Updates & Insights
Scaling Factory Support: The Social Compliance Imperative

From enthusiasm to frustration

Despite early enthusiasm, thirty years of codes of conduct and audit-centric programs have struggled to significantly improve labour conditions or workers’ lives. We (brands, suppliers and governments) are failing to adequately follow-up on and improve issues we are already aware of in a meaningful, lasting, and consistent manner.

This reality has been recognized by most stakeholders, including brands themselves, for well over a decade. Even governments that strongly encouraged the development and role of voluntary standards have lost faith and started legislating more transparency, real measurable action, and shared responsibility. We are operating in a new landscape highly affected by COVID supply chain disruption, evolving laws, and social media and NGO campaigns contributing to increased consumer awareness of Corporate Social Responsibility. Add to this the unquestionable and powerful role of the investor community along with the ever-growing number of ESG rating agencies that serve them.

For those of us old enough to remember, there was considerable excitement around the idea that global brands could use their own financial resources to audit labour conditions where governments could not, while leveraging their contractual buying power to require better treatment of workers. I recently watched Fair Labor Association (FLA) founder Auret Van Heerden’s Ted Talk where he summarized this clever market-driven idea. This video has been transcripted into twenty six languages and has nearly a million views, undoubtedly by many that shared his excitement, including me.

Since that time, a substantial amount of resources and effort have been spent to build this business-driven governance model—much of which has had a positive impact. However, it also exposed the complexity of the problem as well as the weakness of this top-down approach. Past enthusiasm has morphed into cynicism or outright criticism of our approach.

A case for change

Going on fifteen years, the ongoing drumbeat of critics, including brands themselves, is that we need to go farther and do more in order to meet the challenge. Whether it’s building safety, living wages, migrant labour, or engaging sub-tier suppliers, the bar is constantly being raised. However, a true shift in approach and outcomes has failed to materialize. From my view, the reasons for this are clear.

  1. Symbolic adoption. This is a massive problem for brand social compliance programs, but a reflection of the brand programs themselves. As Sarosh Kuruvilla compelling points out in his book “Private Regulations of Labor Standards in Global Supply Chains – Problems, Progress, and Prospects”, most brands’ code of conduct programs and how they have been implemented represent little more than symbolic adoption. Therefore, we should not be surprised to find factories that sign such codes of conduct in an equally symbolic manner.
  2. Lack of localization. In order to expose risk and drive improvement, brand programs must be flexible and able to process the unique, local nuances that exist in each country (and between countries). At Mosaic we call this “program localization”. Such localization needs to inform and permeate all aspects of a brand’s program, including how it screens, engages, audits performance, and supports supplier improvement. We strongly believe there is a direct correlation between a brand’s ability to localize their program and the improvement impact they have—brands that have their own local staff understand this.
  3. Misappropriation of resources. Audit programs are not improvement programs. Yet we continue to pour the majority of resources into audits of one kind or another as if they are. It’s estimated that we spend 90% of our time and resources on supplier measurement and a mere 10% on incentivizing and supporting suppliers. While the movement to reduce audit-fatigue in the name of redirecting resources toward improvement support builds steam, there lacks a tangible bridge or method to reallocate such funds.
  4. Fragmented capacity-building service providers. There is no centralized marketplace where suppliers or brands can go to understand all the different types of resources and programs that exist. Once again, unless a brand has a localized program supported by local staff, it’s very difficult for companies to switch gears and plug into such programs or services.

Why we built Mosaic RSR

I spent over twenty years as part of the social compliance machine that sprung out from the early, enthusiastic years. I have built countless top-down code of conduct programs across a variety of industries, managed hundreds of auditors and dreamed up and implemented training and capacity-building programs of all shapes. Some of it helped, some if it did not. However, my motivation to make a difference has remained as strong as my frustration with the slow pace of change. Mosaic was borne out of both of these motivators and created with the exclusive intention of promoting and supporting improvement.

Mosaic RSR is a first of its kind, IT platform purpose-built to give brands a way to localize their programs and provide scaled improvement support to suppliers. We do this by providing updated, country specific legal requirements and expert improvement guidance that is further supported by a local expert help desk. We provide instant knowledge for users on the move responding to daily issues in real time. For those deeper, more complex issues, Mosaic provides access to other resources that can help build deeper, long-term organization and process change. Mosaic is the home for all things improvement.

Harnessing the collective wisdom and experience of specialized local experts and using technology to cascade it to the many is a tried-and-true vehicle of change. By bringing a mosaic of localized expertise, content, programs, and partnerships onto one platform we can scale support for both suppliers and buyers on their journey to improve labour and environmental practices.