The study’s purpose was to analyse the use of supplier codes of conduct as a supply chain governance tool and show that such codes can contribute to transparency in supply chain networks by helping define objectives and promote environmental, social and governance (ESG) developments.
The study involved examining 67 publicly available and randomly selected supplier codes of conduct of manufacturing companies from the electronics, vehicle manufacturing, healthcare and food sectors.
Supplier codes of conduct reflect the increasing complexity of social and environmental requirements while maintaining the ethical standards. Reactions to new challenges can be identified in the content of the codes. Many codes expect active development by suppliers and the communication of expectations to lower-tier suppliers. For setting environmental objectives, standards are important; the most influential reference point for the social elements of codes is recommendations from international organisations, while for ethical instruments, it is national legislation. Codes and related information can thus be an instrument for promoting ESG objectives and governance-related transparency in well-defined supply chains and a part of legitimacy-building efforts associated with a wider group of stakeholders. Industry-level differences are identified.
Recent literature does little to explore the role of codes of conduct in increasing transparency in supply chain governance and legitimacy efforts. This study contributes by constructing a research framework that helps investigate whether corporate codes of conduct make the activities of supply chain stakeholders more transparent and by providing evidence that companies are actively communicating with a wide range of stakeholders.
