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When Procurement and Social Responsibility Converge

Nov. 16, 2020
Today’s procurement teams are well positioned to make positive, lasting impacts on the social responsibility front.

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With a bright spotlight shining on social responsibility right now, procurement departments can play an important role in helping their organizations meet their goals in this area. This isn’t new territory for the procurement space, which in 2019 was pulled into conversations concerning Brexit, the international trade wars and other potential geopolitical risks.

Recent examples of systematic racism, inequality and injustice have compelled more companies to have “very real conversations” with employees, business partners and external stakeholders about what they can do to address these issues, Givewith’s Paul Polizzotto observes.

“As executives identify ways to drive social progress, it’s important not to overlook procurement,” Polizzotto writes in Procurement with purpose must encompass social justice.”

“While procurement has traditionally been a critical agent for change when it comes to environmental issues — such as curbing greenhouse gas emissions, cutting waste, and sourcing recycled content — procurement can also play a critical role not only in protecting human rights but actually helping to advance them.”

A Growing Concern

Social responsibility is growing in importance in a world where a company’s charitable giving affects three-quarters (73%) of Americans’ purchase decisions, according to a new Mintel survey. The majority (84%) of consumers say it’s important to them that a company supports charitable causes, with some willing to take it a step further when corporate giving aligns with their own beliefs.

Half (50%) of Americans say they would switch to a company that supports a cause they believe in, rising to 61% of adult iGeneration consumers (aged 18-23) and Millennials (aged 24-41), respectively. Other key findings from the survey include:

  • The majority of consumers want companies to speak up and get involved. Less than half (42%) of U.S. consumers believe that companies should stay away from controversial causes, falling to 38% of adult iGens and women, respectively.
  • Nearly two-thirds believe it is a company’s responsibility to give back (65%) and to have a moral or ethical viewpoint (64%).
  • Around half expect brands to improve the local community (53%) and donate proceeds to charity (49%)
  • When it comes to the environment, although fewer than one in five (16%) Americans say they have donated to environmental causes in the last year, three in five (59%) expect companies to have environmentally friendly initiatives.

“Americans, particularly younger generations, are more attuned to philanthropic activity and aware of the various roles companies have to play in giving back,” Mintel’s Mike Gallinari explains, in a press release. “The vast majority of consumers want to see companies support charitable initiatives, with many caring enough to take it into consideration when they make a purchase.”

Steps in the Right Direction

The good news is that many procurement teams are already adopting practices to eliminate workforce exploitation in their supply chains, such as egregious slavery-like conditions, forced or compulsory labor, child labor and labor trafficking, Polizzotto point out.

“In addition to abolishing these practices, many leading sourcing teams have already done the work to identify, select and invest in diverse suppliers, helping them grow and stay afloat through preferred payment terms or helping them improve and evolve their products,” he writes. “While prioritizing diverse suppliers is critical, procurement teams should also make it a top priority to ensure their team is diverse too.”

Procurement can also help by identifying funding opportunities for nonprofits, social enterprises and NGOs (nonprofit organizations that operate independently of any government). “Procurement teams can leverage their immense purchasing power to help generate new sources of funding for organizations on the frontline addressing racial inequality and social injustice,” Polizzotto writes.

For example, procurement teams can “collaborate with suppliers to direct a small percentage of their total transactions to underwrite social impacts that fight systemic racism and social inequality through direct service, education, and advocacy work,” he suggests, adding that procurement teams are well positioned to make positive, lasting impacts on the social responsibility front.

“Sourcing and procurement teams have already identified ways to drive significant change as it relates to their company’s environmental impact,” Polizzotto concludes. “Now more than ever, procurement has the potential to be a key driver to advance other pressing social issues, not only because it’s the right thing to do, but because it benefits their business too.”

About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.

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