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Risk Insider: Quin Rodriguez

Do Vendors Help or Hurt Your Corporate Social Responsibility Mission?

By: | May 31, 2018 • 2 min read
Quin is responsible for leading Riskonnect's vision to drive growth and engagement in the Integrated Risk Management market. Quin has 18+ years of Executive Sales Management and Leadership experience with 10 of those in the GRC Industry. His primary focus the past ten years has been in BFSI, Retail, Tech & Communications and Manufacturing.

Corporate social responsibility (CSR) is becoming an influencer of consumers’ purchasing decisions.

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Whether it’s the environment, human rights, supply-chain sustainability or corporate governance, companies now have to take a clear stance on social issues, and it better be one that consumers can get on board with. If it doesn’t make sense or “feel good” to customers, they’re less likely to support the business.

Critical to maintaining a positive CSR image is understanding how your vendors influence this image. Your vendors are an extension of your brand, so they should reflect your commitment to maintaining a socially responsible reputation. With that in mind, it’s important to steer clear of vendors that can cause consumers to question your stance on social issues.

Whether it’s the environment, human rights, supply-chain sustainability or corporate governance, companies now have to take a clear stance on social issues, and it better be one that consumers can get on board with.

For example, let’s examine the backlash that arose in 2010 when the Susan G. Komen Foundation partnered with KFC to raise money for cancer research and breast health awareness. For every “pink bucket” sold, KFC donated 50 cents to the foundation. Though the gesture promoted social responsibility for KFC, questions arose for Susan G. Komen as a huge part of battling cancer, or any other serious disease, is a healthy diet. As a result, the partnership became a huge brand contradiction, resulting in negative press for both companies.

More recently, in 2016, Nestle and two other major food companies were under fire for knowingly sourcing cocoa from the Ivory Coast, an area known for using child labor. These companies were accused of providing farmers with financial and technical assistance in exchange for cheap product and labor, thereby supporting child labor and poor work conditions. Though it is not clear how these incidents have affected consumers’ brand perceptions, fighting the resulting lawsuit has to be taxing on the company’s resources.

Avoiding the pitfalls faced by Nestle and the Susan G. Komen Foundation requires a more extensive look at your vendor network and how they are viewed from a CSR perspective.

  1. Research vendors before entering a contract:
    Before signing the dotted line, be sure to research any CSR stories on your potential vendors and where and why they were written.

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    Conducting business with a vendor means you agree with their business standards, thus this research ensures full transparency into their business practices.Also use potential vendors’ websites as a resource. Most company websites include pages dedicated to values, missions and even board members and stakeholder information. All these details can provide useful insight into company priorities.

  2. Be proactive. Monitor vendors:
    Once you’ve entered a contract with a vendor, it’s important to take proactive measures to ensure your vendor is maintaining compliance as well as social responsibility. Visit your vendors so you can see their operations first hand, use quality compliance solutions to hold vendors accountable and even consider including vendors in your own CSR programs.

As consumers become more aware of corporate social responsibility, companies become more vulnerable to scrutiny. And the room for error is minimal as the internet increases accessibility and social media demands a fast response and resolution. Taking the time to understand your vendors and their approach to CSR can help avoid reputation risk nightmares.

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The R&I Editorial Team can be reached at [email protected]