5 elements your organisation needs for a Gender Equality Procurement Initiative

ESG (Environmental, Social, Governance)Women In Procurement & Supply Chain

Oct 25 2022, 10:03 AM6 min read

As procurement policies reflect developing pressure to meet Environmental, Social and Governance (ESG) guidelines, the focus is expanding to include Gender Equality Procurement.

What is Gender Equality Procurement?

Gender equality means that all people – regardless of their gender identity – have the same rights, resources, opportunities, and protections.

Procurement activities drive much of the global supply chain, and expectations are that corporations will police these activities for the greater good of society. From forced labour in fishing and manufacturing, to higher prices for women’s products, inequality is a long-time barrier for women in the global economy.

That’s where gender equality procurement comes into play.

Due to structural inequalities and discrimination, women entrepreneurs from a variety of backgrounds – race, class, sexual orientation, ability, education, etc. – have access to less capital and fewer resources than their male counterparts in these complex value chains, according to the Women’s Empowerment Principles (WEP) established by the UN Global Compact.

Women are therefore disproportionately represented at the lowest tiers of the supply chain, carrying out lower-skilled, lower-paid jobs and operating smaller businesses.

Historical gender roles meant that men had more legal rights, more access to resources, and more opportunities to follow their chosen pathways than women – the effects of which are still prevalent around the globe today.

While society has made considerable progress towards gender equality, there is still a long way to go to achieve gender equality on a widespread, consistent basis. Gender equality is not equally distributed around the world, in all societies and cultures.

In response, UN Women endorses gender-responsive procurement as a critical part of the global solution for gender equality and women’s empowerment. Gender-responsive procurement is the selection of services, goods and civil works that considers their impact on gender equality and women’s empowerment.

UN Women’s definition of a women-owned business is “a legal entity in any field that is more than 51-per-cent owned, managed and controlled by one or more women” – with an end goal that ensures the selection of services, goods, and civil works that consider their impact on gender equality and women’s empowerment.

How can procurement leaders engage in gender equality procurement? WEP suggests starting with pilot programs to engage and inform stakeholders and discover which practices work well, and which do not.

The 5 elements your organisation needs for a Gender Equality Procurement Initiative:

Transforming a company’s procurement process may seem like a large task – with people, policy, stakeholder management, and more, all factors that need to be considered. Here are five elements that will drive your efforts.

1. People

Appoint women to managerial and executive procurement positions; include gender-responsive responsibilities in job descriptions; make managers accountable for success.

2. Policy

Study the supply chain to gauge desired outcomes compared to the existing supplier base; Systemise data collection for supplier characteristics; Engage leadership and stakeholders to develop internal and external support.

3. Practice

Classify suppliers by ownership and other status; Use supplier selection criteria to award contracts to preferred firms; Incorporate into subcontractor requirements.

4. Grow Suppliers

Leverage your company’s influence to promote gender equality procurement. Understand the workforce composition of suppliers; Facilitate women-owned businesses’ access to capital.

5. Knowledge Management

Monitor and adjust gender equality procurement policies to reflect new knowledge and changing market conditions. Set specific targets to promote among your supply chain. Set up a continuous improvement plan, including internal audits.

What is currently being done to achieve true Gender Equality?

Like many ESG efforts, it can be difficult to figure out where to start a gender equality procurement initiative. People are in agreement on the concept but identifying steps for concrete improvements can be challenging. In the ‘Procurement Under Pressure’ Research report, only 7% of respondents said they were prioritising ESG outcomes, reflecting the myriad pressure facing procurement leaders. And 32% of leaders admit to not following their own sourcing criteria to secure supplies.

But there are early examples of fruitful efforts.

In Western Australia (WA), the government has launched a pilot project to embed gender equality principles and practices in some procurement activities. It’s part of a program of 50 actions and initiatives to support gender equality.

Because the WA Government is a major purchaser of goods and services from regional businesses of all sizes, the Government has made a commitment to ensure that the procurement process can achieve social benefits for the community, as well as support the economy.

Fifteen WA public sector agencies are taking part in the 12-month pilot. A few questions about gender equality have been included in the procurement form for organisations that want to supply to the public sector. Organisations are asked a few questions about policies and practices that support gender equality. However, they will not miss out on public sector contracts just because they don’t have gender equality measures in place.

Does it work? The WA government has tracked evidence of positive outcomes for businesses and organisations, once they take action to introduce specific gender equality policies and initiatives into the workplace.

An annual report highlights any significant changes over time and identifies which policies and actions those organisations that report have taken. Since the first report in 2016, organisations which report to WGEA have improved their gender equality, simply from the act of reporting.

Rosond, a mining contractor in South Africa, has embraced gender equality in its business practices. The company is working to upskill women for skilled positions and rethink how work is done. To help attract women to non-traditional roles, the company hosted a women’s forum to address issues such as financial literacy and family planning. The company has pledged to increase its supply chain involvement with women-owned businesses, according to Ricardo Ribeiro, MD for Rosond.

Consumers say they want to buy from companies that share their values. Gender equality is a driver for consumer motivation for a growing number of people. After all, 85% of consumer decisions are made, or influenced by, women.

Companies like Gender Fair help consumers and corporate buyers make informed decisions. Gender Fair rates companies on five areas: leadership & opportunity, employee policies, advertising & communications, diversity reporting, and social responsibility. The ratings give companies clear benchmarks and guidelines for improvement and provide a rating on a 100-point scale – called the Gender Fair Index.

This information, available in a single source, simplifies ethical consumerism so people who care about women and girls can contribute daily to gender equality.

Consumers can access the information through the Gender Fair app. The goal is to equip consumers with the knowledge and power they need to make value-based decisions in real-time.

“2020 has brought many social issues into mainstream conversation, it is important for consumers to move towards the change we want to see,” Gender Fair CEO Johanna Zeilstra says. “Purchasing products from companies that are gender equal will increase profit for diverse companies and encourage other companies to review their internal structure to becoming a gender equal organisation.”

Even if it’s not required yet where your company operates, consider gender equality procurement as a component of your ESG strategy. It is one more area where procurement can drive positive change around the world.

To understand more about the pressures currently facing procurement and supply chain professionals, the outlook for 2023, and what you can do to tackle these market challenges, make sure you download our ‘Procurement Under Pressure’ Research report. We teamed up with Ivalua to survey 170 procurement and supply chain leaders on the pressures and conditions they’re experiencing in 2022 and their outlook for next year. Click the link to download Procurement Under Pressure.

Find more ESG (Environmental, Social, Governance) news, insights, and best practises at Procurious.com.