How to Protect Core Image of Bicycle Industry?
OSTERMUNDIGEN, Switzerland – The Responsible Sport Initiative (RSI) is initiated by the World Federation of the Sporting Goods Industry (WFSGI) in order to help bicycle companies efficiently implement unified corporate and social responsibility standards. Why is this important and why is it beneficial to the industry? Two insiders explain the ins and outs of the Responsible Sport Initiative.
“We have to take our responsibility and look at the factories where we source. Next to a moral obligation we have to do this in order to protect our core image as a green industry,” explain Corporate Social Responsibility (CSR) managers Erik van der Hout (Accell Group) and Marc Magnus (WFSGI). “The Responsible Sport Initiative (RSI) is a collaborative CSR approach not only open to bicycle companies that are WFSGI members; also companies that are not a WFSGI member are encouraged to take part. In particular as that brings shared costs and avoids overlaps in factory-audits.”
Is auditing suppliers still necessary in the 21st century; are the times of child or even slave labour long gone?
“Corporate responsibility does not stop at child and slave labour. It is evolving over time and also differs geographically. For example child labour is more likely to be found in certain countries than in others. Modern slavery is still a thing, the UK for example has recently put into force the ‘British Modern Slavery Act’. Today we especially see challenges around working hours with workers doing overtime to earn more.”
Is all this mandatory; is there a EU law that stipulates that every company must live up to social responsibility standards?
“Corporate responsibility is going beyond the legally binding law. However, audit questionnaires do cover issues that are legally required by local national laws. The reason therefore is, that in some countries the legal enforcement is not guaranteed. The before mentioned modern slavery act is an example where a country is requesting companies domiciled in its territory to follow regulations when doing business abroad. Besides there is a wider range of stakeholders requesting companies to comply with working standards. While governments are one of these stakeholders, there are also consumers, civil society, NGOs, business partners, employees, etcetera.”
For which companies is this important? Only for the big ones? Who are you targeting with the Responsible Sport Initiative?
“Corporate responsibility does not depend on the size of a company. However, we have identified that it is more challenging for smaller companies to actively audit their supply chain due to a lack of commercial leverage. This fact has been taken into consideration while the RSI was developed. As an entry level auditing solution, the RSI is especially interesting for smaller companies as well. They can choose to outsource the audit administration if in-house capacities or expertise are limited. Finally, the RSI as an industry solution offers all participants an increased leverage: by jointly applying an auditing mechanism, also smaller brand companies with the support of the larger players are more likely to succeed with an audit request.
“Also, RSI is open to smaller brand companies that are not a member of the WFSGI. In particular as the strong point of RSI is to share the audit costs, jointly conduct corrective actions, speak with one voice to suppliers and avoid audit duplication. This is possible if there is what we call a factory overlap: at least two brand companies share one and the same supplier. “So, there is a vital interest for all RSI users to benefit from any possible factory overlap. To do so, we need to bring on board all brand companies who share relevant suppliers. Such brand companies might not necessarily be interested in joining the WFSGI. Therefore, we don’t want to make the WFSGI membership a hurdle for brand companies to join the RSI. Also, the RSI takes into account the sensitivity and confidentiality of members’ sourcing structures, it is of importance that the supply chains of the RSI users are not made visible to other RSI users in our system.”
What can you say about costs?
“The RSI system only accepts audits conducted by independent third party auditors. The fees charged by such audit service providers vary from about 1,000 to 3,000 euro per audit. Fees are dependent on a set of criteria: for example, the factory size defines how many worker interviews an auditor has to conduct and how many auditors have to be present; the location of the factory has an impact on the travel expenses of auditors; depending on the country the audit prices a different as well: an audit in Bangladesh is cheaper than one in Turkey.”
Are there any guarantees that audits really bring about a change at suppliers?
“RSI clearly isn’t a certification organization. An audit provides a snap shot. However, based on the audit findings RSI users will follow up with the factory on corrective measures. And then also the purpose is not to conduct one single audit but re-audits. It’s about implementing a long term auditing scheme. Next to that audits can also be unannounced. But, it is one of the aims of the RSI users to consider the suppliers as part of the solution. While creating awareness at this stage, we wish also to explain suppliers their benefits of a joint auditing approach.”
Where can interested companies apply for taking part in RSI?
“The RSI Secretariat is providing tailored introductory webinars for interested companies upon request. Any interested company can contact the RSI Secretariat at email@example.com on a non-binding basis of course.”
About Erik van der Hout and Marc Magnus
Erik van der Hout is Chair of the Responsible Sport Initiative (RSI) Steering Committee and Accell Group’s Corporate Social Responsibility (CSR) Manager.
Marc Magnus is WFSGI Vice President Trade, CSR and Legal.