A new report by Business for Social Responsibility says that companies working directly with factory managers to equip suppliers with skills, knowledge and systems to take ownership of corporate social responsibility issues are more effective in addressing persistent issues such as labor standards violations, environmental degradation, and poor health and safety protection.

BSR's "Pilot Summary Report: Building Capabilities to Implement CSR Management Systems at ICT Suppliers in China" is based on a series of recently completed pilot projects aimed at breaking through common barriers to improving factory conditions. Organizations in this collaborative project include BSR, the World Bank Group’s investment climate advisory service, the Foreign Investment Advisory Service, the Electronic Industry Citizenship Coalition, the Global e-Sustainability Initiative, and the Shenzhen Electronics Industry Association. In 2007, the collaboration published a report identifying the root causes of poor factory conditions, and providing recommendations for how customers, suppliers, government and civil society can all contribute to improved capacity among factories in China.

Based on findings from these reports and the recent pilot projects, BSR says there are several steps companies can take to build capacity in their supply chains:

Support multiple capacity-building strategies. Approaches can include providing generic tools, conducting training, creating supplier-support networks and implementing factory-specific projects.

Focus on the business case. To achieve buy-in from suppliers, identify real incentives and allow supplies to shape their own approach to CSR improvements within the factory.

Integrate a mentoring system into the monitoring process. Work with the supplier to identify root causes of compliance issues. This strengthens the relationship between the company and the supplier, shifting focus from immediate compliance to continuous improvement.

Foster ongoing dialogue among stakeholders. These include customers, suppliers, NGOs, local government and industry associations. This reinforces each group’s efforts, creating the potential for a much bigger impact on everyone’s CSR efforts.

Moving forward, BSR will apply these lessons to other industries and countries. "The challenges with capability building identified in these reports are not unique to the ICT sector or to China, and many of the recommendations can be applied to a wide variety of sectors and geographies," stated Laura Commike Gitman, BSR director, Advisory Services. "The project partners look forward to building on these lessons to help focus future capability-building efforts."

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