To improve sustainability in their supply chain Western companies predominantly pursue a strategy of

(a) requesting suppliers to contractually agree on complying with defined social or environmental standards,

(b) monitoring supplier compliance based on self-assessments or formal audits, and, in case of deviations,

(c) requiring the implementation of corrective action plans.

Simultaneously, companies, government organizations and civil society engage in various forms of capacity building in regions/sectors of high non-compliance.

Despite the many years and efforts invested into those activities, audit results indicate that supplier compliance with social and environmental requirements hardly reached the targeted objectives. Audits themselves face criticism upon their limited reliability and validity, suggesting that audits are often run under conditions that motivate biased and limited evaluations. The high number of audits conducted and the heterogeneity in the audit results require Western companies to build up substantial capacity and competencies for evaluating audits and to comprehensively follow-up on audit results with suppliers in all relevant interactions with them. These needs frequently exceed the allocated budgets, and responsibility is often unclear.

This project addresses the fundamental question: "How to shift today's predominant focus from requesting supplier audits to developing sustainable value chains?" It seeks to develop a hands-on tried-and-tested approach for business practice to effectively utilize monitoring and to embed it into comprehensive activities to ultimately establish compliance with social and environmental requirements in supply chains. This requires to better understand the prerequisites and associated actions that turn monitoring into persistent supplier performance improvement.