Sustainable procurement – “Social” sustainability

Whilst environmental sustainability and the related procurement issues can seen rather far away, what with rain forests and global warming (he said, writing this on a freezing June day with the rain pouring down outside), social sustainability combines the distant with the very close to home.

At one level, it is about avoiding suppliers in far off companies who exploit their workers, use child or slave labour. More locally, it can relate to helping disadvantaged people in your town, or supporting disability related actions, or promoting minority owned or simmilar businesses in your supply chain.

Coming back to our overarching theme, that this all has to be done for a reason, so why do these initiatives potentially make sense? There are two sides to this.  The first is around eliminating the potential negative.  In terms of risk, what within your supply chain could be vulnerability in terms of customer perception or worse? Raw materials coming from conflict zones  (‘blood minerals / metals’ as they are sometimes called).  A key supplier found to be employing 8 year old kids?

So managing your risk in these areas is a key role for procurement, and making sure our suppliers meet ethical standards is a key element of this. Indeed, understanding our suppliers is a theme that is building through our series on sustainability, and nowhere is it more relevant than here.

There are difficult issues though; an academic study looked at the effect of withdrawing, for all the right reasons, the home-based work (stitching footballs or similar) that kids in Bangladesh were doing for a few hours in the evening.  But they were at least going to school part time: take that work away and many ended up working full time in factories to help support the family. It is hard to apply moral absolutes and developed world standards to every country at every stage of their economic development.

But back to our hard headed approach; what is happening in your supply chain that you wouldn’t what your customers or consumers to discover? Too many companies still apply the out of sight, out of mind approach, and that isn’t good enough.

What can do done more locally? As times get tough in the developed western economies, while developing countries power ahead, I wonder whether we may become more positively inclined to support initiatives that help people closer to home.

It’s not that we shouldn’t worry about child labour in Bangladesh or 14 hour days in our Chinese supply chain. But maybe we should also look at the millions of unemployed in the UK, the families blighted by parental drug addiction, or disabled people who still can’t get employers to give them the chance to show what they can do.  My suspicion is that this sub-set of ‘sustainable procurement’ actions may grow in importance over the next few years, so it’s worth thinking now about what you can do within your own organisations and your supply chain to get ahead of the curve.

That can mean working with local social enterprises, encouraging minority owned firms to become suppliers, or supporting national organisations such as Remploy* who provide employment for thousands of disabled people, and help disabled and disadvantaged folk get real jobs in many organisations. It can mean buying directly from such organisations, or encouraging your major suppliers to do their bit as well.

The benefits in these cases can arise from different sources. For instance, Remploy win work totally on their own merits, based on quality and price.  We recently saw an example qiuoted by Cabinet Office of a social enterprise winning a major Revenue and Customs contract, fair and square.  Equally, the second order effect of having a good story to tell from a marketing perspective can be valuable; or if your firm bids for public sector work, evidence of your contribution to social sustainability can be a factor that works in your favour.

We’ll come back later in our series to a couple of interesting examples of how organisations are contributing in this area, and how they see it, both in terms of altruism and hard business benefits.

Declaration of interest - I was a non-executive director of Remploy from 2008-11.

Voices (2)

  1. Graeme Johnstone:

    Remploy and other social enterprises are only one route, among many, of achieving social sustainability in procurement. As another example of the Scots leading the way – An outstanding document was published by them in early 2008 (yes, over 3 years ago!):
    http://www.scotland.gov.uk/Publications/2008/02/12145623/0
    Will the rest of the UK please try to catch up?!

  2. Peter Duschinsky:

    Peter

    I wish I shared your opinion that sustainable social procurement will grow in importance over the next few years.

    As a co-delegate at yesterday’s show, I was underwhelmed at Stephen
    Allott’s attempt to show how the coalition government is championing the lot of the smaller companies who are being squeezed out of the public sector supply chain by a decade of aggregation.

    As I told Stephen at the event, this is not about favouring SMEs – it’s about the survival of local business communities.

    In a way I suppose I am not surprised that we lead Europe in disadvantaging SMEs… It could have been worse – most councils haven’t really taken control of their spend in the way that e-procurement promised in 2004 when I was intimately involved in helping local government recognise the importance and feasibility of considering the sustainability of their local business communities alongside the opportunity to cut procurement costs using the new technology.

    We now have a fresh generation of procurement managers operating in an economic situation worse than anyone in post has ever experienced. And an SME tzar who thinks that fielding a handful of tiny initiatives is making a difference.

    What then are the chances that common sense will prevail and they will recognise the cost of NOT supporting their local SMEs…? Don’t hold your breath.

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