On supply chains and reputation risk: tracking changes in supplier codes of conduct

Increasingly, consumers and professional buyers are reluctant to purchase goods and services from firms that produced those goods and services in irresponsible ways, including the use of child and forced labour, unsafe working conditions, and processes which damage the environment. The reputations of firms that operate or source from irresponsible factories are increasingly at risk and, consequently, firms are taking steps to mitigate those risks. Supplier codes of conduct are part of a set of tools used to ensure that business practices at suppliers’ facilities are acceptable to buying firms and their stakeholders. Given the relatively recent existence and rapid growth of conduct codes, this paper addresses how their content has changed over time. A longitudinal analysis indicates that supplier codes of conduct are: becoming more explicit in defining transgressions and out-of-compliance situations, incorporating a broader array of human rights provisions, and using language that leads to working together to fix problems, rather than moving business out of suppliers.