A new study from EcoVadis shows that global companies are failing to meet acceptable standards for eradicating unethical practices, such as environmental damage, human rights abuses, animal cruelty, and corruption in their supply chains.
The study, The Fight Against Corruption: Insights into Ethical Performance in Global Supply Chains, surveyed 20,000 global companies and found that, on a 100-point scale, the average global business ethics score was 42.4. The report makes clear that any score below 45 places businesses at ‘medium to high’ risk of corruption, and the reputation-destroying consequences that follow from it. The relatively low average score, the report notes, “indicates most organizations are taking a reactive, unstructured approach to fighting corruption risks.” Worse still, is the failure of many businesses to track and report on ethics key performance indicators (KPIs). Worldwide, a mere 10% of companies did so, a figure that rises to 12% in North America.
Professionals working in procurement jobs and procurement groups have, over the last 10 years, played an increasingly indispensable and strategic role within these global enterprises. The best among them repudiate the reactive, unstructured approach to business ethics adopted by too many global companies, and it now seems likely that they and their colleagues in supply chain jobs will have a new core function to implement: conducting anti-corruption measures throughout the supply chain.
Procurement professionals (including procurement and supply chain interims) are, with their superior visibility into supplier relationships, purchasing practices, and site-level activities, better placed than any other business units to identify corruption and insist on change. While many will be gearing up for the Christmas season, the ’12 days of procurement’, as it were, attention may need to shift to developing methods for mitigating corruption in 2019, including anti-corruption training, whistle-blowing, internal audits and, above all, making commonplace the currently rare best practice for anti-corruption – comprehensive risk assessments.
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