In part one of a series on improving corporate social responsibility with ABF Journal, Brittany Hooper of LSQ looks at diversity, equity and inclusion in the supply chain and how working capital solutions like supply chain finance can help create more diverse, efficient and equitable supply chains.
No matter the name or acronym the initiatives take, companies across the world are investing heavily in being better global citizens. You don’t have to look too far down the organizational charts of large corporations to see titles relating to corporate social responsibility, primarily in the areas of diversity, equity and inclusion and environmental and social governance.
In addition, while it’s impossible to nail down investments in DEI initiatives, anecdotally, it’s easy to see companies taking steps, at least nominally, to improve representation within their businesses, and for good reason. Customers, investors and government regulators expect companies to understand and manage the impacts their operations have on the environment, the communities they serve and society as a whole. Beyond that, there is an expectation that companies can create greater value for the benefit of the collective. That is, they put more back into society than they take out.
Many of the initiatives companies put in place to support corporate social responsibility focus on internal operations, like hiring practices supporting diversity or more environmentally-friendly manufacturing processes. But that inward focus can leave a blind spot for companies looking to further improve their DE&I and ESG outcomes: the supply chain.
Few companies operate within a vacuum; they require upstream and downstream partners to do business. From the manufacturers of inputs to distributors, there are other business enterprises relying on each other to be successful. When looking at DE&I practices, the questions become, “How diverse is the supply chain?” and “What can be done to increase the participation of businesses owned by members of minority communities in the supplier base?”
DE&I In the Supply Chain
Companies like Walmart, Intel, Verizon, AT&T, Microsoft and McDonalds have programs to promote diversity and inclusion among their suppliers. These companies often have large staffs and budgets devoted to supply chain diversity. On the other hand, according to recent data from the Association for Supply Chain Management, a large portion of small businesses are overlooking DE&I in the supply chain, which could be detrimental to success, meaning DE&I initiatives are no longer nice-to-have initiatives for public relations campaigns or buzzwords to make investors feel good; they are hallmarks of successful, responsible businesses.
Read the entire article at ABF Journal.