CASE STUDY / AMP CAPITAL
ADVERT / GOVERNANCE
“Then there’s a component around improving compliance – what is good practice or best practice that can give a competitive advantage. What does amazing look like in the space of supply chain visibility? We've got that minimum compliance, good practice and exemplary list of measurements that we want to talk about through our engagement for each of those four categories.” State of Flux is also helping AMP Capital’s Real Estate business to establish a robust ongoing monitoring approach for each of the three suppliers beyond the pilot phase. By the end of the year, the business hopes to have completed the deep-dive engagement with its three selected high-risk suppliers and have a better understanding of their supply chain and a jointly created plan for remediation. The next step is to start all over again. “In 2022 we’ll pick another three, five, 10 suppliers to engage with and we’ll keep doing that every year. We'll get a lot better at it and have a better idea what to expect. We'll be more sophisticated in the types of questions we answer and ask, and the answers that we expect.” And while this project focuses on the modern slavery risks, Nunn expects the work to identify other environmental, social and governance (ESG) risks it can then start to manage – beyond what it is already doing. “I'm hopeful that examining modern slavery can be a kind of Trojan Horse for other ethical considerations, as well as embodied carbon and carbon emissions in the value chain, materials toxicity and shadow biodiversity impacts. It could go well beyond modern slavery,” says Nunn. For help with levels of ESG within your supply base, contact State of Flux at enquiries@stateofflux.co.uk
“We wanted it to be more than a documented process of quizzing suppliers and reporting what they told us, so we knew we needed someone with deep in-country expertise who could help us probe in more detail and guide our enquiries with our suppliers,” says Nunn. He says while many companies are taking a defensive approach to risk mitigation and aren’t really looking for slavery in their supply chains, they really wanted to make a difference and that means not being afraid of what they are likely to find. “A lot of people see modern slavery as a compliance issue, they want to know ‘what's the minimum I need to do in order to comply with the legislation?’ That’s not characterised by a strong ethic of care for the people who are suffering from modern slavery. It's characterised by ‘how do I get away with this with the least effort possible?’ “We're not just concerned with risk management and reputational defensive strategies. We really want to solve this problem in our supply chains and so decided to work with the right experts who can help us find it and work in partnership with our suppliers to do something about it.” For him, a supplier admitting they have found modern slavery in their supply chain is “probably a good answer” because it means they have investigated the issue closely enough to find it, they care enough to do something about it, and are brave enough to say, yes we found an issue and this is what we’re doing about it.
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Four-step pilot plan
For the suppliers AMP Capital selects to partner with, it plans to take a four-stage approach: 1. Exploring their supplier’s level of awareness of modern slavery and the extent of their visibility of their own supply chain; 2. Examining how they are assessing risk; 3. Asking suppliers what actions they have taken, or will take if they discover a risk – specifically who is assigned what tasks and whether they have a procurement team that is aware of the issues or has any human rights expertise; and 4. Collaborating with suppliers to see what policies and practices they have; what level of subcontracting exists within their chains; and what is their risk management or audit process. “Within each of those four areas, we expect there will be some quick-win progress from our initial engagement,” says Nunn. “For example, in the area of supply chain visibility, we can work together on mapping their chain and looking at what’s next in terms of really raising awareness.
Strategic suppliers have the highest potential to add value to your business. We can help develop your segmentation and treatment strategies to facilitate value delivery for both the short and long term. We will also help you to create a value-focused governance model that is aligned to your organisation’s overarching business objectives.
enquiries@stateofflux.co.uk srm.stateofflux.co.uk/2021-report
IMAGE CREDITS: AMP CAPITAL
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STATE OF FLUX
2021 GLOBAL SRM RESEARCH REPORT
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