Responsible Production & Consumption

Automotive Industry’s New Standard for Corporate Social Responsibility Demonstrates Commitment to Ethical Sourcing and Business Practices

Sep 23, 2016 6:40 PM ET

The automotive industry’s most widely used international quality standard (ISO/TS 16949) has been updated to IATF 16949 by the International Automotive Task Force (IATF). One of the most revolutionary updates to the standard is the inclusion of new ethics requirements, a first for automotive quality standards worldwide. Arriving at this monumental revision required extensive industry engagement; nine OEMs and five national automotive supplier associations agreed to incorporate corporate social responsibility requirements in IATF 16949.

The standard requires certified organizations to adopt social responsibility policies such as:

  • anti-bribery

  • code of conduct

  • whistleblower

According to Tanya Bolden, Director of Corporate Responsibility for the Automotive Industry Action Group (AIAG), the standard requires automotive companies to:

  • Provide documentation of an employee behavioral expectation code

  • A formal process implemented for reporting code violations

  • A published anti-bribery policy

In addition to implementing processes and procedures, suppliers must be audited and recertified for the new quality standard by IATF third-party certification entities; companies have until the end of 2018 to complete auditing and recertification.  Suppliers found to be out of compliance are subject to suspension of quality certification.

The inclusion of social responsibility requirements in AIAG’s new quality standard is part of a greater commitment by the automotive industry to ethical standards.  “Conformance to IATF 16949 ensures a company has the building blocks for adherence to AIAG’s Global Guidance Principles, a corporate ethics benchmark established by OEMs,” Bolden notes.

The risk of non-compliance with global quality standards is significant for automotive suppliers and manufacturers; companies face losing existing business and limiting access to new clients who choose approved vendors based on their conformance with AIAG quality standards.

As the authority on automotive standards for quality, supply chain management, and corporate responsibility, and with members such as Toyota, Honda, Chrysler, and Ford, AIAG’s commitment to corporate responsibility demonstrates the commitment of some of the largest worldwide automotive companies.

To stay abreast of these new standards, companies throughout the supply chain must ensure that they are able to implement ethical sourcing and corporate responsibility policies in compliance with IATF 16848 and complete auditing of their efforts by the end of 2018.

Affordable third-party solutions for anti-bribery, code of conduct, and whistleblower concerns are readily available for companies of any size, allowing companies to save time and resources on their efforts and receive guidance in uncharted territory. In addition, companies can easily gain access to services for other global standards and regulations such as Conflict Minerals reporting. Source Intelligence recently released a Conflict Minerals Reporting Brief for the Automotive Industry that can help you craft your reporting goals for the upcoming reporting year based on industry trends.

Source Intelligence will be attending AIAG’s upcoming IMDS conference on October 11 – 12, 2016, a premiere forum for automotive companies to learn about the latest regulatory updates, network, and discuss reporting requirements. Visit Source Intelligence’s booth to learn more about how you can expand your business opportunities or set the bar for corporate responsibility.