Corporate social responsibility (CSR) is a business philosophy and practice that aims to integrate social, community, and environmental considerations into all business operations and stakeholder interactions. In terms of procurement, CSR strategies often revolve around demonstrating ‘social value’ in public procurement; in other words, conducting procurement practices ethically, minimising any negative impacts, and contributing positively to communities.
This article addresses the question ‘why is corporate social responsibility important in business?’, and how the CSR movement impacts modern procurement practices.
Balancing Profit With Social Value
Modern Corporate Social Responsibility is primarily a 21st-century phenomenon, brought about by the growing expectation of consumers for businesses and public organisations to be more accountable for local and global issues such as climate change, purchase practices, and workers’ rights. Key documents such as the United Nations Global Compact (2000) and the Global Reporting Initiative/GRI (1997) created a framework through which organisations could measure and report on their ethical and sustainability measures. Global certification standards such as Fair Trade for ethical sourcing and ISO 14001 for environmental management have also influenced the approach that modern organisations take to CSR.
The foundation of CSR is, in all business practices, to balance profit with social value, demonstrating that the organisation is genuinely invested in the communities and ecosystems it works within. Supporting social and environmental causes is, therefore, one of the most important aspects of CSR. Many organisations now reinvest a percentage of their profits into ethical causes, with some of the most important causes being those that reduce carbon footprint or support local environments, such as tree planting schemes.
Corporate Social Responsibility In Procurement
Over the past decade, CSR has grown from a ‘nice to have’ policy for larger businesses with spare cash, to a central strategy for businesses of all sizes. The significance of corporate social responsibility lies in its ability to enhance an organisation’s public reputation, which can benefit everything from customer loyalty to eligibility for public tender applications, as well as the ability to attract and retain key talent who align with the business’s ethical practices.
Procurement teams have a central role to play in corporate social responsibility because the task often falls to them to identify and select the appropriate supply partners to support the organisation’s commitment to social responsibility. Procurement teams can also employ CSR principles to promote more ethical or transparent practices in purchasing, support sustainable and fair trade initiatives, and invest in local communities – as well as reduce supply chain risk.
Incorporating a ‘CSR mindset’ into your procurement strategy makes organisations more open-minded to innovation, laying the foundations on which to build a range of energy efficiency and waste reduction strategies to save your organisation money and create genuine and lasting social value.
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At Quantum 360, our experienced team can help your business to align its procurement strategy with ethical and social principles, boost your business reputation, and strengthen your bottom line. For more information, please contact our expert team today.
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