From the corporate duty of vigilance to social procurement strategies

Definition of the needs and supplier sourcing

During this first phase of the purchasing process, purchasers may adopt various commitment levels. The most accessible consists in sharing their social strategy through requirements specifications and considering the specific social challenges related to the purchased good or service’s industry and country of origin. Purchasers may also invite potential suppliers to present their own social strategy during requests for proposals. Going further, purchasers may act to facilitate small businesses and social economy actors’ access to requests for proposals, through institutional partnerships (for instance in France, the “SMB Pact”) or public platforms. The “Inclusion Market” is a solid example of a platform developed by the French government that lists 8,000 inclusive businesses.

Contractualization of social commitments

Similarly, the integration of social commitments into contracts binding purchasers and suppliers may materialize in various ways. The easiest consists in asking suppliers to sign a charter of social commitment as an appendix to their contract. More ambitious purchasers may devise social performance contracts to grant suppliers a bonus or a penalty depending on their performance regarding predefined social goals, that would be verified yearly during business reviews. Finally, another possibility is to transform the contract’s format to adapt to the specificities of each service: contract simplification for small and medium businesses, three-party contracts, multi-year contracts…

For instance, in France, the City of Lille wished to mobilize its cleaning services suppliers on the matter of workplace wellness. A social performance contract was drafted to encourage the supplier in implementing the necessary measures to improve workers’ well-being, in this case measured monthly through absenteeism rates. This contractualization modality enabled a decrease of absenteeism rate by about a third.

Service realization and monitoring

Structuring a clear governance with regular discussions between purchasers and suppliers is an essential condition for the success and efficient monitoring of projects. It may also be relevant to support stakeholders’ skills acquisition through awareness-raising and acculturation to the industry’s social challenges, through contributions from local experts on the territorial footprint of projects. Finally, some organizations commit to an even stronger reinforcement of their social impact by deploying multi-party projects, in partnership with suppliers and specialized local partners (for example UEBT or Ecocert), meant to address the specific social challenges faced on the field and make supply chains more resilient.

For example, the L’Oréal Group adopted such an approach in 2014 when it developed its “Solidarity Sourcing” program, which aims at helping individuals in circumstances of vulnerability to access stable employment and decent wages. In this context, L’Oréal launched a sustainable sourcing field project in Burkina Faso that supports the financial empowerment of shea nuts pickers. In total, 35,426 women have benefited from this program since 2021.

Supplier evaluation

Supplier evaluation is a key step to review the supplier’s social performance and highlight its commitments. Following an impact measurement approach, purchasers may define relevant indicators and collect corresponding data to measure the social impact generated by projects, as well as include social criteria in suppliers’ performance evaluations. Going further, purchasers willing to support their partners may establish action and mitigation plans in order to align the supplier’s performance with the goals set in their social strategy. Engagement actions such as responsible suppliers trophies or creating links with social impact players tend to encourage suppliers’ skills acquisition on social challenges.

In October 2020, Air Liquide’s Group Purchasing Department organized its third “Business Meeting” for the adapted and protected work sector. Among the hundred guests, 10 organizations that provide assistance to people with disabilities in the workforce had the opportunity to introduce their achievements with the Group’s subsidiaries. Following this event, 80% of participating organizations have been able to initiate or renew their commercial relationship with the Group.