A supplier code of conduct defines the ethical principles and requirements that a company expects its suppliers to commit to. It’s also the first step in managing risk: how a potential supplier reacts to such requirements says a lot about their values and how they operate.
While we all want all supply chains to become fully sustainable overnight, it’s essential that suppliers can feel that fulfilling those requirements is within their reach – even if they need support getting there.
A refreshed supplier code: the Stora Enso journey
Even the best supplier codes need updating as times and expectations change. They should be periodically reviewed to see how well they have stood the test of time: if they still reflect the values and ambitions of the company and the overall developments in global supply chain sustainability.
Stora Enso’s first sustainability requirements for a limited number of suppliers date back to the early 2000s. To build on them – and later editions – our current Supplier Code of Conduct, which applies to all our suppliers everywhere, was published and rolled out in 2014. By the third quarter of 2020, in only a few years, it reached a very high signing coverage of 97%. The code has served us well but this year, we decided to refresh it. From the beginning it was clear that we wanted to be radically transparent: to engage with our stakeholders early on to make sure that we consider as many viewpoints as possible.
Naturally, there are parts in the current code that we already knew are challenging and needed to be re-phrased or changed during the renewal project. In addition, we did comprehensive benchmarking of similar codes of our peers and customers as well as reviewed potentially upcoming legislation that should possibly be considered in our process. And we, of course, had many internal discussions with our own experts on what should be changed or added.
This time we also wanted to hear what others had to say. During the summer of 2020, we ran several focus groups online, with participants representing some of our biggest suppliers, sustainability-oriented customers, and an investor. My team and I felt that the open dialogue was very helpful. Some suppliers were bravely voicing their concerns over the challenges of ethical codes, but many also gave encouraging comments on how these types of requirements help push sustainability down the supply chain, and how the topics we brought into discussion were valid and spot on. Also our customers were happy with our suggested changes to the Supplier Code of Conduct and about being involved in the process.
So, what’s new then?
I think that our updated Supplier Code of Conduct better reflects the changing landscape of sustainability. Some of the new elements include data privacy and cyber security, community engagement, reasonable remuneration for employees, and more of an emphasis on environmental performance, such as reducing greenhouse gas emissions and improving circularity.
Ethics evolve over time. What was considered fully acceptable in business a few decades ago, might be completely out of the question today. To be a leader in doing the right thing, we need to stay alert in a changing world and work together with our suppliers and partners.
As my colleague Johanna Hagelberg, Head of Sourcing and Logistics highlighted at our Supplier Day 2020: “With the renewed Supplier Code of Conduct, Stora Enso will continue to invite all its suppliers to continuously raise the bar and drive improvements. We have great suppliers. Together we can do this.”
The updated Supplier Code of Conduct is available in English here. It will be will be valid starting 1 January 2021 and will accompanied by our updated Practical Guidance. The guidance will link the code’s requirements into practice.