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As a result, risk management has become a crucial component for any procurement strategy. Today’s companies must steer carefully through these complex regulations to ensure compliance with ethical standards and fair global trade practices.

The new legislative landscape

Responsible sourcing in procurement means obtaining products and services in a manner that respects ethical and sustainable principles. Below are four key focus areas covered by legislative measures that exemplify these principles, ensuring that responsible sourcing remains central to any global procurement strategy today.

• Human rights and modern slavery: The EU Corporate Sustainability Due Diligence Directive, adopted in 2022, mandates that large companies conduct due diligence across their supply chains to identify and mitigate human rights and environmental abuses, including modern slavery. Similarly, the EU’s proposed Mandatory Human Rights Due Diligence laws aim to prevent forced and child labor. Other countries, such as the United States (with the Uyghur Forced Labor Prevention Act) and Canada (with Bill S-211), have also strengthened their legislative frameworks in this area. Additionally, Section 307 of the US Tariff Act prohibits the importation of goods made with forced labor. These standards are aligned in their intent to combat modern slavery.
• Living wage: The latest EU Minimum Wage Directive sets guidelines for adequate minimum wages within member states. The UK has its own Living Wage Foundation, which encourages businesses to adopt voluntary living wage standards that exceed legal minimums. By promoting fair wages, these standards have an impact on global supply chains.
• Health and safety: The EU Strategic Framework on Health and Safety at Work 2021–2027 sets ambitious goals for reducing workplace accidents and occupational diseases, emphasizing risk prevention and promoting safer working conditions. Most countries have specific regulations to enhance health and safety standards in the supply chain – for example, France’s Decree No. 2021-555 and Bangladesh’s International Accord for Health and Safety in the Textile and Garment Industry. These goals are focused on continued improvement in workplace safety.
• Working conditions: The EU’s Directive on Transparent and Predictable Working Conditions and the Corporate Sustainability Reporting Directive aim to ensure fair working conditions and enhance transparency within supply chains.

Finding a responsible partner

Navigating the complexities of responsible sourcing requires a specialist partner with an expansive understanding of individual market dynamics.

HH Global has unlimited access to suppliers across the globe and mitigation of risks is crucial in today’s supply chain environment. We add value and continuous improvement in our supply chain through our Sustainable Procurement Framework (SPF).

The SPF is a trailblazing program, aligned with the UN Sustainable Development Goals, to provide our strategic supplier partners with the tools and guidance needed to advance their environmental, social and governance (ESG) credentials. Complete with self-assessment tools and over 40 downloadable resources – ranging from training modules to sample policy documents and overviews of the evolving ESG regulation landscape – our SPF provides our strategic supplier partners with a clear measure of sustainability maturity, beyond the ESG rating. Most importantly, it enables them to benchmark their progress against industry peers, helping to create a culture of healthy competition.

The SPF is supported by an advisory board composed of senior representatives from key clients, strategic supplier partners, investors and sustainability experts. This board ensures that the program is continually evolving to meet the ever-changing sustainability landscape. Our clients further their responsible sourcing programs with confidence, knowing that they are supported by a partner committed to driving positive change across the supply chain.

Five steps to accountability

To drive responsible procurement, we operate a five-step process with an emphasis on training, updating policies and encouraging strategic supplier partners to ensure their workforce has a process to report and address potential grievances. 

1. Policy awareness: Strategic oversight by the Global Responsible Sourcing Lead, with regular policy updates and training to the supply chain. 
2. Risk assessment: Identification and prioritization of critical issues and regions with ongoing monitoring through data-driven risk assessment tools. 
3. Mitigate, investigate and prevent risk: Conducting supplier risk mapping/monitoring using appropriate tools, commissioning supplier audits and guiding them in their implementations of corrective actions, as applicable. 
4. Remedy, report and grievance channels: Ensure strategic supplier partners maintain grievance channels for workers to address concerns around modern slavery. 
5. Track, engage and monitor: Continuous monitoring with internal dashboards, establishing complaint procedures and verifying effectiveness. 

This comprehensive approach ensures that our strategic supplier partners remain aligned with global standards and regulations, promoting a culture of continuous improvement that benefits our clients and the wider supply chain. 

The future of responsible sourcing

With the right partner, businesses can confidently navigate the complexities of responsible sourcing, ensuring compliance, sustainability and ethical integrity throughout the supply chain. Such expertise is key to mitigating risk and meeting the demands of modern consumers, investors and regulators.

To learn more about responsible sourcing and our Sustainable Procurement Framework, contact us.