How companies are partnering with suppliers to deliver social impact

Employees are voting with their feet by choosing to work for companies that align with their own values, while customers increasingly seek ethical businesses who demonstrate strong social purpose.

“Embracing social value expectations offers competitive advantage. Companies who ignore changing stakeholder attitudes risk missing out on talent and valuable business,” explains Dwyer.

As well as ensuring suppliers are aligned on purpose, firms seeking to make a real difference are increasing business opportunities for social enterprises and smaller businesses from a diverse range of backgrounds whether through ethnicity, gender, sexual orientation, disability or veteran status.

JLL’s research found 48% of respondents already partner with local suppliers to create positive community benefits and 36% currently track and report their supply chain/third parties’ impact on social value.

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.