Using Corporate Social Responsibility to Pick Your Sourcing Partners

It sounds strange, but companies have used stranger criteria to weed out their vendor selection. And when you actually give it some thought, it begins to make sense. Why would buy side clients who have specific production goals and budgets and deadlines and numbers use a vendor’s CSR credentials, of all things, to make a hiring decision? It’s because these days, Corporate Social Responsibility has become synonymous with ‘trustworthiness’. In an increasingly unpredictable sourcing market, buyers want more ways to differentiate between options, and not just geographically. Here’s why CSR can help:

Increased CSR visibility 

Early last month I spoke with David Kinnear, Co-founder of the Global Sourcing Council (GSC) and an expert on how outsourcing can be linked with sustainability. According to him, there is a lot more visibility today to what companies are doing. “CSR is much more a matter of public record and public scrutiny. Due to technology and social media like Twitter, the speed at which someone can comment on a firm’s activity is generating a very different response from the corporate sector than before.” 

In other words, not only are customers more aware of a firm’s social standing, but they care more about what that firm is doing to give back. And for those who think this applies to just individual customers on a small scale, think again – there is evidence that large buy side client companies also make decisions taking CSR into account. 

Driving competitiveness through CSR

If we take a purely economic view of this, it doesn’t make any sense. But realize that for an outsourcing relationship to work, it must be based on trust between the buyer and the vendor. And clients feel that they can trust vendors that are more socially conscious and who have strong CSR credentials. “If you’re looking for ways to differentiate between providers, here’s a great place to start,” says Kinnear. “There’s an awareness that your sourcing counterpart, wherever he is, is more trustworthy is he’s engaging genuinely in CSR or sustainability initiatives.” 

In my opinion, providers should see this as an opportunity, not an obstacle. Here is a chance to demonstrate to buyers what the company, work culture and values are all about – and what they can expect if they begin an outsourcing partnership. And just as news about bad CSR practices will get around very quickly through social media, so will news about strong sustainability and responsibility initiatives. It’s a fantastic marketing opportunity for vendors, and one that doesn’t get discussed very often.