Abstract

Multinational firms face many challenges in extending sustainability practices to their global supply chains. Establishing standards for environmental practices and working conditions for suppliers through codes of conduct, and then monitoring their performance with audits, is the common method used by MNEs. However, this approach has proven deficient in many cases as the suppliers are often not capable or unwilling to make the changes necessary to assure long-term sustainability of their operations. Audits often are insufficient in uncovering practices that do not meet the codes of conduct, and in any case, do not usually reveal if the firm is on a path to continue to improve their sustainability practices. Drawing upon the experiences of firms that have implemented productivity and quality improvement programs in their global supply chains, some implications for how to implement successful sustainability programs can be found. The challenges that MNEs and their suppliers must overcome to achieve this are discussed and suggestions made on how to achieve real sustainability in global supply chains.

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