Managing Procurement’s Social Responsibility: How are social responsibility initiatives affecting the supply chain?

Social responsibility is a growing concern for the modern generations, organizations must meet this concern by monitoring and reporting the success of social responsibility initiatives.

With growing ESG reporting compliance, procurement teams need to ensure that environmental and governance initiatives are in check, but also their social responsibility initiatives and how this is implemented within the supply chain.

It’s not just the task of forming social responsibility initiatives but dealing with the data management that comes with this: ensuring sourcing is ethical, that diversity and inclusion initiatives match, but also that these social initiatives don’t break the organization’s bottom line or utilize too many resources.

In this blog we will explore what social responsibility is in procurement, how it affects the supply chain, what procurement’s responsibility is, and how Scanmarket by Unit4 can help organizations monitor their social initiatives for success – keep reading to find out.

What is social responsibility?

Social responsibility is the ‘S’ of ESG (Environmental, Social, and Governance) reporting compliance, and is increasing in importance as stakeholders, investors, and regulatory bodies take greater interest in quantifying an organization’s approach to these non-corporate objectives.

Put simply, investors and those with vested interest want to know their investments into an organization are ethical and not just based on financial gain, but that they support organizations who got the extra mile to have positive effect on their operating environment and those it impacts.

CFOs are taking particular interest in fulfilling their ESG reporting compliance to ensure that a financial investment into their organization isn’t affected by failure to comply with social responsibility.

Moreover, with large enterprises, modern consumers will also take a particular interest in social responsibility and ensure that their own money is not going to the wrong places. Organizations now more than ever must ensure they can report on social initiatives to customers, as well as governing bodies and investors.

What is Procurement’s responsibility in reporting on social responsibility?

Social responsibility, as one of three ESG factors, encompasses how challenges such as labor rights, anti-corruption, fair compensation, ethical sourcing, and more, are resolved in the supply chain by procurement teams.

As geopolitical factors continue to affect the supply chain, procurement teams need deep insight into not just sourcing, but how they treat employees and customers. They need a digital data solution to ensure they can report on initiatives, and they don’t impact finances negatively.

A recent Market Study by Dresner around ESG initiatives found that the Manufacturing industry has some of the highest current ESG reporting (47% already reporting), demonstrating that the responsibility of procurement to report supply chain effects on ESG compliance and the high competition in this area already.

Equally, large enterprises have the most to lose - Dresner notes that “Organization size is the main factor driving ESG adoption. Large, and very large organizations are the most likely to be affected by environmental, social, and governance issues, and the reputational impact of these issues should be considerable for major brands.”

Notably, this also demonstrates the level of competition in this area, while social initiatives have their own merit, they are becoming a competitive differentiator for large enterprises. Those who cannot report and monitor the success of these initiatives may lose favor with the public and struggle to regain their position.

How can Scanmarket by Unit4 help you monitor the success of Social Responsibility initiatives?

Ethical sourcing revolves around selecting suppliers and products based on criteria that extend beyond cost and quality considerations.

Scanmarket enables the data management needed for large enterprises to engage suppliers, manage initiatives themselves, and also ensure that spending matches, so you can procure with purpose.

• Scanmarket’s eRFx solution enables procurement teams to set specific parameters that ensure you are reaching the suppliers you want, and to ensure you don’t engage the wrong suppliers.
• Scanmarket’s eAuction platform means auctions can be structured to prioritize suppliers that add to social responsibility initiatives.
• Our Supplier Management solution can provide the visibility of your current suppliers, helping you to evaluate where initiatives can have the most effect.
• Scanmarket’s Spend Analytics module allows organizations to monitor their progress towards initiative goals, ensuring they aren’t just agreed but can be financially qualified.

To learn more, visit the Scanmarket website, and talk to sales today!