Audits, questionnaires, certifications, dashboards. If you work in procurement or sustainability, you might know this toolkit well. And while these tools have a role to play in supply chain due diligence, it is important to critically reflect on whether they capture what is actually happening at supplier level and help to improve the situation for potentially affected people. Do conventional supplier monitoring methods build the kind of supply chain relationships needed to implement due diligence in line with the EU Corporate Sustainability Due Diligence Directive (CSDDD)?
The Corporate Sustainability Due Diligence Directive (CSDDD) does not mandate a specific tool or method for engaging suppliers. Yet many companies find themselves relying on more standardized, often digital tools for their supply chain due diligence.
In this CORE Message, we look at how to engage suppliers beyond standardized tools and why effective supplier engagement is needed to address risks and build more resilient business relationships.
When are supplier engagement tools useful in CSDDD human rights due diligence?
As iterated above, tools have a role to play but they are not the whole supply chain due diligence approach.
Audits and supplier self-assessment questionnaires (SAQs) can help to build a baseline, especially for procurement teams managing hundreds of suppliers. They help identify risks in the supply chain, indicate where suppliers stand, support with data collection and let you scale certain standards across a large supplier base.
However, there are also limits to using standardized tools in human rights due diligence.
Read this CORE Message for a deep dive into the shortcomings of social audits and certification schemes and read this CORE Message to explore what the CSDDD explicitly stipulates about audits and certifications.
On an additional note, supplier engagement is also necessary for implementing the EU Forced Labour Regulation (EUFLR).
While the EUFLR does not require companies to conduct due diligence, companies that have built strong, trust-based supplier relationships are better placed to identify and address forced labor risks before they result in import restrictions.
How can suppliers be more meaningfully engaged for human rights and environmental due diligence?
These are questions we regularly work through with clients, including responsible procurement teams of multinational companies. They were also at the center of a recent CORE webinar, where we spoke with Ingrid Håvik, Head of Responsible Procurement at Strawberry, and Julien Lavarini, Managing Director at Lorenz Snacks India, about how they engage suppliers in practice. Watch that “Let’s Get to the CORE” webinar here.
Their experiences, together with what we see in our own work, point to a few principles that can guide supplier engagement and help you work with your suppliers to address human rights issues.
Prioritize your suppliers for tailored engagement. Not every supplier needs the same level of engagement, and trying to have a close relationship with thousands of suppliers at once is neither realistic nor necessary. A risk-based approach means starting with a smaller group of high-risk and strategic suppliers, investing properly in those relationships, and broadening the approach gradually as capacity allows. At Strawberry, for example, the process starts with an assessment of risks at category level and then looks at the maturity of the individual supplier within that category, before deciding how much engagement a relationship needs.
This, in turn, means tailoring the engagement approach to the supplier rather than applying a standard process across the board. Ingrid Håvik from Strawberry described going into supplier meetings having already researched what governance structures a supplier has in place and how mature their sustainability practices appear to be.
This kind of preparation becomes useful because, instead of opening with a generic questionnaire, you can ask pointed, specific questions, such as whether your supplier has certain measures in place or knows its top risks, which tend to reveal more than a standardized form.
Over the years we, at CORE, have worked with companies to develop targeted supplier engagement formats, often combined with research into prioritized categories and/or suppliers, with the aim of focusing on questions relating to the risks that are relevant to the category and country of the supplier. Using customized questionnaires that reflect the main risks and challenges connected to the product or service you source (and the sourcing country) helps you use tools in a more targeted way to produce the insights needed.
Build strong partnerships with your suppliers. For this, long-term commitment is necessary. Julien Lavarini from Lorenz Snacks, whose company sources commodities like peanuts and cashews from regions including Mozambique and India, made the point that meaningful change in agricultural supply chains does not happen in one audit cycle. It takes years of sustained dialogue, sharing knowledge with suppliers, being willing to explain standards and new regulatory requirements they may not have encountered before and thereby building trust. This kind of sustained supplier engagement can also surface issues that a standard audit would miss entirely and open the door to solving them together rather than simply logging them in a system.
It also helps make time for the person on the other side. Little things like having a call before sending a questionnaire, to explain why the information is needed and how it will be used, and to listen to what day-to-day work looks like for the supplier, can change the tone of the whole relationship.
The questions then feel less like another task from a customer, less transactional and more like the start of a conversation.
Follow through on what suppliers share with you. Requesting answers to a long list of questions that are never revisited gives suppliers little in return for their time and can discourage them from collaborating next time. It is important to respond and to follow up with suppliers. If a supplier flags excessive overtime, for instance, the useful next step is to have a conversation about why this is happening and whether the buyer’s own purchasing practices might be contributing to it.
Assigning a clear point of contact within procurement for strategic or high-risk suppliers also helps maintain that sustained engagement. It allows a real relationship to develop, one that can carry both commercial and human rights conversations without the supplier having to navigate five different internal stakeholders.
Work collectively where individual leverage is limited. For risks that are more systemic or that sit deep in the supply chain, individual company action is often not enough. Collective industry efforts like AIM-Progress and the Pharmaceutical Supply Chain Initiative (PSCI) bring, among other actors, buyers and suppliers together to share knowledge, build capabilities and take collective action to address industry- or region-wide challenges.
But becoming a member of an industry or multi-stakeholder initiative is not the only way to benefit from collective action. A less formal example is the roundtable initiated by Ingrid Håvik, which sprang from a need to exchange views and practices with peers on the business response to the Russian occupation of Ukraine. Since then, the discussions have expanded to other business and human rights challenges, and the group now consists of over 60 companies and has met a number of times.
Be creative and be proactive. Despite the underlying international framework – the UN Guiding Principles on Business and Human Rights (UNGPs) celebrating its 15th year this year, the field of business and human rights is still relatively young.
The legal requirements are even younger, with the CSDDD and EUFLR at the brink of enforcement. This means that the tools, structures and networks needed to ensure responsible and sustainable business are being developed and updated in real time, especially with the incorporation of AI. Where existing tools or communities are inadequate or insufficient, there is plenty of room for creativity and proactivity.
One conventional but ineffective method is the use of contractual assurances. Most supplier agreements reference or annex a long list of conventions, laws and standards that suppliers are expected not only to know but also to commit to complying with. To win the business, suppliers have no option but to sign these commitments in buyer-side contracts that are not even negotiable.
Recognizing that contractual assurances don’t lead to responsible practice and that the lengthy UNDP guidance would be too abstract to hand to suppliers, the company looked for a concise and effective way to help suppliers conduct their own conflict-sensitive due diligence. The result was a two-page checklist with ten steps that Strawberry developed to simplify a UNDP guidance document on how to conduct business responsibly in conflict-affected and high-risk areas for its suppliers.
Whether it is for your organization’s own internal use or to encourage collective action, meaningful supplier engagement benefits significantly from constructive challengers and creative, proactive, outside-the-box thinkers.
Shift your perspective, from controlling and monitoring to partnering. Expectations don’t have to drop for this perspective shift. A company can be clear and consistent about what it requires from its business partners while still trying to understand the pressures its suppliers face, including the impacts a company’s own purchasing practices might have at supplier level. At Strawberry, Ingrid has seen suppliers she has built trust with come forward earlier and more openly when something goes wrong. That openness has proven especially valuable during conflicts and supply chain disruptions, when both sides need to communicate quickly and find solutions together. Julien’s experience at Lorenz Snacks points in the same direction: long-term dialogue is what makes honest exchange possible.
For that perspective shift, internal awareness and capacity building are prerequisites. Buyers are rarely trained to have a due diligence conversation with a supplier or to interpret and act on the information received. Equipping the teams that engage with suppliers for other purposes with a human rights perspective and knowledge of relevant risks and then providing them with practical guidance on how to raise and follow through on a finding, are necessary to move beyond standardized due diligence processes and tools.
Make it work internally. To have the necessary resources in place, support from senior leadership is crucial. We often see that companies need to show management what kinds of benefits a different supplier engagement approach delivers before more resources are approved. Starting small, for example, with a pilot project that demonstrates concrete outcomes, is usually more persuasive than a theoretical argument. Over time, the performance of procurement teams, which is often evaluated based on cost and delivery, must also incorporate human rights-related indicators, if effective supplier engagement and, ultimately, responsible business practices, are to be achieved.
CORE’s Take:
In our experience, companies that have made actual improvements in their supply chains are the ones that engage suppliers proactively. They identify issues early and find creative ways to tackle them with their suppliers. They view supplier relationships through a partnership-lens, with each side examining their processes and actions and the impacts these might have on human rights, communicating transparently and working together to find solutions.
If you are currently choosing a tool for your supply chain due diligence, for example to meet the EU CSDDD requirements, it is worth asking how the tool will be embedded in the overall supply chain management processes, what outcomes it will deliver, whether different insights are needed, and in which cases an engagement-based approach could add more value to your sourcing relationships.
If you’re looking to engage with business partners in your supply chain to strengthen your human rights risk management in line with EU CSDDD and other due diligence regulations, message me at stephanie@peopleatcore.com.
Stephanie for the CORE team
