T H E 1 2 T SUPPLY CHAIN IMPROVEMENTS HINGE H U Spotlight N I T ON GREATER COLLABORATION WITH E D N SUPPLIERS, ESPECIALLY SMALL AND A T I MEDIUM ENTERPRISES Living Wage in Supply Chains O N S G L O Businesses’ relationship with their suppliers and Securing a living wage, defined as a wage B A distributors is shifting. To anticipate changes and sufficient to afford a decent standard of living L C O M adapt quickly, companies are looking to increase for workers and their dependents, has long P A C cooperation with their supply chain partners. been acknowledged as a crucial challenge T - A Lorenzo Simonelli, Chairman & CEO of Baker C facing the private sector when it comes to C E N Hughes, describes, “Supply chain challenges responsible supply chains. Business leaders T U R are requiring people to coordinate and work are increasingly expressing their commitments E C E closer with their supply base so that we can to providing a living wage, and they are O S T anticipate what’s going to change and what’s beginning to take meaningful action both in- U D required. And it comes down to moving away house and across their supply chains. Actions Y from just transactional to strategic partnerships such as including living wage considerations with your suppliers.” Ryuichi Isaka, President & in purchasing practices or enhancing pay Representative Director of Seven & i Holdings systems to assess wage gaps help implement Co., Ltd. adds: “For a resilient business model, a living wage across a company’s strategy. sustainable and reliable sourcing is essential. We are working with our suppliers on new Beyond the societal benefits, ensuring a production and procurement that take advantage of living wage can constitute a strong business innovative technology as well as on multi-sourcing.” investment, fostering a competitive advantage through increased retention and motivation, Furthermore, as CEOs recognize that a large bolstered supply chain resilience, and part of their carbon footprint lies in their supply intangible brand and commercial recognition chains, CEOs are also focused on encouraging from investors, consumers, and regulators. their suppliers to adopt sustainable behaviors, Supporting living wage goals can also catalyze with 33% of companies now incentivizing ESG a wider range of SDG achievement, specifically outcomes for their supply chain. António Costa, by mitigating gender inequity and reducing CEO of Kaizen Institute (Kaizen Institute Global global poverty. Group of Companies), shares, “When you try to find a new partner, or a new supplier, your first thought is no longer only about cost. We have to For further information on Living Wage, visit consider the sustainability implications of who the UN Global Compact website: Improving we’re working with in the future.” Wages to Advance Decent Work in Supply Chains. 16 CEOs of SMEs , representing companies that constitute a significant part of the supply chain, are also confirming their commitment to sustainability, but often do not have sufficient resources or support to prioritize it. Nearly all (99%) CEOs of SMEs feel it is their role to make their business more sustainable, but a majority (85%) suggest that they need educational resources to build business resilience. 48 16. Defined as companies with less than USD 25 million in annual revenue. 49