Question

1. Is it possible to align the issues that are addressed by the CSR requirements defined by customers with the issues that are relevant to their smaller suppliers? If yes, how?
2. Can the use of management systems like ISO14001, ISO26000, OHSAS18001 and FSC help SMEs in complying with the requirements defined by customers?
3. Is it possible to stimulate final customers to pay a price premium for CSR?
4. Can supply chain partners address the issues that are related to the existence of different standards (that also change over time)?

  

Answer 1

1.Yes, it is possible to align the issues addressed by CSR requirements with those relevant to their smaller suppliers. The CSR concept got developed basically for multinational businesses Besides, the CSR practices in multinational companies are greatly different from those designed for small and medium-sized enterprises (SMEs) due to the uniqueness of such firms. For instance, most SMEs are under direct management by their owners and are more linked to the local community. Besides, the SMEs lack adequate resources and support necessary for the implementation of CSR. Therefore, to align the issues addressed by CSR requirements, that are defined by customers, to those that are relevant to smaller suppliers, the multinational or la companies must understand the size of the smaller firms, as well as expect the efforts of CSR accordingly. CSR can be described as the voluntary integration of environmental and social concerns by the companies in both their relationships with interested parties and commercial operations. Therefore, the expected scale of CSR should be as per the suppliers’ affordability the smaller suppliers to willingly engage in various practices that support the environmental and social wellbeing.

2. Yes, the use of systems such as ISO14001, OHSAS18001, ISO26000, and FSC can help SMEs to comply with various requirements defined by the customers if such tools get applied honestly as opposed to being used just as a formality to pass the compliance needs of the customer.

3. The final customer is usually price-sensitive, and that is why most companies prefer outsourcing their work from various developing countries so as to benefit from lower cost of labor, which result in higher profit margins. It, therefore, becomes difficult to convince final customers to pay a price premium for CSR. However, in cases of luxury commodities, or products and services that target a particular market that is sensitive to both the environmental and social causes, it is possible to stimulate them to pay a price premium for CSR.

Q 4. The presence of different standards for the CSR requirements usually does not impress the smaller suppliers, who often strive to attain the CSR standards that are set by the large customers. That often occurs even as the smaller suppliers struggle with resource-related constraints, and when the large customer firms comply with lower standards. Therefore, to address such an issue, the defined CSR requirements needs to be based on the percentage company's financial size. For instance, both the supplier and the customer are complying with the set standard to invest two percent of their annual incomes into CSR operations. That way the CSR efforts' relative size will depend on the organization's capacity, hence will not act as a burden to the smaller suppliers.