It's all very well having ambitious diversity targets, but they mean nothing if you can't demonstrate you're really achieving them
What does it mean to be a good company in the twenty-first century? There is rightly increasing public pressure for businesses to be acting ethically. And in a world of ethical investing, there's an economic component alongside the moral motivations. CEOs and boards have set increasingly ambitious targets, whether that's on carbon reduction and other ESG measures, or responding to diversity and inclusion. But in too many companies, it can be difficult to establish where you actually stand with your ethical performance across your supply chain. In this blog, we look at how Canopy can help track progress against diversity targets.
The wide world of diversity and inclusion
Unsurprisingly, the field of diversity is a broad one. There can be a lot of demographic data to capture to ensure diversity in your supply chain. It may be an ethnic group that's in a minority in the local population (though increasingly in the UK, the collective term used for non-white groups is 'global majority'). Or it may be the gender profile of a company's ownership and senior leadership team, or whether there's a gender gap in its pay structure. In the UK, for instance, there are ten 'protected characteristics' under the 2010 Equality Act.
Of course, this isn't a comprehensive list of how people view diversity. There's no protected characteristic for socio-economic status to include economically disadvantaged groups. And sometimes, valuing and targeting diversity isn't just about looking directly at people. In some cases, companies (and public procurement) may set standards for ensuring engagement with small- and medium-sized businesses (SMEs). This may be partially motivated by avoiding concentration risk, but there's also a recognition that SMEs bring a valuable element to diversity, and they can be a proxy target for (say) gender diversity.
Thinking globally, acting locally
For global businesses, it's important to recognise that different countries have different priorities. This must extend to being respectful of local business culture too. Often, there is a racial or ethnic element to making your supply chain meet local requirement. In some cases, this may be mandated in law, such as broad-based Black economic empowerment (B-BBEE) in South Africa. In others, it may help to be working with organisations that have more informal targets, including Supply Nation (working with verified Indigenous businesses in Australia) and Amotai (promoting Māori and Pasifika businesses in Aotearoa/New Zealand).
Elsewhere, there may be other concerns such as ownership by the veterans in the US, or how well companies work with disability. And for some international businesses, parent companies may have targets surrounding LGBTQ+ representation. It's therefore a question of Procurement responding to local diversity measures across every tier of local supply chains.
Real progress rather than lip service
Of course, you'll need to verify claims, whether that's a shareholder register or an investigation of the senior management team. In the case of gender pay gaps in the UK, companies must publish comprehensive annual data, but most measures won't be public data. And of course, we all want ethical performance measures to be genuinely motivated, and not just a tick-box exercise. So you need to be able to measure progress against targets, and take remedial action if you're falling short.
That's where Canopy comes into play. You can start by asking the right questions of your suppliers at the beginning of your relationship with them. When you onboard new suppliers, you can capture all the data you need on their diversity profile. We can adapt the question set to respond to local conditions and regulations. Your suppliers will be asked to provide data on an ongoing basis. And Canopy aggregates the data across your supply chain, so you can have a dashboard view of how you're performing against diversity targets. We'll leave it up to you to identify the businesses you need to be working with.
To find out more about how the Canopy supplier management platform can help track progress against diversity targets for more ethical performance, contact one of the team today.
Visit: www.team-canopy.com
Email: hello@team-canopy.com
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Post by Nick Verkroost
Nick is an experienced business leader and the CEO for Canopy (OCG Software), the rules-based Supplier Management platform. Nick's focus is on commercial and operational excellence and ensuring our clients maximise the opportunities that Canopy offers.