Procurement for mutual good
Read about our continued efforts to build a more diverse, ethical, and greener supply chain.
This area of our website offers information about some of the things we do as a responsible business. For information about our range of products and services please visit our homepage.
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Our Procurement for Mutual Good programme
What we buy and who we buy it from matters, which is why it’s so important to us that our approximately 1100 third party suppliers reflect our values and ambitions. In 2020, we established our Procurement for Mutual Good programme. This programme is a framework of policies, practices and principles for our colleagues and third parties to follow. It supports our strategic objective in creating a more diverse, ethical, and greener supply chain.
Procurement for Mutual Good also supports our Society-wide Mutual Good Commitments addressing important topics linked to each commitment. These commitments are to:
- lead the greening of UK homes
- help to achieve safe and secure homes for all
- support our members' financial well-being
- champion thriving communities, and
- reflect the diversity of our society.
“Through our Procurement for Mutual Good programme, we aim to work with our suppliers towards a common goal – to protect people and planet, now and in the future. We’re striving for a diverse, ethical and green supply chain, both in terms of the products we procure and the partners we work with.”
Imran Rasul, Chief Procurement Officer
Leading the greening of UK homes
We worked with Carbon Intelligence to model our upstream scope 3 emissions, including those for our purchased goods and services. We’re driving decarbonisation across our supply chain, working with our third party suppliers to measure, report and set targets that reduce their greenhouse gas emissions. This is a requirement for all large third party suppliers we engage with, and is part of our onboarding process, as described in the ‘Policies and principles’ section below. Decarbonisation of the supply chain is further championed through our implementation of EcoVadis, detailed below in the ‘Our partnership with EcoVadis’ section.
We have a Society ambition to eliminate avoidable plastics by 2025. This means engaging with suppliers that provide goods in order to remove single-use plastics and unrecyclable materials from their packaging.
Helping to achieve safe and secure homes for all
People in slavery are often in unsafe homes. Therefore, we contribute to our commitment of ‘safe and secure homes for all’ by taking steps to combat modern slavery and labour exploitation. We’ve been working with anti-slavery charity Unseen (opens in a new window) to better understand the risks that exist within our supply chain and how to take action to mitigate them, for example through enhanced due diligence. We also work with Unseen to provide training to our Procurement team and key supplier relationship owners across our organisation to improve their understanding of modern slavery, the role of businesses and the requirements expected of them.
Supporting our members’ financial wellbeing
Paying our third party suppliers promptly supports their cashflow and ensures that they can, in turn, pay their workers on time. We’re signatories to the UK Prompt Payment Code and make our payments in line with its requirements. Since the start of the pandemic, we’ve been aiming to pay small suppliers even quicker, targeting payment within ten working days.
As a Society, we’re committed to ensuring our pay meets the true cost of living. We also champion the real living wage across our supply chain.
Championing thriving communities
We’re members of the Buy Social Corporate Challenge (opens in a new window), a group of businesses committed to collectively spending £1 billion with social enterprises. As a socially driven business, supporting other organisations founded with a social mission is important to us.
Reflecting the diversity of our society
Roughly 40% of our third party suppliers are Micro, Small and Medium Enterprises. Through our commitment to The Fintech Pledge (opens in a new window), we’re looking at how we can make it easier for micro organisations to work with us and how we might be able to help them scale. We’re also working to understand the diversity of ownership of our third party suppliers, and what we can do to build on this. We are looking at how we can transfer learnings from our internal efforts to build a more inclusive and diverse workforce to then champion this across our supply chain.
Policies and principles
We expect our third parties to support our Procurement for Mutual Good programme and ambitions. This includes complying with our Third Party Code of Practice – PDF, 1MB (opens in a new window) and the standards it sets out.
Potential suppliers are screened during onboarding to check they agree to meet the Third Party Code of Practice’s standards, comply with the UK Modern Slavery Act, and to reduce their greenhouse gas emissions with targets and reporting. Where a prospective supplier does not meet all our standards, we ask that they agree to close these gaps in order to work with us. Where a contract is put in place, we look to negotiate a sustainability schedule to cover this activity.
We also have internal Responsible Purchasing Principles, which we encourage our Procurement team and any colleague involved in third party processes to consider. These include:
- avoiding unnecessary consumption and seeking opportunities to reduce, reuse and repair
- evaluating and seeking to minimise environmental impacts across the lifecycle of goods and services, including what will happen at end of use
- considering using social enterprises, majority diverse-owned organisations, and micro or small suppliers for part or all the service where possible
- supporting on-time payment to third parties
- promoting best practice in environmental, social, and governance performance by asking questions, understanding supplier performance, and sharing learnings
- conducting all business relationships with respect, honesty, and integrity.
Our partnership with EcoVadis
In 2021 we partnered with supplier sustainability rating provider, EcoVadis, to help us screen and monitor third party performance across environment, labour and human rights, ethics, and sustainable procurement activities.
As of September 2021, we have over 50 third party EcoVadis scorecards, representing around 30% of our annual spend.
We were pleased to see that of these:
- 97% have a policy on corruption and an active whistleblowing procedure in place
- 80% reported to have taken action on energy consumption and greenhouse gas emissions
- 77% have a policy on sustainable procurement issues.
As we engage with our third parties on their EcoVadis scorecards, we will pursue the adoption of activities to support the decarbonisation of our supply chain, and to assist the Society in reaching net-zero carbon emissions.
A further 100 third parties are being requested to participate in EcoVadis, as part of the next phase of our roll out.
Awards and achievements
- 2021 Winner for Best Sustainability Project of the Year, CIPS Excellence in Procurement Awards.
- 2021 Finalist for Best Response to Supply Chain in a Crisis, CIPS Excellence in Procurement Awards.
- 2020 Highly Commended for Best Initiative to Deliver Social Value through Procurement, CIPS Excellence in Procurement Awards.
“We’re proud of the progress we’ve made and of the recognition we received from the Chartered Institute of Procurement and Supply since launching our Procurement for Mutual Good programme.”
Hannah Coopey, Shared Services Responsible Business Senior Manager