Supplier Code of Conduct Template: How to Create One in a Day
If a large customer has asked for your "supplier code of conduct," you're not alone. This document has become a standard requirement in supply chain due diligence, especially for companies selling into retail, apparel, electronics, or other consumer-facing sectors.
The good news: a supplier code of conduct is straightforward to create, even if you've never written one before. This guide will show you what to include, why customers ask for it, and how to draft one in a day.
Why Customers Request a Supplier Code of Conduct
Large companies are under pressure from investors, regulators, and consumers to ensure their supply chains meet ethical standards. They can't personally audit every supplier, so they require suppliers to have their own code of conduct—a public commitment to minimum standards in labor, environment, and business ethics.
When you provide a supplier code of conduct, you're essentially saying: "These are the standards we commit to upholding, and we expect our own suppliers to meet them too." It's both a statement of your values and a contractual commitment to your customers.
What to Include: The Core Elements
A supplier code of conduct typically covers four main areas:
1. Labor Standards and Human Rights
This section addresses how you treat workers. Key commitments include:
No child labour: You don't employ anyone under the legal minimum working age (typically 15-16, depending on local law). For young workers legally employed, you provide appropriate protections.
No forced or compulsory labour: All work is voluntary. Workers are free to leave with reasonable notice. You don't withhold identity documents or require deposits.
Fair wages and working hours: You pay at least the legal minimum wage (or living wage if you're aiming higher). You comply with maximum working hour regulations. Overtime is voluntary and paid at the premium rate.
Freedom of association: Workers have the right to join trade unions or worker committees if they choose, and to bargain collectively.
Non-discrimination and equal opportunity: You don't discriminate based on race, gender, religion, age, disability, sexual orientation, or other protected characteristics. Hiring, pay, and promotion are based on ability.
Harassment-free workplace: You prohibit harassment, abuse, or corporal punishment. Workers have access to a grievance mechanism to raise concerns without fear of retaliation.
These commitments are typically based on International Labour Organization (ILO) core conventions and the UN Universal Declaration of Human Rights. You can reference these frameworks to show alignment with international norms.
2. Health and Safety
Customers want assurance that you provide a safe working environment. Key commitments:
Safe working conditions: You assess and control workplace risks, provide necessary personal protective equipment (PPE), and maintain equipment properly.
Emergency preparedness: You have fire safety systems, emergency exits, evacuation procedures, and first aid provision.
Training: Workers receive health and safety training appropriate to their roles.
Accident reporting and investigation: Incidents are reported, investigated, and corrective actions implemented to prevent recurrence.
For most suppliers, this section can simply state that you comply with applicable health and safety legislation and are committed to continuous improvement in workplace safety.
3. Environment
Environmental commitments demonstrate responsibility for minimizing your ecological impact. Key elements:
Compliance: You comply with all applicable environmental laws and regulations, including permits for emissions, waste, and discharges.
Pollution prevention: You minimize air emissions, water pollution, and soil contamination.
Waste management: You manage waste responsibly, maximize recycling, and handle hazardous waste through licensed carriers.
Resource efficiency: You seek to reduce energy and water consumption.
Climate action (increasingly expected): You measure greenhouse gas emissions and work to reduce your carbon footprint.
You don't need specific targets in the code of conduct itself—that comes later in your environmental policy or sustainability reports. The code of conduct is a statement of principles and direction.
4. Business Ethics and Governance
This section addresses how you conduct business. Key commitments:
Anti-bribery and anti-corruption: You prohibit bribery, kickbacks, or improper payments to gain business advantage. This applies to dealings with customers, suppliers, and government officials.
Conflicts of interest: Employees and managers declare potential conflicts of interest, and decisions are made objectively.
Accurate records and reporting: You maintain accurate financial records and don't falsify documents or certifications.
Intellectual property: You respect the intellectual property rights of others and don't use counterfeit or unauthorized materials.
Whistleblowing mechanism: Employees and stakeholders can report concerns about unethical behavior without fear of retaliation.
Data protection and privacy: You handle customer and employee data responsibly and comply with data protection regulations (like GDPR in Europe).
Fair competition: You compete fairly and comply with competition law (no price-fixing, market manipulation, or anti-competitive agreements).
5. Supply Chain Responsibility (Optional but Recommended)
Many codes of conduct include a section on extending these standards to your own supply chain:
"We expect our suppliers to uphold the same standards outlined in this code of conduct. We communicate these expectations to suppliers and consider ESG factors in procurement decisions."
This shows customers you're not just complying yourself but cascading responsibility down the supply chain.
Referencing International Standards
Most supplier codes of conduct reference established frameworks to show alignment with global norms. Common references include:
ILO Core Conventions: Eight fundamental conventions covering freedom of association, collective bargaining, forced labour, child labour, and discrimination.
UN Universal Declaration of Human Rights: Foundational human rights framework.
UN Global Compact: Ten principles covering human rights, labour, environment, and anti-corruption. Many companies state alignment with UNGC principles.
OECD Guidelines for Multinational Enterprises: Standards for responsible business conduct in areas like human rights, labor, environment, and anti-corruption.
You don't need to be formally certified or audited against these frameworks—simply stating that your code is "informed by" or "aligned with" ILO conventions or UNGC principles is enough to demonstrate credibility.
How to Create Your Code of Conduct in a Day
Step 1 (Morning): Review 2-3 supplier codes of conduct from companies in your sector. Don't copy them word-for-word, but use them as templates to understand structure and language. Many large companies publish their supplier codes on their websites under "Sustainability" or "Responsible Sourcing."
Step 2 (Late morning): Draft your code using the sections above as a guide. Keep it to 2-4 pages. Write in clear, plain language. Don't include commitments you can't actually meet—honesty matters.
Step 3 (Midday): Add a section at the beginning with your company name, effective date, and a brief statement from leadership (e.g., "At [Company Name], we are committed to conducting business ethically and sustainably. This Supplier Code of Conduct sets out our commitments to our workers, communities, environment, and business partners.").
Step 4 (Afternoon): Add references to relevant frameworks (ILO, UNGC, OECD) if appropriate. Include a statement about compliance monitoring and continuous improvement (e.g., "We regularly review our practices to ensure compliance with this code and seek continuous improvement in our ESG performance.").
Step 5 (Late afternoon): Have your senior management review and approve. Get a signature from your Managing Director or CEO to show senior leadership commitment.
Step 6 (End of day): Publish it. Save it as a PDF, post it on your website (if you have a sustainability or about us page), and file it where you can easily share it when customers request it.
Example Opening Statement
"At [Your Company], we believe that business success is inseparable from ethical conduct and environmental responsibility. This Supplier Code of Conduct outlines our commitments to fair labor practices, health and safety, environmental stewardship, and business integrity.
We are committed to upholding the principles of the UN Global Compact and the core labor standards of the International Labour Organization. We expect our suppliers and business partners to share these values and work with us to create a responsible and sustainable supply chain.
This code applies to all our operations and is reviewed annually to ensure it reflects evolving best practices in responsible business."
What Happens After You Create It?
Creating the code is step one. Implementing it involves:
Communicate it: Share it with employees, especially managers and procurement staff. Include it in employee handbooks or induction materials.
Share it with customers: When ESG questionnaires ask for a supplier code of conduct, provide it.
Extend it to your suppliers: Share it with your key suppliers and consider adding code of conduct clauses to supplier contracts.
Review it annually: ESG expectations evolve. Review your code each year and update as needed.
Live it: The code is only valuable if it reflects actual practice. If you commit to fair wages, ensure you're paying them. If you commit to waste reduction, actually track waste.
Storing and Managing Your Code of Conduct
Once created, you'll reference your supplier code of conduct frequently—in customer questionnaires, RFPs, audits, and supplier communications. Tools like ESG Passport help suppliers store their code centrally and link to it when answering ESG questions, saving time and ensuring consistency across multiple customer requirements.
Final Thoughts
A supplier code of conduct isn't corporate theatre—it's a practical tool that signals to customers you understand supply chain responsibility and are committed to basic ethical and environmental standards. For small and mid-sized suppliers, you don't need a 20-page document written by lawyers. You need a clear, honest, 2-4 page statement of your commitments that you actually follow. Start with the template structure above, customize it to your business, get leadership approval, and publish it. You can refine it over time as your ESG maturity grows, but having a solid version one is far better than having nothing.