Business leaders are increasingly turning their backs on suppliers who fail to align with their social values, according to new research.
It highlights the profound effect the pandemic has had on procurement decisions, with the majority of respondents agreeing that the events of the past year had made it more important to consider using SMEs and to scrutinise environmental and diversity policies when selecting suppliers.
The survey, commissioned to mark the launch of Sodexo’s Social Impact Pledge 2021, shows that, while UK businesses are still placing a greater emphasis on factors such as cost and cyber security at the procurement stage, social values are increasingly featuring in the decision-making process.
Ninety-two per cent of those polled said they now vet suppliers on their social values and impact, and 75 per cent warn they would be put off by a prospective supplier that did not publish information about their social values.
There appears, however, some cynicism around social value with almost three-quarters of the 250 UK business leaders polled agreeing or strongly agreeing that businesses often have a social value policy in place but don’t necessarily follow it. This demonstrates the importance of transparent social impact accounting – evidencing and reporting on achievements.
it is a responsibility that extends beyond your own business to the organisations with which you choose to partner
Encouragingly, a strong proportion made it clear that they are prepared to offer their suppliers support to help them improve their standing and become more closely aligned with their own social values. Almost half said they are providing suppliers with education and training, and four in ten are providing financial support with a similar number offering mentoring.
Sean Haley, Sodexo UK and Ireland Regional Chair, said: “It is often said that you can tell a great deal about someone by the company they keep. This is also true for businesses. It is now clear that the ability to demonstrate a positive social impact is a non-negotiable.
“As this research clearly shows, it is a responsibility that extends beyond your own business to the organisations with which you choose to partner. While it can only be seen as a positive step that many businesses are becoming more demanding in areas such as environment and diversity, it is even more heartening to see how many are taking it upon themselves to help their suppliers do better. Business must be purpose-led and capable of directly improving the communities they serve.”
In February Sodexo, which employs around 30,000 people in the UK, launched its 2021 Social Impact Pledge which includes gifting up to 25% of its apprentice levy to SME suppliers ; enabling them to create 100 new apprenticeships; cutting food waste by 50% across all its sites by 2030; and ensuring 40% of the business’ spend is with SME and VCSE suppliers – above the Government’s own target of £1 in every £3.