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Uncovering the Unseen Risks: Why Service Businesses Should Care About Sustainable Procurement

"It doesn't apply to us; we're a service-based business." This is a common misconception that often prevails in the world of sustainable procurement. Some service-oriented companies tend to believe that they are immune to the sustainability risks associated with supply chains. However, this assumption couldn't be further from the truth. In this blog post, we'll debunk this myth and shed light on why service businesses should be concerned about sustainable procurement.

woman cashier when a person pays for a coffee-to-go


Service Procurement

In our extensive experience conducting risk assessments for various companies, we've consistently observed that sustainable procurement encompasses not only direct procurement categories like raw materials, components, and packaging but also indirect procurement categories. These indirect spend categories cover a wide range of services, including business services, business travel, IT, facility management, and more.

Procurement teams often hesitate to delve into the complexities of indirect spend. These categories typically involve numerous suppliers and transactional relationships, making them appear challenging to navigate. However, what we've uncovered is that these very categories often carry a substantial sustainability risk.


Human Rights Violations: Industry-Agnostic

One of the most significant sustainability risks prevalent in the service industry is Human Rights violations. Modern Slavery knows no industry boundaries and exists in various geographies. Unfortunately, the service industry is not immune to this issue. Here are a few instances where cases of Modern Slavery have recently come to light in Europe and America:

Construction and Maintenance Services: Whether you're constructing new offices or simply in need of repair work, human rights violations can lurk within these service providers.

Facility Management Services: Even seemingly innocuous services like cleaning can be linked to Modern Slavery if not adequately monitored.

Labour: Temporary or seasonal labour is particularly vulnerable, with some small temporary agencies operating under the radar.

Waste Management: The recycling sector, often part of facility management, has faced challenges related to Modern Slavery.

Energy: Even in the realm of renewable energy, such as the solar panel supply chain, issues of Modern Slavery can arise.

The unfortunate truth is that Human Rights violations are industry-agnostic, and they can hide in plain sight within the supply chains of service businesses.


Act Now: Assess and Plan

In conclusion, the belief that service businesses are immune to sustainability risks in their supply chains is a misconception that can have serious consequences. Human Rights violations, among other risks, are a very real concern. Therefore, service businesses must take proactive steps to assess their supply chain, identify potential risks, and develop a robust plan for sustainable procurement.

If you're in the service industry, now is the time to take action. Understand the risks lurking within your supply chain and make a commitment to responsible and sustainable procurement. By doing so, you not only protect your business but also contribute to a more ethical and sustainable future.


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