I am on my way to an expert meeting on SME's and UN Guiding Principles on Business and Human Rights (UNGP) convened by the European Commission. Reading the draft guide and its draft policy recommendations it strikes me that I am struggling to discover what is new. Well, that's not completely true. The UNGP are new in the sense that the three pillars provide a well-founded, globally accepted framework for describing key aspects of business and human rights. The recent EU communication is also fairly up to date in that it points to the importance of engaging with stakeholders, assessing the risks of human rights abuses and it challenges companies to do something about it.
I cannot, however, resist the temptation to conclude that the draft guide and policy recommendations have a stunning resemblance to what the Norwegian, Danish and UK ethical trading initiatives (and our member organizations) have been doing for over a decade now. Namely, commit to ethical principles based on ILO and UN conventions, map the risk of breaches in the supply chain, assess own business practice, engage with suppliers on improvement actions and communicate progress to key stakeholders.
Our focus is of course limited to the supply chain, and we are the first to acknowledge that there is still a long way to go, including amongst our membership base. We are also the first to admit that there is room for improving our understanding, our methodologies and the tools we employ to meet our objectives, not to mention unidentified synergies that can further leverage our collective efforts to result in sustainable impact throughout global supply chains.
From this perspective, and struggling to resist the temptation of inserting a humbling "it's about time" between the lines, I warmly welcome the EU's renewed take on not only challenging but also enabling SMEs to meet their role as responsible businesses.
As far as IEH: Ethical Trading Initiative Norway is concerned, the majority of our members are SMEs that have committed, assessed, modified and reported publicly on their journey towards responsible sourcing for a number of years now. All reports are available at www.ieh.no (the majority are only available in Norwegian, unfortunately).
Members of the three ethical trading initiatives and similar multi-stakeholder initiatives like the Dutch Fair Wear Foundation, are already meeting the expectations of the UNGP, although we might need to modify the labels we attach to our work in order to convey that more clearly.
In our experience, SME's, provided with the right tools, can not only match but in some cases outperform larger companies when it comes to achieving improvements in their supply chain. How? SMEs, lacking the leverage that MNCs have purely by virtue of their size, often see the relationship with their suppliers as key to ensuring sustainable business and supply security. Longer and better supplier relations, with enhanced trust, are a great starting point for addressing some of the more challenging business critical and social critical issues that are often obscured by audit trails and compliance management systems. Furthermore, internal communication is often more responsive in SMEs, making the leap from a commitment to ethical criteria/human rights to reviewing and modifying own purchasing practices much shorter, quicker and better integrated throughout the company.
To conclude, I applaud the Commission's focus on how to best help SME's live up to their responsibility, but would like to add that building on existing initiatives and experience is by far the most cost-efficient way to implement UNGP for SMEs. So, get in touch - we're here to help you!
Per Nitter Bondevik