While environmental initiatives are becoming easier to measure, such as carbon emissions reductions, the social aspect of sustainability is less tangible. But L’Oréal China has worked with its partner GEP to outstrip its goals for an ambitious social impact project around supplier diversity. The project, known as Solidarity Sourcing, aims to enhance social inclusion throughout its business ecosystem. As a subsidiary of global beauty giant L’Oréal Group, L’Oréal China has the potential to create a sea change of positive social change through its actions. The initiative, which won the prestigious CIPS Asia Excellence in Procurement Award for the “best initiative to build a diverse supplier base” has enabled people from underprivileged and minority communities to be a part of L’Oréal China’s broad supplier network. The original target was to provide 500 full-time equivalent (FTE) jobs across supplier sites in 2021, providing employment opportunities to underrepresented groups.
By taking a strategic approach, developing an appropriate operating model and implementing process flows, the programme ended up exceeding that goal by 27%, giving more people access to secure employment which would have otherwise been out of their reach, as well as diversifying L’Oréal China’s supply base. Any such ambitious project requires careful change management and effective communications to be successful.
All stakeholders needed to be aligned on the importance of ESG before the project was rolled out. The procurement team conducted workshops and training sessions for both internal stakeholders and suppliers, to explain and localise the strategy and translate it into actionable tasks. A constant drumbeat of communications, alongside workshops and roadshows, helped to raise awareness among the existing supplier base.
“The key to success is L’Oréal is relentlessly engaging and encouraging their suppliers to evaluate how they can give more jobs to underprivileged people and communities,” says Michael Seitz, vice-president, GEP Consulting, China. “Communication is ongoing. Importantly, suppliers are rewarded for contributing to the programme.” L’Oréal China also assigned one dedicated resource to act as a central knowledge centre within the indirect procurement team, to ensure any queries could be handled efficiently.
And the success of the 2021 implementation resulted in a high level of motivation and engagement around the programme. The project shows how a large business such as L’Oréal can “use its purchasing influence to provide better accessibility to underprivileged communities across China”, says Seitz. “L’Oréal is showing how a procurement function contributes to making a positive social and societal impact.”
Words by Katie Jacobs
This article was originally published by Supply Management for the Chartered Institute of Procurement and Supply. You can read the full report, The Case for Social Value, at https://www.cips.org/supply-management/campaign/supply-management-updates/supply-management-update-september-2022/