Wim Peters from EcoVadis, a company targeted towards improving the environmental and social practices of companies by leveraging the influence of global supply chains, recently gave a speech at the Dutch Sourcing Awards in which he highlighted that there is a lack of industry standards for corporate social responsibility (CSR).
Peters, the vice president of business development, revealed figures from research his team had conducted regarding the “weight of sustainability criteria” companies applied in supplier/product evaluations.
According to his team’s research, 62% of participants reported that each individual buyer defines the weight they assign, while 29% of companies specify a minimum weight for CSR criteria in the rating of price factors for awards – with the average being 10%. The remaining 9% of participants do not take CSR criteria into account when sourcing award decisions.
Peters’ concluded his presentation by saying that there was no center-led approach inside the majority of companies in terms of establishing industry standards regarding the incorporation of CSR and sustainability data in sourcing award decisions.
EcoVadis’ research is interesting on many different levels – the first being that the study was centered on UK and EU companies, and European organizations tend to be more advanced on sustainability initiatives than their North American counterparts, with programs in the U.S. generally driven by specific regulatory compliance requirements.
Secondly, the data suggests that procurement organizations are not yet providing full transparency to the business in the form of quantifiable costs (and business constraints) based on supplier sustainability practices. Otherwise, it is probable that there would be a much greater adoption and use of programs with at least set minimum criteria rather than an entirely random decentralized approach lacking in specified targets.
Finally, the frequency of decentralized decision criteria implies that a strong need exists to share best practices and approaches within procurement organizations, as well as to establish industry standards for corporate social responsibility.