There is increasing pressure for companies to be held more accountable for their supply chains. The global unearthing of forced labor, draft legislation in Europe, Covid-19, and climate change are all conspiring to bring supply chain transparency into even sharper focus, demonstrating just how critical governance is in terms of environmental protection and human rights for business success.
Meanwhile, a legislative initiative drafted by the European Committee on Legal Affairs on corporate due diligence and corporate accountability is also in discussion.
The groundswell demonstrates that this new directive, submitted to the European Commission last September, is expected to be adopted later this year. If successful, it will enforce mandatory supply chain due diligence for all companies operating within the European Union, even if they are established out of the region, but are selling their products and services there.
At the end of April, the Solar Energy Industries Association (SEIA) published a set of tools, such as the Product Traceability Protocol, to support companies in proving no forced labor has been used in their supply chains.
The Solar Supply Chain Traceability Protocol is a set of guidelines intended to help solar companies meet compliance obligations and “provide customers with assurances that their solar products are free of unethical labor practices.” (Read the protocol here.) It also released a Solar Buyers’ Guide on Traceability to put forth supply chain best practices.
In a webinar on Tuesday, June 1, Nextracker, SEIA, Engie, and Micron Technology will address these critical issues. Director of Sustainability Sarah Albert will discuss improving supply chain transparency with a particular focus on the importance of being on the ground, working closely with suppliers to meet sustainability expectations, and establishing a company-wide code of conduct.
Joining her will be Evelyn Butler, Vice President of Technical Services at SEIA, who will outline the association’s newly published solar supply chain documents; Craig Murphy, Sr. Director Global Procurement Solutions, Analytics, and Product Compliance at Micron Technology who, in discussing the electronic manufacturer’s supply chain risk management, strategy, and processes, will provide insight on what lessons can be transferred to solar; and Thierry Dardeau, Procurement Category Manager – Renewable Energy at ENGIE, a customer of Nextracker, who will share the company’s responsible procurement strategy, including new supplier onboarding, exiting supplier management, integrated audit approaches and the overall importance of supply chain transparency.
In the run up to the webinar, Sarah Albert answered some questions on what the team at Nextracker is doing in this area.
Why is it so important to implement responsible procurement practices?
At present, we’re working to reduce our environmental footprint and in a company like Nextracker, working proactively with key stakeholders in our supply chain is a way to this just that. However, taking a holistic approach to implementing sustainability in to the procurement process is critical to build a resilient supply chain with properly managed risk mitigation. In the case of Nextracker, the growth we’ve experienced over the last few years has increased the complexity of our supply chain network and the only way to efficiently manage the process is by incorporating sustainability into our procurement practice.
Do customers really care?
Absolutely. Responsible procurement comes up in nearly every customer meeting that we have and is often the most pressing question. We’re seeing the industry’s standards and expectations change very rapidly in this space which has provided us with a great opportunity to step up and demonstrate our commitment and dedication to improve.
At Nextracker, you’re looking to implement a sustainability engagement initiative and responsible procurement program (RPP) with your supplier partners. How does a company best approach suppliers about these issues?
We meet our suppliers where they are. That means respecting and valuing their work, their cultural norms, language, and inviting them to the table to dialogue rather than a one-way conversation.
What are the key considerations in such initiatives and programs?
We believe that to become true partners, we must invest in the capacity-building of our suppliers. We bring in third party vendors to provide customized training, risk assessment, and onsite audits. We always have a strategy but recognize that we must be flexible as we get to know each supplier better and make sure that we’re transitioning the knowledge we bring in from third party vendors in-house so that eventually the know-how becomes native and operational.
You recently wrote, “Much of what I learned from the employees and observed during my time on the factory floors led to Flex programs that have helped improve working conditions and expand workplace benefits.” Can you provide specific examples of improvements made?
Factory floors are my favorite part of my job. I could go on forever about this topic. I’ve learned lessons such as the importance of safe, clean workplaces as well as safe and clean living accommodations to more complex issues such as managing communication and cooperation between different generations of workers. We’ve also worked on training managers to be less top-down focused in their management style and the importance of competitive compensation.
Tackling responsible procurement is a daunting task yet the solar industry can observe from other industries that meaningful strides are possible. I’m constantly learning and evolving my point of view and looking to learn from other industries for insights. We aren’t reinventing the wheel – it’s about communication. The most important component is an open dialogue between customer and supplier and to have local teams in each region to adapt to cultural norms and needs.
Make sure you join this important discussion by registering for the free webinar on Tuesday, June 1.
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