PROCUREMENT organisation to function . Much has been written about procurement ’ s shift from penny-pincher to strategic lynchpin , and it is in ESG where professionals are most readily seizing upon the opportunity .
“ Procurement is taking on more responsibility ,” Patel says . “ Procurement is now expected to manage risk , to ensure that a business is spending with diverse and small businesses , with women and minority-owned businesses , and those in local communities . And it ’ s also expected to ensure that a business is executing on its sustainability initiatives .
“ What ' s really interesting is that this is actually the first time that you also have a connection between how procurement , and the way it manages supply chains , has a direct impact on the reputation of a company ,” he adds . “ This is now absolutely key , and that ' s also how procurement becomes more strategic .”
Procurement is still fundamentally a supporting role , however , and cannot enact change in a vacuum . Take the S in ESG ,
social , the banner under which human rights , health and safety , diversity , and an array of other areas of improvement to the lives of others sit . Organisations must first address imbalances and discrepancies within their own structure and processes , areas beyond the purview of procurement . But look beyond an organisation ’ s own four walls , and procurement is king . Procurement controls where spend is allocated , which suppliers and partners an organisation works with . It is responsible not only for the supplier innovation that these partnerships bring , but also the baggage that comes with it .
Procurement ’ s Impact on Company Reputation “ Procurement impacts how an organisation ’ s ESG commitments apply to all the companies that they do business with ,” Patel says . “ Are they meeting the health and safety rules ? Are they abiding by human rights laws and regulations in the different countries that you do business in . How are you able to monitor that ?
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