- 31
- AUG
- 2010
CSR - That old chestnut or the future of procurement?
Author: Maggie Slowik - Categories: CSR & Green
As soon as one mentions the word CSR in the procurement community, a not uncommon response is: "That old chestnut, again ... " From a personal perspective, I'm not particularly fond of this dismissive phrase but, to be fair, I understand where it comes from.
After all, in our last CPO Strategy 2010 report, in which we analysed the issues and opportunities that CPOs are facing this year, "green procurement" received very little attention from chief procurement executives, an indication that it is currently not top on their agendas. Understandably, procurement currently has more critical issues to worry about, such as getting their supply chains back on track in this fiercely competitive economic environment.
And, aside from that, what is CSR anyhow? It means different things to different people - ranging from waste reduction, green travelling, supplier diversity, renewable energy to ... well, the list goes on and on.
Despite the complexity and confusion that surround CSR, it doesn't mean that it shouldn't be set aside as an unmanageable or unrealistic business concept. In fact, the PIU recently received some interesting feedback when talking to the VP of Purchasing at Toyota Europe. He made it clear that he is eager to get CSR right and "be good enough to be industry competitive" but he equally pointed to the challenge of finding robust research to support his mission. His wish list includes, amongst other things, benchmarking of CSR across different industries, examples of perceived CSR leaders and of successful CSR KPIs that other organisations use.
Similarly, a procurement executive from the NHS last week shared with me that CSR is big on the organisation's agenda: "The government comes to us with what we need to do but they don't always tell us how to do it, leaving it to us to figure it out."
These two examples clearly reflect that companies, whether private or public, need guidance on how to start building CSR into their supply chains. At some point in the future, CSR won't be "a nice to have" anymore, but it will be requirement made by governments.
For that reason, and also because I'm intrigued, I'm on a mission to build a bank of CSR case studies for our procurement community that help to share practice examples and hopefully, in some sort of way, will serve as an inspiration to those procurement professionals who strive to become innovative leaders. As I embark on this mission, I'm seeking to engage with procurement professionals regardless of industry, company size or geography to turn their success stories into case studies or simply to absorb their thoughts on the subject. If you should have any feedback or even suggestions on who I should speak to, please don't hesitate to email me at maggie@procurement-iu.com.
Comments
Graham via LinkedIn
Wed 8 Sep 2010 08:25
First of all, I'm pleased to see this isue being raised in this forum. Secondly, it shows that there's a huge gap between what a brave few of us are doing in the specialist field of "sustainable procurmement" (or, if you prefer, "responsible procurement" or "green procurement").
It's clear that the public sector and the private sector have quite diffrent drivers in this area. For private sector organistations, you're right to say it's largely CSR and for public sector organisations, again as you point out, there are drivers coming from both government and the EU (anyone heard that the EU wants 50% of all public sector procurement to be "green" by 2010?).
Mike via LinkedIn
Wed 8 Sep 2010 08:26
Graham
I'm not sure that the adjectives 'sustainable', 'responsible' and 'green' as qualifiers of the noun 'procurement' are interchangeable in the way you describe.
John Elkington's 'Triple Bottom Line' featured environmental, economic and social/ethical factors as the three key components of 'sustainable procurement', yet many organisations cherry-pick one, or at best two, of these aspects to attest to a virtuous approach to procurement.
The reason why it is so difficult to do, and so rare to find exemplar organisations in this field in either the public or private sector, is that the task of rationalising the three dimensions satisfactorily is so complex, because they are often in conflict and because the drivers for each are so different and challenging to synthesise.
Our work for CIPS has developed a means of tackling this challenge, ensuring that the full dimensions are identified, and finding ways of embracing and managing all the conflicting aspects of 'sustainable procurement'. This approach takes the requirements of a sustainable approach as defined by the TBL, aligned to and delivered by best practice procurement tools and techniques.
Mark via LinkedIn
Wed 8 Sep 2010 08:26
It's really a shame that there could actually still be debate over the issue of "old chestnut" vs "future of procurement." It's like asking "is responsible and ethical behaviour in business an 'old chestnut'?" No one should ever pose this question! The potential costs of irresponsible and/or unethical practices, in any business or function, are too well documented. The real question remains HOW to best institutionalise CSR within Procurement - this requires proper definition, measurement, and sharing of best practice.
Bernard via LinkedIn
Wed 8 Sep 2010 10:48
Mark, thank you for your succinct response, I wholeheartedly agree that the question should be how and not why.
In both my Private and Public Sector experience I have encountered different drivers which lead to the same results, specifically for the organisation to protect, and if possible enhance, its reputation with respect to the environment or social/ethical factors.
With respect to the third element, the 'economic' issue, my personal opinion is that this is more about the total acquisition cost rather than the invoice price. As such, economic factors should be addressed as part of the procurement strategy by considering KPI's such as response time, cost of fuel and logistics as well as environmental/social factors.