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Are you confused what these things have to do with your small business or what kinds of practices they expect to see, and overwhelmed with the prospect of having to apply them in your business when you're already stretched?
Then you're in the right place. Read on to understand what this all means and get started with some free resources to help you respond.
Large businesses are increasingly requiring their suppliers to comply with new expectations around environmental, social and governance (ESG) practices. In fact, 78% of ASX50 and 64% of ASX100 companies have implemented a supplier policy or code of conduct that requires suppliers to meet ESG standards beyond legal requirements (as of Jan 2020). Government organisations at all levels are doing it as well.
You may have heard more and more large businesses making commitments like going carbon neutral, 100% renewable, zero waste, providing a living wage, etc.
This is because they recognise their customers want to purchase from and their employees want to work for a business that is acting responsibly and helping to create a better world. They are recognising it as a business opportunity as well as a moral responsibility.
Sometimes they are also driven by regulation, such as climate-related financial disclosures and the Modern Slavery Act in Australia or overseas.
As they make these commitments, they realise that a large majority of their impacts are actually controlled by their supply chain, or the suppliers who provide the products that they sell or use.
So they establish supplier policies / standards / codes of conduct that set out their expectations of supplier performance, and usually support these with a CSR / ESG / sustainability questionnaire (yes they have that many different names) to request information from the supplier.
These questionnaires help the buyer to evaluate a supplier's commitment and performance against standard responsible business practices such as fair work practices, health & safety, anti-discrimination, human rights, environmental management, community contribution, and anti-bribery and corruption.
I used to help these organisations implement these policies and questionnaires and evaluate their suppliers, so I apologise for my part in making your life harder. But I also am the right person to come to for help, as I know what they're looking for!
I had many smaller suppliers asking me, 'how do I improve my performance?' and 'where can I go to learn more?' But I was frustrated there weren't any good resources to point them to. So I decided to create them!
Your customers don't expect you to match the initiatives, commitments and reporting that large companies with large CSR teams are able to do. But they do expect you to have an understanding of what impacts and risks are most relevant to your business, commit to reducing them, put controls in place, and track your performance.
If you're not doing this, I'm sorry to say you're likely losing business. Your competitors who do demonstrate their responsible business practices are increasingly winning it.
The good news is, applying responsible business practices is likely to save you money as well as helping you bring in more revenue. Many businesses save 10-30% on energy and landfill costs within their first year of implementing environmental practices. You will likely also save money on human resources including reduced turnover and improved productivity from employees who are proud of working for a business doing the right thing.
Get a quick overview of your performance against expectations for your size and industry in each of the standard areas covered by typical procurement questionnaires.
In this guided process I will help you clear on what gaps you have, what actions to take, and where to prioritise your efforts. It is structured similarly to the self-diagnostic but goes into much greater depth and results in an action plan to improve.
Go beyond compliance to tap into the benefits and market opportunity of sustainability. I will work with your business to develop a strategic sustainability plan and focus areas tailored to your business goals.
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