Responsible procurement: lasting results

Responsible procurement
June 4th, 2019
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For individual consumers, the idea that you can enact positive change through what you buy is nothing new. We're used to asking about how the products we want are made and how they are transported. There is already a powerful and rich ecosystem that informs our decision-making.

But when it comes corporate procurement, the trend as a thought-out and structured strategy is that bit more recent. In order for a CSR strategy to have real meaning, the procurement process needs to be overhauled. This overhaul means the procurement profession is front and centre, as it's the relationship with suppliers that has to be thoroughly re-evaluated, with the need to precisely and unquestionably document their commitment and results. To be recognised as a company with an exemplary CSR record, companies have to map out their entire value chain. 

The industry website Procurement Leaders, outlines four strong reasons why companies should rethink their strategy. The strategic imperative of developing a system for responsible procurement can only be achieved on two conditions: streamlining the supply chain and utilising digital solutions.  

Increasingly stringent regulations

With more and more laws just on the horizon, responsible procurement is becoming much harder to hide from. Although the 10 principles of the Global Compact[1] may only apply to companies that have signed it, there are still plenty of mandatory rules that have sprung up on every continent. The US Foreign Corrupt Practices Act, the EU's CSR reporting duty or France's corporate duty of vigilance law are three examples of the tight web that is governing the conduct of companies around the world.

What all these laws have in common is that they extend the responsibility of the main contracting party to its suppliers and subcontractors.

Increasing consumer awareness

A whole company's reputation is on the line when a factory fails to respect the basic principles of human rights in a foreign country or a subcontractor has little regard for the environment. Today, an oversight of just one of the elements in the value chain, played out on social media, will lead to an immediate backlash by consumers. Buying responsibly and being able to prove it adds to the value of the brand and the appreciation of potential end customers.

Opting for a smaller pool of responsible suppliers is economical

The traditional method of auditing suppliers and properly assessing thousands of suppliers based on many CSR indicators is resource-heavy. This assessment is simply not an option for small and medium-sized businesses. It's down to reputation-conscious companies and those committed to responsible procurement to choose a small number of partners who share the same values. Otherwise, they run the risk of introducing products or services into their value chain that are undermined by non-compliant actions.

Technology is effective in enhancing the robustness of the CSR chain

Digitising the supply chain allows systems to be implemented to detect non-compliant behaviour with regard to business ethics, respect for human rights or protecting the environment. Companies can make key decisions quickly to exclude less scrupulous players by identifying the risks involved with each supplier. Conversely, the same technology applied to the most committed suppliers strengthens local links within the ecosystem. Shared values and consistency of actions must truly inspire the actions of consumers.

The CSR category of the 11th Décision Achats Awards highlights the fact that all types of companies are involved in developing a sustainable procurement strategy. Community groups, service providers and manufacturing companies each have their own small part to play. And who wouldn't want to sign up to a sustainable strategy in today's uncertain climate!

 

[1] The United Nations Global Compact is the largest international voluntary sustainable development initiative, bringing together more than 12,000 participants in 170 countries

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