By Lori Stamm, Director of Supplier Assessment and Improvement Programs and Evie Simkins, Analyst, Assessments and Consulting
This article is part of Verité’s Human Rights Due Diligence Insight Series. In each article, we’ll break down one step of the HRDD process, providing a clear picture of best practices, real-world examples of successful implementation, and practical tips to make human rights due diligence (HRDD) work for your business.
In today’s complex global marketplace, many companies operate without a clear understanding of the human rights risks lurking within their supply chains. To better grasp the risks, companies often make use of traditional compliance audits – a process that is too often a simple checkbox (or tick-box) exercise. True risk management requires moving beyond traditional models to develop a concrete, nuanced understanding of how labor violations can emerge at every tier of production—from raw material extraction to final assembly.
Consider an electronic toy: to produce the electronics in the toy, metals were mined, sometimes at small-scale artisanal mines in remote locations; suppliers of components like chips and wires had to be involved, and the final product – the toy – is assembled at production factories, where other materials like plastic or fabric are added. If workers at any tier of the supply chain are subjected to potential labor violations – unsafe conditions or substandard wages – the brand is exposed to significant legal and reputational risks.
Today, brands face mounting pressure from civil society, governments, and consumers to uphold ethical standards. However, even when traditional audits identify human rights violations in supply chains, follow-up is minimal and tends to result in superficial fixes rather than addressing root causes. For example, a single worker rights training after an audit is not only inadequate, it is also ineffective. Even worse, when suppliers lack a genuine commitment to addressing issues, knowledgeable workers may stay silent about violations out of fear of retaliation.
Prioritizing Worker-Centered Approaches
Drawing on our 30 years of experience, Verité firmly maintains that a worker-centered approach is the essential foundation of any effective workplace assessment. This critical element is precisely where most conventional audits fall short.
A worker-centered approach focuses on building genuine trust through thoughtfully designed interview techniques. All assessments and interviews include tailored strategies for engaging with specific demographics like women and migrants, whose workplace experiences often differ significantly.
These strategies include taking such measures as meeting workers off-site at neutral locations if necessary to ensure they feel safe speaking openly, and ensuring interviewers share cultural connections with workers—all interviews take place in worker’s native languages. These practices create an environment where authentic workplace experiences can be shared without fear. Additionally, in order to ensure workers do not face reprisals for participating in interviews, Verité ensures that there are anonymous reporting channels and clear non-reprisal policies in place.
Because of its worker-centered approach, Verité assessments often unveil areas for improvement that previous audits had consistently missed, leading to the opportunity to resolve issues that address root causes.
Beyond Checkbox Audits: Key Components Driving Impactful Supply Chain Assessments
What are the key components that drive an impactful and effective assessment?
- Root Cause Analysis: Instead of focusing solely on non-compliances, investigate why they occur.
- Worker-Centered Methods: Worker interviews should be central to any assessment related to human rights.
- Alignment with International Standards: Findings should be benchmarked against international labor standards, especially in regions where local laws fall short.
- Specialized Expertise: Our team brings deep expertise in labor rights and supply chain dynamics, enabling nuanced analysis and actionable recommendations.
- Collaboration for Continuous Improvement: Assessments are only the beginning. We guide suppliers on the steps necessary to implement and sustain meaningful changes.
Driving Supplier Success through Continuous Improvement
Thinking beyond traditional audits to a broader, more holistic approach that includes improvement programs is key to a supplier’s long-term success. Identifying problems and implementing a plan to solve them is crucial for suppliers’ long-term viability.
This might not be immediately clear to suppliers as they face a myriad of challenges that include meeting the evolving industry and regulatory human rights due diligence (HRDD) requirements on top of their existing financial and operational concerns. However, suppliers will have improved business outcomes by focusing on addressing the root cause of issues and developing a forward-looking strategy that not only remediates identified issues but ensures future compliance. One of the most significant benefits of this approach is increased worker satisfaction, which research shows increases productivity and work quality while reducing turnover.
Elevating standards through Supplier Assessment and Improvement Programs:
- Assessment and Corrective Action Support: Assessments are tailored to supplier contexts and include actionable recommendations for remediation. They are also reviewed and verified in a timely manner to ensure meaningful progress.
- Policy Development: Supporting suppliers to develop HRDD-aligned contracts and internal policies as part of broader management system improvements.
- Capacity Building: Training programs for managers, supervisors, and workers to ensure HRDD principles are understood and implemented
- Ongoing Support for Remediation: Ensure workers receive adequate remedy for all violations of their rights while preventing future risks.
Traditional audit approaches too often fail to deliver the systemic change workers need. Verité’s Supplier Assessment and Improvement Programs offer a road map for businesses to ensure their suppliers uphold ethical labor standards in a meaningful and sustainable way. If your company is looking for a practical, effective way to strengthen its supplier engagement, you can reach out to our Supplier Assessments and Improvement Programs team to learn more about how Verité can help. Find an outline of our services here.
About the Authors
Lori Stamm, Director of Supplier Assessment and Improvement Programs.
Lori has over 10 years of experience in business and human rights, including human rights impact assessments and digital tools for supply chain management.
Evie Simkins, Analyst,
Assessments and Consulting. In her 10 years at Verité, Evie has overseen and collaborated on the execution and delivery of hundreds of supplier assessments and consulting engagements across the sectors and regions in which Verité operates.
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