Background

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As global supply chains continue to face scrutiny over labour rights, environmental degradation, and supply chain transparency, the need to incentivize fair and responsible sourcing practices has never been greater. Sourcing relationships are often marked by deep power imbalances, short-termism, and a lack of accountability, leaving suppliers to bear the brunt of financial, operational, and reputational risks. Effective incentives, both financial and non-financial, are needed to sustainably shift norms and practices. 

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Panelists will present on how financial incentives, especially responsible contracting practices such as fairer commercial terms, timely payments, and risk-sharing, can prevent and mitigate human rights risks and violations. Panelists will also cover how non-financial incentives, including preferred supplier status or investments in supplier infrastructure, can be implemented in Asia. These mechanisms are intended to ensure buyers and suppliers share responsibility, liability and accountability in the sourcing relation, towards improving labor conditions. Beyond identifying which incentives are realistic for buyers and practical for suppliers, the session will also explore the enabling conditions needed to make these incentives truly effective.

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These issues will be discussed in the form of case studies from a variety of industries and regions. Fair Wear will showcase case studies from the garment industry that highlight concrete examples of responsible contracting and sourcing practices, including supplier engagement and fair contractual negotiations. BSR will present learnings and best practices across industries from a series of regional consultations held in Thailand and Malaysia in 2024 and the Ten Supplier–Buyer Engagement Principles, developed to strengthen collaboration and accountability in addressing human rights and forced labor in supply chains. A moderator will stimulate discussion and facilitate an interactive Q&A following the opening presentations to ensure audience participation.

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Key Objectives

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• Participants understand the importance of buyer-supplier incentives, both financial and non-financial, in shifting norms and practices in responsible sourcing

• Participants obtain practical guidance on financial and non-financial incentives can be operationalized across industries

• Participants grasp the ideal conditions for impactful incentives and can develop medium term strategies to attain those conditions

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Guiding Questions

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• What specific challenges do suppliers in Asia face in meeting buyer expectations regarding labor conditions, and how can financial or non-financial incentives directly address these challenges?

• Which incentives are realistic for buyers and suppliers to adopt, and what are the key operational steps for ensuring those incentives are sustainable and effective?

• What enabling conditions must be established within industries and Asian markets to ensure that incentives for fair and responsible sourcing lead to sustained improvements in labor rights and supply chain transparency?

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Format

• Classic Panel (60 minutes): The panel will explore how global brands and suppliers can use responsible contracting and targeted incentives to advance human rights in the supply chain. Panelists will cover case studies from the garment and other industries to demonstrate how buyers, suppliers, and sustainability professionals can partner on fair pricing, long-term commitments, and incentive structures that drive sustainable sourcing.

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Session Partners