“Businesses can use their core procurement spend to make the world a better place”, according to the boss of Social Enterprise UK
As consumers become increasingly conscious of the social and environmental good that companies deliver, sustainable supply chains have never been more important. Martin Woodford, director of corporate development and governance at Motorola Solutions UK, discusses.
It’s increasingly common knowledge that business success is only possible by delivering long-term value to all stakeholders, not just financial returns.
Consumers and the general public are demanding that businesses do more to take responsibility and have a positive impact in their communities. Meeting shareholders’ demands is no longer enough.
Business plays a vital role in the economy, delivering innovation in products and services and serving customers, but it can and should also play a wider role in society.
In the communities in which they operate, businesses can help their employees to flourish by helping upskill individuals, providing a positive working environment with opportunities for personal progression.
This can create partnerships with suppliers, building relationships for the long term, where there are net benefits for both sides.
Employees are becoming agents of change for businesses
Employees are increasingly looking for work that provides a sense of purpose, something that is particularly true of younger people who have recently entered the workforce.
They want companies to be a source of high-quality information about issues that affect their industry and are much more willing to hold senior leadership to account than has been true historically.
With the ubiquity of online reviews and social media platforms, employees have a greater voice than ever before and there are numerous examples of that being exercised.
In addition, staff will look to their CEO and other senior executives to speak out on broader societal issues.
There is mounting evidence that this has a direct impact on business performance.
Employees’ happiness is a key indicator of a company’s level of trustworthiness, and it’s now clear that this has a bearing on attracting talent, as well as purchasing decisions.
In the current business environment, companies that can demonstrate a positive social impact have a clear competitive advantage over those who don’t.
Value of sustainable supply chains
A key element of having a positive social impact is the manner in which companies deal with their suppliers and wider supply chain. Given rapid globalisation, supply chains are highly complex, stretch across borders and include a vast number of companies.
In some instances, there is no direct relationship, but where there is, business creates most value in the long term, when they have a relationship which looks to the future rather than the immediate.
This means ethical purchasing, standards for environmental impact, and employee welfare.
For example, Motorola Solutions along with many other businesses have partnered with Social Enterprise UK by signing up to the Buy Social Corporate Challenge, committing to opening up the company’s supply chain to social enterprises.
According to Peter Holbrook, chief executive of Social Enterprise UK, “businesses can use their core procurement spend to make the world a better place”.
The importance of corporate social responsibility
In the UK, there are about 100,000 social enterprises, set up to trade for a social or environmental purpose and the Buy Social Corporate Challenge, currently in its fifth year, is aiming to achieve a total spend of £1bn with social enterprises.
This has meant companies such as BECO, a supplier of environmentally-friendly soaps that provides employment opportunities to the disabled and those with long term illnesses, have secured contracts with some of the largest companies in the UK.
These types of commitments in procurement require thoughtful planning and coordinated efforts from big business but can result in significant impacts when considered in total.
It is already expected that companies have a clear idea of how they will engage with employees and customers but they can go much further and plan for maximising the benefits to stakeholders in the supply chain and the wider community.
Often, supply chain decisions are driven by cost or simply inertia. However, by auditing supply chains, companies will find areas where they can make purchasing decisions which maximise value for the wider community.
It is possible to build a community ecosystem of suppliers, customers and partners, bringing in employees who will often have causes that they care about and support outside of work.
Working with Social Enterprise UK and its member organisations is an excellent first step, and a concerted effort from large companies can bring about meaningful change.