Resources - Procurement

Corporate Social Responsibility does not stop at the office door! It also relates to the practices of your suppliers - and how you can support them in ensuring that these are ethical, environmentally friendly and socially responsible.

Top Tips

How can I tell if my supplier is behaving ethically?

  • Research suppliers before agreeing to contracts.  Visit their factories or offices and talk to employees.
  • Make sure that the figures add up.  If the quote is noticeably cheaper than competitors, ask why and establish how they acheive this price.
  • Consider carrying out a written questionnaire to check the conditions within your suppliers organisations.  You may like to ask about free choice (i.e. is employment chosen?); child labour; working hours; health and safety measures; anti-discrimination and equal opportunity policies and wages.

How can I encourage my supplier to improve their CSR?

  • Lead by example. The way that you treat your employees, suppliers and customers, should reflect the values and attitude that you expect them to demonstrate.
  • Raise awareness. Involve them in any CSR activities that your organisation is pursuing, for example, could they participate in team building exercises? deliver goods for voluntary sector organisations whilst delivering your goods? offer voluntary sector organisations a discount?
  • Ask to see any Corporate Social Responsibility or Environmental Policies that they follow.

Selecting a supplier on the basis of their commercial value - and then addressing their ethical practices - is an alternative route, but one that can be equally effective.  If there are any gaps in their ethical practices, work together to identify solutions and improve their social responsibility.

How do I incorporate CSR into my supplier selection criteria?

  • Decide on appropriate indicators and embed this approach into your organisation's policy.  You might like to consider: proximity (using local suppliers cuts transport costs and engages with the community); environmentally friendly working practices; reputation; employee feedback.
  • Don't ignore voluntary sector organisations.  If the service or product that they develop meets your needs, consider setting up a trading agreement.

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What is ethical sourcing and can small businesses benefit as well?

Whilst Fair Trade refers to a company's trading relationships, ethical soucing ensures that the labour standards across all levels of a good's production are adequate. It is predominantly concerned with human rights and labour conditions, more than the environment or community engagement.

  • Small companies are well positionned to practice ethical sourcing or trading as they often have a smaller number of external relationships, thus enabling them to monitor the practices of these agencies more closely.
  • Promoting ethical trading can differentiate between your organisations and your competitors. Ensure that all statements made can be backed up and have clear policies and procedures to demonstrate your efforts.

How do I write an ethical trading strategy?

  • Be clear about your objectives.  Take into account the size of your organisation, the number of other organisations that you interact with and the current relationships that you hold with these.  Look at resources (i.e. how much time you can dedicate to this? How much money you have to invest in training or other costs?).
  • Develop a code of practice or adopt a code of practice, for example, the ETI base code.
  • Communication is central - both within your organisation and with suppliers.  Ensure that all parties are involved and that you have management buy in.
  • Match buying with ethics! There is little point in having an ethical trading strategy that falls down because the price that you are prepared to pay suppliers is too low or suppliers are placed in a difficult position through late payments.

What is supplier diversity and how can my business benefit from this?

Supplier diversity is a term that has been used to refer to the different suppliers available to organisation and how these suppliers have equal access to contracts, and are able to improve an organisation's relationship with marginalised groups and local communities.

Supplier diversity is about taking positive and proactive steps to ensure that all suppliers are considered equally and that smaller or typically disadvantaged groups are engaged with.

The Benefits:

  • Encourages competivity
  • Encourages flexibility and variety
  • Better awareness of community and extension of market
  • Demonstrating CSR
  • Improving chances of winning public sector contracts (in line eith 1996 Race Relations Act)

The Process:

  • A co-ordinated approach: Ensure that all members of your organisation, from senior management to employees, are aware of and engaged with promoting supplier diversity. Identify an individual to lead in this process.
  • Survey suppliers: Review your existing suppliers to examine their diversity.  Are they a mixture of sizes? Is the gender or ethnic spread good? Where are suppliers located? Survey other suppliers to identify any agencies that would improve on your supplier diversity.
  • Review procedures and selection criteria: Identify barriers (complicated tendering processes or size of contract) and opportunities (sub-contracting to smaller organisations or starting with small contracts to test the partnership). Formalise procedures through new policies with clearly identified objectives.
  • Training: Develop awareness of diversity throughout your organisation.  Consider any skills that will be needed in order to make your workforce more responsive to a wider audience, for example, cultural awareness, improved accessibility, communication skills.  Identify opportunities for developing skills with your suppliers.
  • Develop relationships: Use new suppliers as the starting point for developing new networks.  Consider ways of building on the partnership.  Promote supplier diversity to other businesses.

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Useful Links

Business Link East 

The Ethical Trading Initiative

The Better Payment Practice Campaign

The Institute of Business Ethics

Forum for the Future

The Fairtrade Foundations

The Commission for Racial Equality

The Office of Government Commerce

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