Procurement

As businesses concentrate on their own activities, procurement is an often neglected area of Corporate Social Responsibility - yet one that can present similar socially responsibility opportunities and benefits.

  • Given the growth of the Fair Trade movement, does your business consider the type of coffee that your staff are drinking?
  • Do you approach Community Organisations or Social Entrepreneurs to bid for your contracts?
  • Are you aware of the practices of your suppliers and have you checked that these are ethical?

The above considerations are important in terms of CSR, but they are also significant in terms of your business' success and development:

Guilty by association

  • The goods and services that you buy will contribue to the quality of your own product - cutting costs in this area can incur costs in terms of lost sales.
  • Reputations have been ruined by association with suppliers whose unethical practices have been exposed.  The use of cheap labour or violation of basic standards can create negative publicity that your business may also feel the impact of.
  • Staff can become demoralised if they feel that their employers are not taking on their responsibility or are permitting unethical practices.

Taking responsibility

  • Placing undue pressure on a supplier to cut costs to an unrealistic level can lead to them engaging in unethical or irresponsibile behaviours. 
  • Forcing a supplier to accept a price that is not sustainable could cut off a provision that your business has become reliant on.
  • Late payments can force suppliers to resort to unethical practices and places unnecessary pressure on them.

Working together

A partnership approach, involving prompt payment of invoices, supplier's involvement in resolving pricing issues, reviewing complaints and flexibility, can lead to:

  • Improved security of supply
  • Reduced trading and reputational risk
  • An ethos of responsibility and partnership that can extend beyond the immediate relationship.

Process

The Government's 'Funding & Procurement' Compact Code of Good Practice includes the following principles, which should apply at all stages of the financial relationship between the Public Sector and the voluntary / community sector:

  1. Focus on Outcomes as a key indicator of the success of funding.
  2. Timeliness - allowing time for planning, decision making and action.
  3. Discussion and Dialogue - to build trust; identify and overcome problems before they impact on the delivery of outcomes.
  4. Empathy - understanding each other's needs and requirements should help avoid problems and help achieve outcomes.

Procurement ToolKit

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