Why Your Company Needs an “Ethical Contract” with Partners, Suppliers and Consultants – Not Just Employees

About five years ago, there was a bit of controversy in France (where I live). Approximately one-in-five French residents revealed that ‘they have felt pressured to compromise their organisation’s ethical standards’. That may not seem like a high number, but even a single instance of misconduct can have consequences for an entire company – and the dozens, hundreds or thousands of employees working there. Not to mention the embarrassment that partners, suppliers, and customers inherit when they’re associated with a brand blemished by a scandal stemming from unethical practices. It doesn’t take much to tarnish a company’s reputation these days. (Rumors spread fast on social media, and mistake tolerance seems to be declining.) 

That’s why companies like Rayonnance, a Zebra Premier Solution and Registered ISV partner based in France, are developing ethical charters that extend to all commercial relationships, to include suppliers, subcontractors, consultants and other partners in addition to employees. I recently spoke with Arnaud Affergan, Director for Rayonnance, to understand what motivated the company to develop its charter and how it plans to enforce it with business partners. Here’s what he had to say:

Gilles: How did you go about developing that code? Did you follow the guidance of outside advisors? Solicit employee input? (i.e., Who steered the development and how did you decide what to include/omit?)

Arnaud: It had been discussed in our CSR committee that an ethical code shared with our suppliers would make sense as an upgrade to our CSR policy. We did solicit and consider employee inputs through this committee and, for several years now, we have been engaged with our customers to ensure we comply with their transparency requirements through the entire supply chain.

As a supplier to other companies, we accept responsibility to comply when signing our customers’ CSR engagements and supplier charters. This is why we planned to write our own supplier charter and share a similar level of engagement with our own providers. To do so, we referred to the values we embrace most and followed the 10 principles of the Global Compact of the United Nations. While studying the documents transmitted by our customers, we understood it was a strong basis that we shared. So, we wanted to integrate our own suppliers using the same principles as the basis.

Gilles: The trend of formalizing an Ethics Code of Conduct for those outside a company is still fairly new. So, what compelled you and your team to extend expectations to partners, suppliers, and consultants?

Arnaud: What is the point of an ethical charter? It is simply to align values. Customer satisfaction has been defined as a key value at Rayonnance, and we are also working hard to promote excellence and innovation. But those are nothing without team spirit and goodwill. We are able to make decisions and work within Rayonnance to see these decisions carried into action. But what else? Are we alone in our market? We are not. We are all part of these now so-called ‘ecosystems’.

Because we often need external service or technology providers to meet part of our customers’ requirements, we need those providers to engage at the same level – with the same integrity, values and professionalism – as our customers engaged us. That is part of our deals with many customers. The larger they are, the greater an impact they have on the world today and tomorrow – and the more they are ethically and legally concerned by their activities and the activities of those with whom they have business relationships. This includes different organisations across their supply chains.

We are part of our customers’ supply chains. So, we are challenged by our customers to embrace their new corporate social responsibility (CSR) requirements, which may include the French Grenelle II law and European Union’s Corporate Sustainability Reporting Directive (CSRD) depending on where they are based. They expect us to behave responsibly throughout society with regards to human rights, social rights, and the environment. Rayonnance’s direct impact on human rights and the environment is not really a challenge, as we already comply with the French jurisdiction, which is much more stringent than the world average. Also, we don’t have an actual industrial production within our company. So, the main risks for human rights and the environment could be attributed to our suppliers or our suppliers’ suppliers. That’s why we wrote a ‘supplier charter’ at Rayonnance.

Gilles: How will you maintain accountability and compliance with the ethical charter? Will it be a proactive effort? Do you have a team dedicated to oversight of partner and supplier business practices?

Arnaud: It is not really a proactive effort on our part as French and European governments recently designed new policies. That means new rules are applicable for many big companies. Our effort is simply the result of these new policies. It is a way to embrace them, at our level. Our customers are often legally committed to pushing new and strict ethical standards onto their supply chains. Rayonnance can be audited by many of its customers. We have signed several documents that always mention this possibility. Our charter is just our guarantee of transparency, and it shows the credibility of our commitments. We hope our providers will play the same game. We haven’t been audited so far, and I don’t think it will happen anytime soon. But we know other companies have the right to do so. We would like to have this right as well, as a guarantee, and proof of close partnership.

Gilles: What have you done to help your suppliers feel comfortable with the charter so that ultimately commit to it?

Arnaud: For now, we have communicated this supplier charter to stakeholders interested in our CSR policy, including employees, shareholders, certain customers, main providers, and external auditors such as EcoVadis. This initiative is globally appreciated and encouraged. It shows who is really engaged with us on this matter.  This effort is also positive in that it opens wider exchanges on those subjects between our companies and allows each stakeholder to understand each other’s needs and constraints better.

Gilles: How do you work with your suppliers and customers to ensure that everyone understands the actions required for compliance? And how frequently do you engage with your stakeholders on the code to ensure they understand and comply with it?

Arnaud: We don’t have much time to ensure everyone understands the actions required for compliance. Every company has their own management system and is encouraged to build its own solutions if a part of its activity doesn’t comply with new standards. We also encourage our providers to duplicate our supplier charter and send it to their own suppliers. What we can all easily do is to relay positive initiatives from other companies, and we are happy to relay the new positive constraints from big companies, who are an important part of our customers!

That said, our customers don’t need to understand the actions required for compliance because the first solicitation came from them, so we learned from them. They didn’t directly explain to us how to comply with their requirements but drove us through auditing solutions. We are expecting the same from our providers, and most of them were already aligned by the time we formally shared the code. For those who were not, the code opened new dialogues, and we hope they will understand the need for transparency in today’s complex world.

So, to ensure our stakeholders understand and comply with the code, we ask them to accept audits from us. It is the best way to ensure compliance over time. 

Gilles: I know you based your charter on the 10 main principles of the United Nations Global Compact. But did you take this opportunity to also infuse additional expectations to ensure your business alliances were based on shared values and compliant with other government anti-corruption regulations, such as SAPIN II?

Arnaud: We haven’t included other requirements, such as references to the French Sapin II law, in our supplier charter. The drafting of our CSR policy is still quite recent, and we are currently trying to align our business, including our supply chain, with one of the more internationally recognised requirements. A crucial part of these requirements is written in the 10 principles of the Global Compact, and this is why we adhere to them. One of the commitments you take on when you join the Global Compact is to promote it. This is what we do. Anti-corruption is part of the Global Compact main principles, and the tenth paragraph of our supplier charter is entitled ‘Act against corruption in all its forms’, with an explicit text under it. I think it would be too early in the process, at this stage, to have more specific and precise requirements. Tools could be built later on with our stakeholders to help them meet further standards if needed.

Gilles: Have there been any lessons learned since you started on the process to develop and publish the ethical charter? Anything you would do differently if you had to do it again? Something that worked really well and enabled you to garner support of your commercial network for this charter?

Arnaud: I am really interested in the current challenges raised by the new environmental, sustainability, and governance (ESG) policies. At Rayonnance, we decided to look at the best practices on a wider scale and at how we could defend them very effectively through our businesses. The Global Compact quickly became obvious because it is international, and it is recognised by many pairs.

For now, the cash and final usages of manufactured products is still mainly in our countries, but the extraction of raw materials is usually remote. It is very hard to have transparency throughout the whole supply chain. However, it is crucial to ensure that every stakeholder is aware and respectful of the same values. Our policies would be hollow and superficial, not to say hypocritical, if we didn’t take globalisation into account.

There are probably things we could have done differently within the process of publishing a supplier charter. We learned from society. It is hard to get things done rapidly on a large scale. But if we believe in what we do, and combine our efforts, we can push further these values of increased transparency and collaboration on ESG topics across the supply chain. It has the power of building a new sense of responsibility and closer partnerships. It is good to be surrounded by people who think like you and also by people who think differently. This is how democracies work, which is very energising! It is the best way to persuade each other not to keep the status quo and do the best one can. What has worked best so far is the multiplying of exchanges on these subjects between Rayonnance and its stakeholders. Thank you for your shared interest!