There is disagreement between those who argue that companies should be able to control their entire value chain and those who argue that businesses can extend leverage over direct contracts only – the so-called tier-1 level. At the same time, there is a heated debate on whether companies should be held accountable not only for social but also environmental impacts. What is your perspective on the possible scope and leverage of responsibility?
As we talk about leverage it’s important to distinguish between own brand suppliers and manufacturers of branded goods. In the current political climate this apparently small but important distinction is flying under the radar. Our Code of Conduct targets all of our business partners, but leverage with our own brand suppliers is much higher. With that in mind, indeed the first step is to ensure that all our Tier 1 suppliers and producers of own brand products are compliant with our stringent due diligence requirements. But our aim is to go further and assess all suppliers throughout our value chain in due time.
And to your question about environmental standards: of course, these aspects need to be managed just as thoroughly. I am doubtful whether it makes sense to address this together with human rights due diligence. It makes sense to move step-by-step instead of overworking a piece of legislation.
Veronika, the European Commission argues that companies do not sufficiently consider adverse impacts of their business activities, and that therefore, human rights due diligence should be mandatory. What is your reaction to that opinion and is a legislative framework the right way to incentivize companies?
In the last 10 years, we have seen many voluntary commitments from various businesses, mostly multinational companies. All business activities – both big and small – have an impact on the environment and on society. A framework requiring all businesses to conduct their activities responsibly is an important step to create a level playing field.
The pandemic dominated the global agenda for the last 12 months. The Covid-19 crisis exposed the vulnerabilities in global value chains and the precarity of global business operations once more – and the weakness of voluntary corporate action in addressing these issues. Millions of workers and communities around the world feel the consequences. In this context it is difficult to progress with the human rights agenda when whole sectors are affected, jobs are vanishing, and workers are ready to go the extra mile to maintain their livelihood.
There are signs this could change. A good way forward is a smart mix of voluntary and mandatory measures, that will allow businesses to transform and avoid serious violations or harm to human rights and fundamental freedoms. In this era of rapid globalization and increasingly complex supply chains we must look deeper and further into the practices of our value chains. And improve where we do not have enough understanding and transparency.
What are your thoughts on about voluntary initiatives and commitments? Are they enough to achieve change on the ground and to incentivize companies to better protect human rights in their value chains?
Unfortunately, reality proves that we do not have the formula to eradicate or prevent human rights violations. Hence, voluntary, or not: we have not done enough.
For example: METRO is a founding member of amfori BSCI and actively cooperating with SEDEX. These are two organizations that actively help us build a safer and fairer value chain. We work on every pillar of a solid due diligence process, we encourage stakeholder’s transparency and we communicate about impact. Audits play an important, but limited part. They take just a snapshot of reality in a factory.
METRO is also part of the Consumer Good Forum’s Human Rights Coalition of action working to end forced labor. We cooperate with other companies from our industry – who share the same values and passion for change. The Coalition members are committed to the establishment of human rights due diligence and to acting upon findings in their own operations and value chains. I am confident that this platform will help us find practical approaches and to accelerate implementation.
These voluntary commitments are a valuable way to make progress. But they are not universally valid for all. They can´t replace a regulatory framework.