply chains, Ms. Ivey said. On a positive note, she said more companies are becoming proactive in this area. “I believe we’ve gone past the tipping point to where we’re really proactively managing it,” she said.

From Dodd-Frank’s provisions covering conflict minerals reporting, to a California law requiring companies with more than $100 million in sales to report on their efforts to rid their supply chains of slave labor and human trafficking, to efforts in Europe to regulate use of hazardous substances in electronics, Ms. Ivey said governments are becoming more aggressive in making sure companies toe the proper line when it comes to responsible supply chain management. Companies are realizing on their own also that there are bottom-line benefits to improving their supply chains, from labor productivity gains to reduced costs and improved relations with workers.

“Corporate social responsibility is driving consumers, who are driving retailers, who are driving the brands,” Ms. Ivey said. “CSR is going mainstream. Uptake is happening rapidly.”

Click here to view the article on The Wall Street Journal website.


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