Supplier engagement means working with your suppliers to find and address negative impacts on people and the environment, instead of only asking them to sign a document. Many of the most serious risks, such as forced labor or deforestation, are found deep in the supply chain, beyond the suppliers you buy from directly.

This article explains how to engage your suppliers step by step, how to reach suppliers beyond Tier 1, and what to do when a supplier does not meet your requirements.

Stakeholders ask about supplier engagement because their own due diligence covers their whole value chain, and your suppliers are part of it. 19 of the 20 topic assessments ask about it for their own topic, e.g. "Does your company engage with suppliers to identify and address actual and potential human rights impacts in the supply chain?"

The Human rights, Forced labor, Child labor, and Labor rights assessments also ask whether you engage suppliers beyond Tier 1. The Supply chain practices assessment asks how you communicate requirements to suppliers, whether you agree on corrective actions with them, and whether you follow up.

Engaging suppliers takes 5 steps. Start with the suppliers where your risk assessment shows the highest risks.

Tell your suppliers what you expect. Most companies do this with a Supplier Code of Conduct that suppliers sign, and with clauses in contracts. Ask suppliers to pass the same requirements on to their own suppliers.

Use your risk assessment to decide which suppliers to engage first, based on country, sector, and products. You do not need to engage every supplier in the same depth. Focus where the risks to people and the environment are highest.

Ask the suppliers you prioritized for information about their practices, e.g.:

When you find a problem, agree with the supplier on what to do and by when, often in a corrective action plan. Support the supplier where you can, e.g. with training, guidance, or longer lead times. Your own purchasing practices, such as prices and deadlines, can make it easier or harder for a supplier to improve.

Check that the supplier carries out the agreed actions, e.g. with new information, an audit, or a visit. Record what was agreed and what happened. This shows your stakeholders that your engagement leads to results.

You usually have no contract with suppliers beyond Tier 1, so you need other ways to reach them. Common approaches are:

If a stakeholder sends you a product mapping request in Worldfavor, the supply chain you map in your answer can also help you see your own suppliers beyond Tier 1.

When a supplier does not meet your requirements, the OECD Due Diligence Guidance for Responsible Business Conduct recommends staying engaged and using your influence to improve conditions. Ending the relationship at once can make the situation worse for the workers or communities affected.

Ending a relationship is a last resort, used when serious problems remain after attempts to improve them. If you end a relationship, do it responsibly, e.g. with enough notice, and consider the impact on the people affected.

How far down the supply chain you need to go depends on where your risks are. The OECD guidance expects a company to look as far as needed to find its most serious risks, which for some raw materials means going back to the farm or the mine. Start with your highest-risk products and go deeper step by step.

If your Tier 1 suppliers will not share who their suppliers are, explain why you need the information and how you will protect it. Include the requirement in new contracts, and ask for information about the countries and types of suppliers if names are sensitive. Certifications and industry initiatives can also give information without revealing names.

A small company can start by sending a Supplier Code of Conduct to its suppliers and asking the highest-risk ones a few questions. Working with other companies through industry initiatives gives you more influence than you have alone. The OECD guidance says that due diligence should match the size of the company and its risks.

No, following this guide does not by itself make your company compliant with any law. The guide describes good practice from the OECD guidance, for inspiration and general guidance only. Check the legal requirements that apply to your company, and consider asking a legal advisor.