How companies are partnering with suppliers to deliver social impact

With large global organizations managing procurement budgets of billions of dollars, the impact of creating a more socially balanced supply chain landscape is significant.

“There’s an opportunity to generate lasting benefit, by building relationships with small and diverse businesses from historically under-represented groups,” says McCormick.

In England alone there were 5.2 million microbusinesses with less than 10 employees in 2022. However, failure is common – due to lack of support and high initial costs.

One company aiming to make a difference, is global office supplies firm, Lyreco. They use their Lyreco Goodness Microbusiness Support Programme to back ambitious small firms who align with their sustainability criteria, providing expert advice, access to markets and faster payment terms.

“It’s vital that small independents have access to working capital,” explains McCormick. “Offering shorter payment terms helped one of our female-owned suppliers, ​grow her business by 10%. Now she can pay her team on time, employ them for more days each month and hire new contractors.”

With larger suppliers, there’s potential to create wider impact on communities by committing to upskilling initiatives such as apprenticeship programs and language training.

Partnering with advocacy groups such as the National Minority Supplier Development Council in the US, the European LGBTIQ Chamber of Commerce, and Supply Nation in Australia, is another way that more mature companies can support a diverse range of firms along their own ESG journeys.

McCormick describes how participating in external events - such as those organized by WEConnect International who champion women-owned businesses - or organizing supplier engagement sessions, helps share best practice and creates space for conversations that drive the sustainability agenda forward. “It can even be as simple as explaining how to navigate online portals to complete the necessary onboarding paperwork or compliance reporting,” she adds.

It’s just part of the way that the built environment is increasingly acting as a vehicle for investors and organizations to maximize their return on sustainability efforts, according to Dwyer.

Take an Australian financial services client, guided by circular economy principles and social engagement goals. They procured sustainable materials from indigenous-owned businesses and employed local people with disabilities to assemble modular panels for their retail units.

“It shows how social and environmental goals can be addressed in tandem, while using the procurement process as a force for good,” says Dwyer. Some 54% of companies say they’re now considering responsible sourcing when designing and operating their facilities.

Across real estate, the wider ecosystem of stakeholders including occupiers, investors and local authorities, are waking up to the idea of partnerships, as a way to accelerate shared social goals.

“Firms are now expected to show proof of progress towards their corporate commitments – but they can’t get there on their own,” says Dwyer. “Driving material change requires strategically partnering with the supply chain, helping all businesses act responsibly to deliver long term sustainable results.”