Stakeholder Pressure on Modern Slavery and Environmental Risks Is Driving Action by Procurement Officers

November 20, 2019 EcoVadis ‏‏‎

We were delighted to bring over 50 CPOs and senior procurement and sustainability executives together in London for our Sustainable Procurement Business Briefing earlier this month. Earlier this fall, representatives from the likes of ASOS, the Bank of England, SSE, HSBC, Pearson, BAT, WPP and BP joined industry thought leaders and EcoVadis executives to discuss how to proactively and efficiently leverage sustainable procurement to drive a resilient supply chain. Sharing insights, experiences and views on the goals and challenges in sustainable procurement. 

Phil Bloomer, Executive Director of the Business & Human Rights Resource Centre kicked off the morning, offering a wake-up call on the topic of modern slavery. Mr. Bloomer highlighted the fact that insufficient action is being taken to address the problem citing research indicating that in the UK, for example, only 23 percent of companies meet the very minimum requirements set out in the country’s Modern Slavery Act. Recommendations for closing the gap included increased supply chain transparency; strengthening due diligence processes; triaging investment of resources in engagement and training of suppliers by focusing first on high risk countries; engagement with workers and communities to understand the dynamics of the supply chain and the context, while large brands should collaborate to address modern slavery.

EcoVadis Co-CEO, Pierre-Francois Thaler followed with a discussion highlighting the significance of the supply-chain regarding exposure to sustainability-related risks - stating that 80 to 90% of organizations’ environmental exposure is in their supply chain. He identified a shift in how businesses are monitoring their CSR impact across the supply chain - from codes of conduct, self-assessments and auditing towards ratings and collaboration and, more recently, financial incentives. This marks a move away from the pass or fail, compliance and audit approach, towards supplier sustainability ratings - going beyond "ticking the box." This contemporary approach promotes more consistent performance monitoring, which encourages continuous improvement and supports value creation - thereby driving sustainable, innovative and resilient supply chains. The presentation drew on some industry examples to illustrate how change is being ignited in supply chains -  from BT, Microsoft and Nokia teaming up to combat human trafficking in supply chains to Apple and Alcoa’s joint venture, developing a new aluminum-making process that eliminates greenhouse gases. 

After a morning coffee break, we reconvened for our panel discussion. The session saw three procurement executives -- Robert Copeland, Group Procurement Director at G4S; Kevin Spiers, Group Procurement Manager at Belron International and Michael Nickson, Director of Procurement at Croda -- answer questions surrounding the importance of sustainability on their procurement agenda. When asked about their motivations for taking action, each panelist cited their own specific mix of stakeholder pressures. Mr. Nickson highlighted immediate and growing customer demand for demonstrable supply chain sustainability, which facilitated internal engagement within Croda. For G4S, investors and regulators also played a significant part, in addition to customers. Mr. Spiers identified customers, investors and employees as significant, stating that the firm regularly assesses whether they are meeting the expectations of these stakeholders -- Belron has linked bonuses to sustainability and reinvests profits in the local communities they work in. When asked about engaging a third-party such as EcoVadis rather than developing a sustainable procurement program in-house, Mr. Nickson said "if you can’t be the best, buy the best" and Mr. Spiers stated that ‘EcoVadis allows companies to do something well and do something quickly."

The morning drew to a close after a short presentation from EcoVadis’ Regional Manager for Business Development, Lazar Armianov, on the topic of managing 3rd-party cybersecurity risks.

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About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 190 purchasing categories and 150 countries.

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