December 10, 2013

An exploration of measures of social sustainability and their application to supply chain decisions

Notes about Hutchins M J, Sutherland J W. An exploration of measures of social sustainability and their application to supply chain decisions[J]. Journal of Cleaner Production, 2008, 16(15): 1688-1698.

lA category hierarchy for a social LCA based upon the environmental LCA category hierarchy. The social category hierarchy provides insight into the mapping of corporate inputs and outputs into measures of social performance.

l A simple relationship and example that demonstrates that a corporate supplier decision can be linked to a social indicator (infant mortality) and corporate actions can be used to effect positive social change.

l Several proposed measures of social sustainability for supply chain decision-making (labor equity, healthcare, safety, and philanthropy) that serve as a starting point to establish a comprehensive social footprint for a company.

l A technique to integrate a variety of measures of social performance to form a single social sustainability metric for a company.

l A method for combining the social sustainability metrics for companies to form a single measure of performance for a supply chain. This measure is based, in part, on the value that each supply chain partner contributes to the product of interest.

Not united definition about social sustainability

Discussion of this element has received little attention in the literature, and when discussed, has emphasized legislative issues or human health and safety rather than the cultural and ethical ramifications of decisions

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Tools to support social sustainability social life cycle assessment

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‘socio-eco-efficiency’ analysis corresponds to BASF’s eco-efficiency analysis and compares environmental and social performance to economic costs.

The work of the United Nations Environmental Program (UNEP)the Society of Environmental Toxicology and Chemistry (SETAC) Life Cycle Initiative has indicated that further efforts are needed to include social considerations because ‘so far, the social and ethical dimensions of sustainability have not been given the same attention within the business community since the benefits are less tangible’

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For example, the health and safety aspect within the labor practices and decent work category contains the following core indicators:

lpractices on recording and notification of occupational accidents and diseases, and how they relate to the ILO Code of Practice on Recording and Notification of Occupational Accidents and Diseases,

ldescription of formal joint health and safety committees comprising management and worker representatives and proportion of workforce covered by any such committees,

lstandard injury, lost day and absentee rates and number of work-related fatalities (including subcontracted workers), and

ldescription of policies or programs (for the workplace and beyond) on HIV/AIDS.

Effect of business decisions on social sustainability:

Given the desire to establish a supply chain that is socially sustainable, as a first step we must evaluate companies in terms of their social impacts. The basic exchange between a company and its suppliers is money for goods or services. There may also be opportunities for each of the stakeholders to have a role in guiding the values of the company; likewise, the company may help to shape the values of its stakeholders.

Establishing the social impact associated with a given product or service due to the actions, policies, and choices of all the suppliers

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December 06, 2013

some classificaton of social sustainable supply chain and some gaps

Borrella I, Carrasco-Gallego R, Moreno J, et al. Social issues in sustainable supply chain networks: state of the art and further research directions[J].

Beyer von Morgenstern C. Social Sustainability Practices within the Supply Chain of Multinational Corporations[J]. 2012.

The sustainability in social terms is difficult to achieve because, as we just observed, social impacts are not even well defined yet. However, academic and practitioner communities have worked on the design and implementation of standards and codes of conduct applicable to supply chains.

In order to clarify the main trends in the socially focused sustainable supply chain field, we have developed a classification proposal, which is the main result presented in this paper. (models)

This categorization consists of three main parts:

• Social impacts and measuring

• Standards and codes of conduct

• Poverty and local communities

Social impacts and measuring

The meaning of “social impact” is not yet well defined. There are two main literature trends that raise the subject: Corporate Social Responsibility reporting and life cycle assessment.

Standards and codes of conduct

Standards and codes of conduct linked to sustainability usually contain both environmental and social requirements. In this paper, we have restricted our study to standards that consider social dimensions: UN Global Compact, GRI Guidelines, AA1000, SA8000 and ISO26000 are some of the best-known.

Globalization has caused the diffusion of supply chains to developing countries. Hazardous working conditions, child labor, low wages and excessive working hours in factories of these countries have lead to big scandals, consequences being suffered by the international companies which sourced from them. Therefore, social issues considered in codes of conduct and international standards have been mainly focused on workers wellbeing (labor conditions, safety in the workplace, gender equity, etc.). Some codes mention philanthropy and relationship with the local community, but this matter is usually pushed into the background in favor of workers human rights concerns.

Poverty and local communities

The first papers relating to poverty concerns and supply chain management were those belonging to the Fair Trade trend. Fair Trade promotes a trading system model which seeks to provide producers in developing countries with a living wage for their work. This is achieved through helping them to get access to international markets and to Borrella, Carrasco-Gallego, Moreno, Mataix develop the necessary business capacity to compete in the global marketplace. In order to get the Fair Trade certification, all supply chain agents must adhere to determined standards, related to fair benefit distribution along the chain, proper labor conditions and low environmental impacts. Fair Trade has been traditionally fostered by NGO and development agencies.

This literature review has evidenced that there has been an exponential growth in the field of supply chain sustainability, but the study of social issues has been quite limited. The main reason is that research efforts have been directed towards the study of environmental matters, leaving social issues in the background. (maybe there is a gap)

Some gaps:

Eltantawy et al. (2009) define a social sustainable supply chain as “managing the optimal flow of high-quality, value-for-money materials, components or services from a suitable set of innovative suppliers in a fair, consistent and reasonable manner that meets or exceeds societal norms, even thought not legally required.”

Potential social issues within the supply chain are not diverse but can also be found in all steps within the value creation. Such issues are usually tried to be prevented by codes of conduct and typically comprise issues like safe and hygienic working conditions, enforcement of child labor laws, reasonable working hours and payment.

Since the supply chain network of Multinational Corporations is more and more located in developing countries. Social sustainable compliance is further complicated. As every country has its own regulations, legislatives and social policies, Multinational Corporations have to find the right implementation process to respond to such influences.


Assessing Social Sustainability

Assessing Social Sustainability
The Social Dimension of Sustainability in a Socio-Economic Scenario
Ines Omann and Joachim H. Spangenberg
Sustainable Europe Research Institute SERI
Schwarzspanierstr. 4/7, A-1090 Wien, Austria, Tel./Fax +43-1-405 5673
Grosse Telegraphenstr. 1, D-50676 Köln, Germany, Tel./Fax. +49-221-2168-94/-95
e-mail Ines.Omann@seri.at, Joachim.Spangenberg@seri.de
Presented at the 7th Biennial Conference of the International Society for Ecological Economics“ in
Sousse (Tunisia), 6-9 March 2002

As a means to assess the state of social sustainability, some (but few) projects have defined criteria,
goals or indicators. So e.g. in the ”work and environment” project the following social sustainability
criteria have been used (Hans-Boeckler-Foundation 2001):
! self-determined lifestyle including a mix of paid and informal work,
! satisfaction of basic needs,
! a reliable and sufficient social security system,
! equal opportunities to participate in a democratic society, and
! enabling of social innovation and structuring of work types.
Furthermore, two of the economic sustainability criteria have a social sustainability connotation:
! safeguarding the basis for satisfying material needs, and
! full employment, social security, fair distribution of burdens between generations.

Based on the qualitative evaluation of the preceding section, a deepened one is performed in this
section. For this purpose, a simple form of a multicriteria evaluation is used. MCDA stands for
Multicriteria Decision Aid, as these methods are used mainly for decision analysis or aid. Their basic
ideas, however, can as well be used for evaluations or assessments.

A multicriteria social sustainability evaluation of the scenario
For a simplified multicriteria evaluation of the social dimension of the integrated scenario, the steps of
the MCDA are applied one by one:
Step 1: The problem is defined as to evaluate the social dimension of the integrated scenario against
the reference scenario based on business as usual (BAU) politics in Germany.
Step 2: The objective is to reach social sustainability (see section 1) in Germany as soon as possible.
Step 3: The options for our case is the BAU and the integrated scenario. The changes occurring as a
result of the politics implemented in the scenario provide the base for this evaluation.
Step 4: The evaluation is performed using the six criteria already known from section 4.1.
Step 5: A simple impact matrix for the six criteria and the option “integrated scenario” is presented in
table 7. The change from the status quo is measured on a qualitative scale with 5 steps: aggravation,
no change, slight improvement, improvement, or strong improvement as compared to the BAU
scenario. They are numbered according to the Austrian school marks system, 1 (best) to 5 (failed).


The business of sustainable development in Africa

Hamann R, Woolman S, Sprague C. The business of sustainable development in Africa[J]. 2008.

A new role for business in sustainable development?

The relationship between business and society, and the way this is circumscribed by ethics and institutions, has long been a subject of debate. Adam Smith, often called the father of modern economics, emphasised how economic transactions were premised on a range of ethical as sumptions and foundations. At least since Smith’s days, establishing an institutional context in which business activity, broadly speaking, can enhance social outcomes has been a key objective and legitimating foundation for the development of modern state.

In much of Africa, this interplay between ethics, states and markets has historically been characterised by colonialism and slavery.

Social issues are not given much consideration, though there is reference to stakeholder engagement. This series has been an important guide for companies in Africa, many of which have become certified in connection with international supply chainand consumer expections.


The ISO’s breadth and legitimacy also contribute to the interest devoted to the current development of ISO 26000, a social responsibility guidance standard due for release in 2008 or 2009, standard in international supply chain.


Other market-based initiatives focus on the role of investors as potential drivers of sustainable e business practices, particularly in the form of socially responsible investment (SRI) funds.

s

The lower box shows the results achieved through continuous improvement of the company’s

enablers. These require monitoring, evaluation and reporting:

Impact on employees: Respecting the basic rights of workers reduces costs (e.g. with

regard to health and safety) and improves productivity (e.g. through enhanced employee

participation in policy- and decision-making). ‘Employees do not just expect material

advantages from their job, but rather an enhancement of meaning and community in

their lives.’


Impact on value chain: It is important to understand how customers perceive issues

related to corporate citizenship as this will influence their purchasing behaviour. It is

also important for companies to better understand how they can influence suppliers and

contractors so that they improve their social and environmental performance.


Impact on society: Assessing and managing a company’s impact on society is complex

and fraught with tensions. One of these difficulties is assessing the boundaries of a

company’s responsibilities up or down the supply chain. Another is the tension of conflicting

expectations – while the term ‘sustainable development’ confuses some people

because of its simultaneous emphasis on growth and limits, it ought to be seen rather as

a requirement for creative thinking and innovation. Finally, there is the concern about a

company’s ability to make a difference when the broader framework conditions – market

pricing, weak governments, etc. – present such powerful countervailing forces.


Reporting: Despite frustrations with regard to corporate sustainability reports when it

is said that ‘few read them and fewer believe them’, the model emphasises the need for

reporting because this helps fulfil the Global Compact commitments, by facilitating

continuous improvement and allowing for benchmarking and informed dialogue with

stakeholders

Source: C. Fussler, A. Cramer, and S. van der Vegt, Raising the Bar: Creating Value with the

United Nations Global Compact (Sheffield: Greenleaf Publishing, 2004).



Some materials about Foxconn

Some materials about Foxconn

Multi-partite modes of socially sustainable sourcing are instruments overseen jointly by firms and civil society organizations and/or trade unions. These organizations make up the London-based Ethical Trading Initiative (ETI), where the unions and civil society organization members promote the ETI Base Code (which contains nine principles, including ILO core conventions, a living wage and health and safety benchmarks) to improve sourcing practices among firms that voluntarily become members of the ETI. The ETI undertakes independent audits of practices in member firms’ supply chains, lacking the capacity to investigate and enforce themselves. The Fair Labor Association (a similar organisation to the ETI based in Washington DC) audits labour practices in the operations of member firms and firms in their supply chains (Mueller et al., 2009: 515-516) and was recently involved in Apple’s investigation of allegations of worker mistreatment in the manufacturing of its components at Foxconn in China (New York Times, 2012).

Wright C F, Brown W. The emergence of socially sustainable sourcing: A new form of labour regulation in the context of collective bargaining decline?[C]//International Labour and Employment Relations Association World Congress, Philadelphia, PA. 2012: 2-5.

Drivers for Sustainable Corporate Responsibility

The globalization of our economic world has mainly increased the productivity of enterprises. Low-cost productions allowed multinationals to augment their profitability tremendously. Simultaneously, they have been more and more scrutinized regarding negative externalities, such as social and ecologic damages caused by outsourcing productions.

Foxconn, main supplier for Apple’s iPhone, is an example of this. Responsible for more than one million employees, it is still blamed for poor and dangerous working conditions, such as excessive and unpaid overtime, denial of ergonomic breaks, meager wages, unfair treatment, inhumane management practices, as SACOM, the Honking based NGO “Students & Scholars Against Corporate Misbehavior”, disclosed September 2012, based on 60 off-site interviews at Foxconn in Zhengzhou (SACOM, 2012). The company has even been blamed for using child labor, recently (Hick, 2012). Protests, riots, suicides (NN, 2012) are the current effects of this corporate behavior. Obviously, improvements promised by Apple’s CEO Tim Cook in March 2012 (ts/dpa, 2012), have not yet been achieved.

Public pressure on companies to reduce negative social and ecologic impacts is immense.

The sociologic tendency and the economic power of the LOHAS (= Lifestyle of Health and Sustainability) movement reinforce the pressure on enterprises.

Schüz M. Sustainable Corporate Responsibility-The Foundation of Successful Business in the New Millennium[J]. Central European Business Review, 2012 (2): 7-15.

Labor practices. This subject includes: employment relationships, work and social protection, health and safety, development and training. A business organization’s negative labor practices may destroy its image in the mind of the public; even restrict maintaining the business’s license to operate. In 2010, Employees’ successive suicide due to poor management put Foxconn in an embattled position.

ZHANG X, YANG M. Research on Social Responsibility and China’s Sustainable Development Based on ISO 26000[J].

Foxconn’s strategy of low-cost, suppressed-labor-rights competitiveness is neither economically sustainable nor morally supportable. As the biggest electronics contract manufacturer in the world, Foxconn churns out massive volumes of goods designed by global companies. Although its profit margins are slim, its total profits and market share are large. Still, the company does not provide its employees a living wage, appropriate working conditions, or adequate benefits. Excessive overtime, high level of work-related stress, and disrespect for workers’ right to union representation is built-in to the Foxconn management system. Under these extreme conditions, at least 13 Foxconn employees chose to end their lives within five months of this year. To prevent similar tragedies from happening at Foxconn and other factories it is critical, first and foremost, to assure workers’ rights to democratic union organization and collective bargaining. Strengthening the participation of workers in enterprise management will help improve working conditions. We encourage independent nongovernmental organizations (NGOs) and credible union leaders to offer participatory training in workers’ rights at the workplace level. Furthermore, we advocate joint monitoring of company grievance mechanisms by local governments and external parties, excluding those who are linked to corporate interests.

We are concerned about the role of the local and national states in the protection of the new working class. The use of a large pool of young migrant labor to fuel China’s export-driven economy comes at too high a human cost. Migrant workers’ basic needs for housing, social security, and education for their children are not protected by the local government. As long as these real problems are not solved, the mental or psychological problems that have been magnified will never disappear. The government should redistribute income and guarantee benefits to rural residents and migrant workers to improve living standards. Institutional discrimination against migrant workers, based on rural household registration and other policies, must be eliminated to facilitate labor mobility and reduce labor market segmentation and discrimination at the expense of rural workers. Workers’ participation in social and labor reform will build the community resources to reduce suicides. Overall, a more balanced urban-rural development model is the key to social and economic stability.

Jenny Chan and Ngai Pun. 2010. “Suicide as Protest for the New Generation of Chinese Migrant Workers: Foxconn, Global Capital, and the State.” The Asia-Pacific Journal, 37-2-10. http://japanfocus.org/-Jenny-Chan/3408

Corporate Responsibility for Employee Well-Being

In recent years, two companies have made headlines due to their particularly high rates of employee suicides—France Telecom (24 suicides in 2008/2009) and Foxconn China (9 suicides in 2010). In both cases, the reasons cited for the suicides were directly related to organizational culture: long shifts, military-style discipline, a lack of recognition and work overload. This illustrates how HR policies shape the workplace and how HR can improve employee well-being through better working conditions and more positive workplace cultures.

Cohen E, Taylor S, Muller-Camen M. HR’s Role in Corporate social responsibility and Sustainability[J]. SHRM foundation, 2010.


Social Sustainable Supply Chain Management

Aymen S, Gabriel E. Sustainable Supply Chain Management-A Conceptual Framework[J]. 2013.

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