Call to face up to CSR issue

4 October 2005
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05 October 2005 | Steve Bagshaw

Purchasers need to accept the growing importance of corporate social responsibility (CSR).

This was the conclusion from a CIPS event last month examining the role and future of CSR.

Chaired by CIPS president Ian Taylor, the seminar explored what companies can do to contribute to the economies of developing countries; the financial impact of ignoring ethical procurement; and the future of this type of buying in the developing world.

Mike Barry, head of CSR at Marks & Spencer, described how the firm had responded to consumer concern about social issues by creating an ethical supply chain for flowers from South Africa.

"Over the past three years we have seen an increase in consumer understanding through focus groups of issues including GM, animal welfare and climate change," he said. "While buyers may say 'it is not our job to be a charity', this is a new way of doing business."

In his view there was a link between environmental benefits and business success, including supplier profitability. He said the South Africa initiative had provided a successful supply chain and had met customer demand.

However, Andrew Pharaoh, head of corporate practice at marketing company Hill & Knowlton, said the "jury was still out" on the question of a link between responsible conduct and financial performance. And he raised the issue of whether ethical conduct was only a by-product of organisations that were in any case well run.

He added that research had revealed 29 per cent of purchasers were already taking ethical considerations into account.

Fiona Gooch, policy adviser at development charity Traidcraft, stressed the importance of ethical sourcing but argued it was more important for organisations closer to the public eye.

"There is a business case for brands or high-profile business to act ethically," she said, but this was not so much the case for those companies "hidden in the supply chain". Liz Cross, who is responsible for CSR strategy and policy for procurement at BT, said the firm had been asked about its CSR record in deals worth a potential £2.6 billion.

Urging increased and sustained adherence Taylor emphasised how buyers need greater confidence to effect change. "This is not a stand alone issue," he said, "but one that is essential to the future of the profession."

SMoct2005

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