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Addressing supply chain risks and opportunities in Financial Services procurement

Objectives and Membership:

The impact of Corporate Responsibility (CR) in procurement has gained momentum over the last ten years. In order to address this, within Financial Services Procurement, a group was established to address a range of Supply Chain risks and opportunities for the participating companies. This group became the Financial Services Corporate Responsibility Group (FSCR) and took the following areas as a core challenge:

Address reputational risks in the supply chain (e.g. labour standards)
Tackle supplier fatigue on responding to CR assessments by adopting a common approach
Raise standards of responsible procurement for member organisations
Provide a forum to discuss ethical issues
Change the perception of procurement as "cost cutters"
Use the combined leverage of financial services to raise environmental and social standards for our companies and business partners
Satisfy corporate commitments to CR and brand values

The membership of the Group started with four committed procurement heads and CR leads from major financial services organisations (Aviva, Co-operative Financial Services, Standard Life and Zurich Financial Services) and has rapidly expanded to now include representation from over 20 Financial Services organisations.

CR performance tracking:

The group members assess themselves against six core CR principles to review the effective delivery of CR in supply chain management:

CR policy, principles and commitment;
CR governance and resourcing;
CR employee guidance and training;
CR performance objectives, targets & indicators;
CR Management Systems; and
CR procurement criteria and audit verification.

Revisiting this assessment at regular intervals enables members to demonstrate the ongoing progress being made through group participation.

Building a common CR toolkit

Group members have built a common CR supplier questionnaire for use by all organisations. In designing this questionnaire, the group consulted with the Business in the Community Index, FTSE4good, UN Global Compact and Dow Jones Sustainability Index to ensure that all relevant CR issues were incorporated. Group members have also produced eight buyers' guides focusing on CR issues within particular spend categories (IT & Telecoms, Stationary & Print Services, Professional Services, Insurance Claims, etc).

The members have committed to an annual review of the toolkit, with a view to updating it in line with emerging CR issues and developing a toolkit specifically tailored for SME's.

Benefits:

The implementation of a best practice CR programme has delivered confidence and real value to each organisation, with many realising that CR and cost/quality go hand in hand. Some of the key improvements include:

Developing a common range of tools to engage and assess suppliers, thus minimising supplier time and effort in responding;
Increasing knowledge of CR within member organisations;
Establishing a common baseline for financial services organisations to adhere to ;
Managing reputational risks such as labour standards;
Engaging employees on the role of procurement beyond cost/quality;
Providing a forum to discuss key sustainability issues;
Delivering insight into sustainable products and services;
Improving the opportunity for local and diverse suppliers to compete;
Raising environmental and social standards with supply chains; and
Engaging suppliers to develop more sustainable products at competitive prices to benefit environment and society.

For further information, or to express and interest in joining this Group, please contact the Group Chair - David Allcock - david.allcock@hsbc.com

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Addressing supply chain risks and opportunities in Financial Services procurement

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