Within every organisation there are people who have the potential to do enormous good. If you are a buyer and ever doubted your value to your company and society, think again; and consider joining one of GCX’s upcoming ethical procurement training workshops.
Procurement professionals influence their organisation’s purchasing ethics and behaviour. They have the ability to select and work with suppliers, to improve efficiencies, reduce environmental impacts and enhance financial and social contribution. A 2015 World Economic Forum study indicates that promoting sustainable supply increases revenues (by 5 – 20%), reduces costs (by 9 – 16%) and boosts brand value (by 15 – 30%).
Ethical procurement aims to progress social and environmental performance, while not compromising on quality and price. Unilever, for example, has set some ambitious goals and is well on its way to meeting them. By 2020 (starting in 2010) they plan to double the size of their business, while halving environmental impact and improving the health and well-being of more than 1 billion people. This is not just for their own operations, but covers their full-value chain – from source mine or farm through to customers using their products. Nike, Walmart, Marks & Spencer, H&M and many others are pursuing similar ambitions.
In the EU, a 2011 study estimated that already 26% of government purchasing contracts included a full range of ethical purchasing criteria; and estimated this to reach 76% by 2016. Most states in the USA are implementing similar programmes. In the private sector, according to a 2014 study by Ceres, 58% of the world’s largest companies have introduced a supplier code of conduct on their way to setting up comprehensive ethical procurement programmes.
Benefits of these initiatives include improving energy, water and other input efficiencies; driving business model, product and service innovation; strengthening supplier, customer and other stakeholder relationships; building supply chain and organisational flexibility; differentiation; motivating employees; reducing risks and enhancing resilience.
However, these changes mean that most procurement professionals are faced with having to learn a new range of expertise. The UK Learning and Skills Council some years ago undertook a study that showed that while as much as 90% of buying professionals recognised the need for ethical purchasing, 80% did not yet understand how to do this.
In South Africa ethical procurement is still embryonic. While our country’s focus on BEE’s preferential procurement is an important aspect of better procurement practices, there are many other opportunities that are being ignored.
If you are interested in using procurement as a means of ‘innovation for good’ and to build financial and broader shared value, consider registering for one of GCX Africa’s Procurement – Ethical and Optimised courses in Cape Town on 29 October 2015.
Written by: Robert Zipplies