CSR Metrics within Indirect Procurement

[hightechcsr]

Hello,

I am a program manager for a well-known high-tech company. I am tasked with developing a CSR program from the ground up for all indirect procurement across our organization.

One of my tasks is to develop metrics for the program. More specifically, I am tasked with creating spend goals to be awarded to socially responsible suppliers. I have done a lot of research and here are my main issues:

1 - Most CSR initiatives in the supply-chain are manufacturing based and are not applicable to most of our suppliers (mostly services-based as I am working with indirect, non-product/component spend)
2 - The case studies I have come across for indirect describe success stories for a specific category (i.e. utilize recycled paper with Office Supplies supplier, etc), but are not overarching, cross-enterprise metrics
3 - Most CSR information is too specifically focused on one of the pillars (i.e. supplier diversity, environmental goals). Those two are the most predominant and I have not found many organizations taking a holistic approach.

I am interested in accomplishing certain things with the program. Initially, I would like to ensure all suppliers comply with our Supplier Code of Conduct (fairly straight forward).

I'd also like to develop a set of questions to pose in the RFx around CSR (using the code of conduct as a reference). Here are the two metrics I'd like to define:

1 - What percent of favorable responses in the CSR portion of the RFx would be appropriate to deem the particular supplier "socially responsible"? I'm looking to benchmark against other organizations
2 - What percent of suppliers should we use as a target to be deemed socially responsible? (i.e. those suppliers that are deemed socially responsible at the RFx).

We have a target of 10% of spend to be funneled through the supplier diversity program. It is very easy to quantify this, as we have an agency that provides us with pre-approved diverse suppliers and we're able to benchmark metrics very easily (Supplier Diversity is a much more established program). I'm looking for some similar type of metric to this, but utilizing a benchmarked peer for reference.

Anybody that can provide me with insight into how to tackle this program holistically, would be greatly appreciated. Please keep in mind that I'm not that interested in manufacturing metrics, and/or category-specific metrics. We will analyze spend categories at a later time, once we've developed the entire program.

Thanks in advance!

[csrjohn]

Hello

As an adviser to institutional investors concerned about this sort of thing, one suggestion I would have for you is to be honest, admitting real on the ground problems with suppliers and set out the steps you are taking to solve the problem. Take as an example the situation with high tech companies who use coltan. When it was revealed that a number of companies had purchased the coltan ore that came through a chain of suppliers originating in the Congo, there was a bit of an uproar. One company, I think it was Hitachi, immediately took responsibility for having purchased the material and set in process steps for preventing it in the future.

From our perspective, this was much more important than a written policy because it showed that, even when a company erred, they didn't sweep it under the rug.

I realize this doesn't answer your primary question but it serves as an adjunct to your overall effort to deal with this challenge.

Good luck.

John