Sustainable procurement needs to be given more attention by North American firms, a new study shows, with overall risk having increased in the sourcing of textiles and footwear over the last three years.
According to an analysis of 33,000 North American companies, conducted by sustainability ratings firm EcoVadis from 2015 to 2017, business ethics is the most improved CSR theme globally across all industries.
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Global environmental performance dipped slightly, from a score of 45.4 to 45 overall, while sustainable procurement practices need more attention, the report ‘Global CSR Risk and Performance Index‘ found.
Any score under 45 represents medium to high risk of the procurement instability, reputational risk and overall business disruption that can come from complacency in areas traditionally seen as CSR, according to the report.
In particular, the light manufacturing sector, which includes the production of textiles and footwear, as well as wood and paper products, has seen its risk increase since 2015. This is primarily due to major CSR issues associated with these activities such as social and human rights abuses as well as excessive water and energy consumption. A number of scandals have been associated with these sectors, ranging from exploitation of factory workers in textiles, to irresponsible or illegal sourcing of tropical wood and paper pulp.
According to the report, small and medium-sized companies did not improve and large companies’ CSR management performance dropped, particularly in the labour and human rights theme, which, the report says, arguably suggests that the Bangladesh Accord – introduced in 2013 to improve working conditions – made “little impact” during its five-year duration.
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By GlobalDataOverall, large companies scored 41 in 2015, which jumped to slightly above 43 a year later, before falling again to just below 41 in 2017. Small and medium sized companies scored just below 40 in 2015, before edging up to above 41 in 2016 and 2017.
Scores for sustainable procurement were down on 2016 among both large and small and medium-sized companies, likely related to decreased market pressure for sustainable resources, which may lead to more deforestation, the report suggested.
“Textile and fabric industries continued to be exposed to fast-fashion cost models, which disincentivize investments in supplier capability building and in scaling up “greener” materials, despite consumer demands for ethical fashion,” the report noted.
“Deforestation activities continued to lead to ecosystem losses valued at US$2-5 trillion due to extraction of raw materials, such as timber and wood pulp as well as repurposing land for cash crop production, which caused ecosystem losses valued at $2 to $5 trillion annually.
Businesses did, however, continue to respond to consumer demands for more transparency in production and materials used, including a push for more use of recycled or sustainable materials.
Click here to access the report.
