Procurement and Supplier Diversity in Corporate Social Responsibility
A large number of corporate governance standards internationally
At the end of 2021, the CareER Association, which focuses on serving the employment of highly educated people with disabilities, announced the results of their first "Diversity Inclusion Index (DII)" questionnaire survey on Hong Kong companies. The survey is about the trend of inclusive employment. With reference to the international survey classification, 8 major classifications are set according to Hong Kong's situation, including:
S1 Organisation Policies and Structure
S2 Civic and Community Engagement
S3 Products and Services
S4 Supply Chain and Procurement
S5 Recruitment
S6 Staff Engagement and Retention
S7 Accommodation and Adjustment
S8 Accessibility
S1 belongs to the overall environment, S2 to S4 to external activities, and S5 to S8 to internal activities. The survey will be conducted regularly and the results will be published in the form of an index with a full score of 100.
Last year was the first year of the survey, and the Diversity and Inclusion Index (DII) was as follows:
S1 is 58 points; S2 is 37 points; S3 is 32 points; S4 is 25 points; S5 is 64 points; S6 is 60 points; S7 is 70 points; and S8 is 52 points.
S7 received the highest score of 70 points, while S4's supply chain and procurement received the lowest score of 25 points. S2 to S4 scored an average of 31 points for external activities, while S5 to S8 scored an average of 62 points for internal activities.
In addition to the index, they also ask the reasons. Generally speaking, companies lack inclusive guidance for external stakeholders, workplace support tools, detailed action plans and measurable performance targets.
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In May 2022, McKinsey published an article titled "Expand diversity among your suppliers–and add value to your organization", which puts forward the view that diversity among suppliers is beneficial to the economy and that value can be created by working with minority and women-owned businesses (MWBEs).
"Increasing the diversity of suppliers has become more urgent at a time when social issues strongly influence business growth. Sixty-four per cent of millennials say they won’t work for companies that perform poorly on corporate social responsibility..." ~ McKinsey's Insights in Operations
In 2020, Accenture published a document titled "Five reasons why You should prioritize supplier diversity as part of your sourcing strategy". The five reasons are: to improve supplier competitiveness, boost innovation, heighten perception of impact, attract and retain top talent, and provide positive social impact.
"But many companies with Supplier Diversity Programs historically have treated them like 'check the box' or non-essential programs, which are often deprioritized when things get tough..." ~ Accenture
In August 2020, Harvard Business Review published an article titled "Why you need a supplier diversity program", in which the article interviewed multiple companies and diverse organizations, analyzed media reports and corporate reports, and discussed how diverse supply chains and procurement programs can contribute to socio-economic and corporate benefits.
"The 'feel-good' factor associated with diversity programs can also burnish a brand. In a 2019 study for Coca-Cola, Hootology, itself a diverse supplier, found that the individuals who were aware of Coca-Cola’s supplier diversity initiatives were 45% more likely to perceive the brand as valuing diversity, 25% were more likely to think favourably about the brand, and 49% were more likely to use Coca-Cola products..." ~ Harvard Business Review
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WeConnect International published the 2021 ranking of the top ten global companies that value "diversified supply chain and procurement" policies:
In addition, we can easily find the diversified supply chains and procurement policies of other large international companies:
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Many of the international companies listed above have their Asia-Pacific headquarters or branches in Hong Kong. International companies will inevitably set global policies, but of course, they will also allow for adaptation to the local environment and culture. In any case, they should continue to gradually implement the "diversified supply chain and procurement" policy. Therefore, the CareER research results show that Hong Kong companies have an extremely low diversified supply chain and procurement index, making it difficult to retain foreign and local talent. This makes us even more worried about the decline in Hong Kong’s overall competitiveness and the difficulty in predicting future economic development.
Sources: CareER Association、McKinsey、 Accenture、Harvard Business Review 和 WeConnect
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Design Studio MZ+MM is a social enterprise (SEE Mark No. SEE 0114) based in Hong Kong, providing various types of graphic design services. Currently, the team is composed of hearing-impaired and hearing designers who practice disability inclusion, which is the primary reason for promoting "diversity, equity and inclusion" in corporate organizations. We support the United Nations Sustainable Development Goals SDGs: 10 “Reduced Inequalities” and 17 “Promote Partnerships for the Goals”.
In addition to providing job opportunities for diverse talents, this social enterprise also helps corporate clients implement advanced governance concepts. We also firmly believe that Design Studio MZ+MM is still the only social procurement solution practitioner and provider in Hong Kong, providing professional design services in the true sense of social procurement and adding multiple levels of added social value. To learn more about the vision and mission of this social enterprise, please click this link to jump to the Social Impact page.
