Evaluation gaps, challenges and implications: Responsible business initiatives for sustainable supply chains?

By Valerie Nelson, Michael Flint and Adrienne Martin

Evidence on voluntary sustainability standards effectiveness and impact is strengthening, but little evidence exists on the efficacy of growing numbers of Responsible Business Initiatives (RBIs) which focus on entire corporate sustainability. Some are mature (e.g. corporate codes), others are more recent (e.g. sectoral multi-stakeholder initiatives, supplier capacity strengthening approaches, benchmarking initiatives, mobilizing investors). But quality evidence and rigorous synthesis is generally very thin across the board.

Internally, many companies are already innovating on sustainability to a greater or lesser degree. Some make strategic changes with respect to sustainability performance, but the competitive pressures of globalized value chains remain very strong. Hence, becoming more responsible is not a straightforward task for brands and retailers, especially those in mainstream and/or highly competitive markets, or involved with south-south trade and the expansion of Asian markets, where attention to sustainability issues and market demand for sustainable products and companies is less pronounced and more uneven. RBIs aim to push, pull and inspire companies using different mechanisms to increase corporate performance on sustainability, but is this working?

In 2016, NRI began to evaluate the DFID ‘Responsible, Accountable and Transparent Enterprise’ (RATE) Programme, which sought to improve corporate impacts on affected poor workers, communities and environments, especially in developing countries. Various partner RBIs received core or programmatic funding (e.g. Global Reporting Initiative, UN Global Compact, World Benchmarking Alliance, B-Lab, ShareAction, Ethical Trading Initiative). Our team was tasked by DFID to work with all of the partners to support peer learning and enhance organisational theories of change and monitoring and evaluation capacity. At the programme level, we were tasked with assessing the combined outcomes and impacts of intermediary organisations on corporate practice, supply chains and workers, communities, and environments. This posed a number of challenges to generating evidence:


– It was not feasible to assess the impact of the supported RBIs on large parts of global business through a relatively small study; individual corporate case studies would be insufficiently representative.

– Variability in company and industry characteristics, drivers and contexts, means that a multiplicity of factors determine corporate practice. Corporate sustainability reports give some insights, but an early literature review showed that reporting is rarely easily comparable and available evidence focuses on policies, with limited evidence on resulting change in business performance and impacts.

– Experimental studies are difficult to construct, except on a small-scale and where simple interventions can be isolated, with other conditions controlled. This is not feasible in situations of complexity.

– Theory based evaluation is a more appropriate approach, involving tracing change along a causal pathway, but conducting theory-based evaluation of RBIs is challenging, because of the widespread lack of corporate transparency. While systematic analysis of company public policies is more feasible, going beyond this requires gaining access to internal corporate practices and decision-making to map the supply chain and trace causal linkages between corporate practices, supplier practices and ultimate impacts on the ground. Companies that are more open, have so far been ones that have a different basic ethos, meaning that they are not necessarily representative of the wider industry.

– Starting from the grassroots upwards, it is possible to conduct interviews and surveys of groups of workers and communities, but it is not necessarily possible to identify in which supply chains they are participating. Even if you can trace which company they work for, many suppliers supply diverse buyers. Ethical risks for workers of recriminations also exist. Overcoming such challenges may be possible through independent theory-based monitoring and evaluation, if and when transparency increases, but there is a cost attached.

Essentially, a generic RBI theory of change is this: diverse mechanisms and strategies are implemented by RBIs, leading to changes in company policies, capacity and practice, which then lead to changes in supplier capacity and practice, and to impacts on workers, communities and environments. In a recent chapter (Nelson and Flint, 2019) we distinguish three types of mechanisms that RBIs commonly use to try and change corporate practice. Enabling strategies facilitate companies to have the capacity to change. Pressure strategies seek to pressurize companies to change; Ideational or ‘ideas-based’ strategies involve changing societal and enterprise expectations about what is ‘good’ business and how it can be achieved. A newer wave of initiatives is more likely to deploy pressure or ideational strategies, than solely enabling ones. The risk is that such voluntary approaches alone, may mask inaction or de-legitimize other potentially more effective types of responses.

What are the implications of this lack of evidence? It is difficult to know if things are improving or even going in the right direction for individual companies, sectors, or industries in terms of outcomes for local people, communities, and environments. Evidence of cumulative impacts at the sector or industry level is missing and is weak for many sustainable landscape and sector-wide initiatives. We piloted a study in the RATE evaluation in the Bangalore ready-made garment sector, using the Sustainable Apparel Coalition Higgs Index indicators and using some simple qualitative scales. Initial findings were: ‘social performance is rated as low with no significant improvement over the past five years; environmental performance is also rated as low, but with some improvement over the past five years; some improvement in levels of support by brands for community CSR projects; and low, but improving, levels of supply chain transparency’ (Nelson and Flint, 2018 , p. iv).

More studies of this kind are needed – independent in nature, taking in the bigger picture and looking at social, environmental, and economic dimensions, but combined with more extensive empirical data. Change is coming; there are emerging monitoring frameworks to guide individual companies or multi-stakeholder area or landscape-based approaches, but it is uncertain how far the evidence generated will be independent and evaluative in nature. There are also risks that the framing of initiatives and their evaluation, prioritizes business perspectives and market values, over and above those of local people and communities, or intrinsic environmental values.

What is the end goal of supply chain sustainability interventions and responsible business and how do we know if they have been successful? Very often, corporate and responsible business rhetoric is highly positive, showcasing positive examples of progress and change. However, there is a disconnect when wider evidence is reviewed, (e.g. trends in violence against human rights defenders, the lack of progress on climate change mitigation etc). The COVID-19 crisis has thrown into sharp relief the different responses from companies to their supply chains, some positive and some highly alarming, e.g. some mainstream apparel companies cancelled all garment orders from suppliers in Bangladesh. Poor purchasing practices drive human rights abuses in supply chains, so the late cancellation of all orders will likely leaving thousands of workers unpaid and without sick pay, even if governments step in with some measures to support suppliers.

Interest and progress on legal interventions has grown recently, as a potentially stronger mechanism for changing corporate practice. An example is mandatory human rights due diligence (HRDD), such as the French Duty of Vigilance Law. The EU Justice Commissioner has just promised EU-wide legislation on this for 2021 (https://www.euractiv.com/section/global-europe/news/new-human-rights-laws-in-2021-promises-eu-justice-chief/). Such regulatory requirements are a critically important step forward for reforming supply chains and may also encourage or force some companies to change their underlying business models. But they are not ‘silver bullets’ – there is ample scope for poor implementation, for masking inaction, of potential exclusionary risks for disadvantaged workers and farmers in the global South (see Nelson, Martin-Ortega, Flint, forthcoming). Making HRDD work requires, amongst other things, independent worker and community driven monitoring on a very large scale across industries, public investment in independent environmental monitoring, strong commitment from governments for enforcement and policy coherence (e.g. integration in public procurement) and a strong civil society to hold companies to account. The competitive pressures which incentivise unsustainable and irresponsible business behaviours in the currently globalized economy. should not be under-estimated.

The question arises, should evaluation compare company performance with last years’ efforts, or that of peers, or instead have a future focus, asking ‘Where do we (humanity) need enterprises, sectors and economies to reach and by when?’ Such a focus will help to identify the combined sets of levers needed (mandatory, voluntary; reform-orientated, and more transformative). Some corporate focused initiatives already focus on the future (see Future Fit Business Benchmark, a strategic management tool to help companies think about where they need to get to, https://futurefitbusiness.org/). Realistically, many companies will find it difficult to achieve this on a voluntary basis because it means a thorough re-design of business models.

The ultimate end goal must be to transition towards economies that fit within environmental planetary boundaries and recognized social goals, but also, as made so clear by the COVID-19 crisis, that are re-configured to be more place-based, focused upon sufficient consumption, and embedded in local communities. Bottom-up approaches to economic development, such as Social and Solidarity Economy enterprises, have existed for many years and embed aspects of social and environmental sustainability in their business models, but scaling has been a longstanding challenge. Achieving positive sustainability transitions requires major shifts in mindsets, social norms, and in power relations, policies, and regulations, as a precursor to behaviour change amongst citizens, consumers, and enterprises. All kinds of future economic scenarios and visions are possible and are currently being articulated in response to the pandemic, given that prominent state interventions will clearly be necessary for some time.

More evidence on what works to reform global supply chains is needed from a sustainable development perspective. Future evidence on voluntary RBIs should focus less on corporate policies, and more on key practice oriented theory of change steps, e.g. company purchasing practices, but this still requires more transparency of supply chains. More focus on sectors and industries is needed, rather than on individual companies. Expanded national datasets are needed on actual outcomes in the supply chain (e.g. decent work, community empowerment, environmental indicators). Instead of focusing only on more visible, easy to measure issues, such as building safety, harder indicators should be tackled, such as living wages and incomes, which are key to the observance of human rights. Independent evidence is sorely needed, given the propensity of corporate actors to overstate or selectively report on performance. Giving voice to those affected, needs stronger support, through worker- and community-driven monitoring and in evaluation efforts. In addition, there is a need for more participatory work to imagine new economies that do not rely so heavily on global supply chains, and practical articulations of the mechanisms, levers, and approaches to get there.

Nelson, V, Leader of the Sustainable Trade and Responsible Business Programme, Livelihoods and Institutions Department, Natural Resources Institute, University of Greenwich
Flint, M, Independent Consultant
Martin, A, Director of Programme Development, Natural Resources Institute, University of Greenwich


This article was previously featured on Evidensia 

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