As the global economy was plunged into lockdown last year, the public conversation turned towards resetting and rebuilding better. Lockdowns allowed businesses and consumers to imagine a greener, more sustainable and more socially equitable way of doing things in a world after COVID.
While social value policies had been rising on the corporate agenda for a long time, the past 12 months placed them firmly front and centre. Our Finance Leaders Outlook report in February underlined this, finding that 75% of US and 62% of UK finance leaders said that the pandemic had caused social value initiatives to rise as a budget priority.
But within this trend, we have seen a changing understanding of what social value can be for businesses and how they can drive genuine social impact. One of the key areas of change has been an increase in social value policies across supply chains and supplier networks.
Why is this?
Businesses are much more than their internal operations. In fact, 80% of a business’s social and environmental impact is incurred by its supplier base. If businesses want to drive genuine change with their social value policies, they need to look towards their supplier base.
And businesses are doing just that. In our Finance Leaders Outlook report, we found that over three-quarters of U.S. finance leaders (78%) say they are using social value as a decision-making criterion in their suppliers and 20% are planning to implement this. In the UK, 75% of finance leaders said they were already using social value as a decision-making criterion in supplier selection and a further 23% said they are not yet using it but have plans to.
With this shift in focus to the supplier network, new teams and areas of expertise will be needed to drive social value policy. The CPO and procurement teams will play a critical role here in navigating the complex supplier landscape and driving positive social change alongside business results.
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