September 2013 Supply chain social value report Understanding the social value created by a sample from a total population of 772 SME suppliers in the Fujitsu supply chain. Social value indicators generated by respondents: Fundraising total 123,953 Hours of volunteering 2,225 Pro-bono hours 27,186 Community awards 14 Total donations to charity 59,385 Work opportunities for young people 92
Contents Gavin Bounds 01 Andrew Croston 02 Fujitsu the bigger picture 03 Philip Green 04 Trading for Good 05 How it works 06 Some facts about small business 07 Fujitsu s social value report 08 Example Trading for Good company profiles 12 Summary 13 This report is based on a sample from a total population of 772 SME suppliers in the Fujitsu supply chain. The data was compiled over four weeks using both the Trading for Good digital platform and telephone data capture. For more information visit: tradingforgood.co.uk
Gavin Bounds Chief Operating Officer, UK & Ireland, Fujitsu Small businesses are vital to healthier, stronger local communities Fujitsu has placed a strong emphasis on responsible business practice and this year we were delighted to be awarded the Business in the Community Platinum standard for all our work to become a business that is doing well by doing good. As we progress on our journey of sustainable business growth we are turning the responsible business lens on our procurement processes and supply chain. It is however quite a complex task understanding how best to work with our supply chain on corporate responsibility. There are many aspects that we need to consider. One such aspect is understanding the impact we have on smaller businesses and how they in turn impact on local communities. We know small businesses are vital to healthier stronger local communities. As a larger business Fujitsu must ensure responsible procurement but we should also ensure our suppliers are themselves responsible businesses. Fujitsu has been a long term partner of Trading for Good so I was delighted to invite our key small suppliers to be amongst the first in Britain to join this new free digital service that will help to champion smaller businesses and measure the social value that they create. This initial report from Trading for Good has given us a view of our small business social value chain. We are using this trend analysis to help us improve our supply chain polices. Now we have completed this initial report we will be extending the process to cover all our small business suppliers. We hope the result will be to share best practice, encourage learning and demonstrate the importance of doing business responsibly. At Fujitsu we are calling this our small business social value chain. To help us understand more about this value chain we have been working with Trading for Good to co-produce this pilot report, which highlights the trends in social value generated by our small business suppliers. Supply chain social value report 01
Responsible supply chain management can support small business. Andrew Croston Chief Procurement Officer, UK & Ireland, Fujitsu In order to succeed in our business aims, we work closely with suppliers to ensure our procurement activities embody our CSR values. Fujitsu s procurement policy describes the principles and procedures that govern our procurement activities. Through responsible supply chain management we aim to ensure that suppliers share our environmental and social values, as well as ensuring that we meet our obligations to third parties to source ethically and responsibly. Our conversations with suppliers are increasingly centred on responsible business issues. Recently, for example, we engaged with suppliers to learn how they promote sustainability and how this might affect Fujitsu. We will achieve our aims by: Hosting supplier networking events aimed at strengthening joint work on charity and community projects. Auditing our supplier base, collecting basic information in preparation for supplier review and site visits. Leading and promoting idea generation, collaboration and knowledge sharing between partner organisations. Opening up more of our supply chain to smaller businesses to help support local economic growth. Committing to the Prompt Payment Code, being a fair and responsible partner. Partnering with Trading for Good to help support responsible business practice in smaller businesses. 02
Fujitsu The bigger picture 14,000 3% 30 1.7b 19.6m 414m 12m 1.1b 343m 6.4% 388,850 827 hours 99 96.4% 1 People employed by Fujitsu in UK & Ireland Of the total employment in the IT sector Different geographic locations Annual revenue FY end 31st March 2013 Profit before tax UK tax contribution, which is 24% of revenue Irish tax contribution (taxes and VAT) Fujitsu s total tax contribution more than the last 3 financial years has totalled over 1.1b Millions in taxes on behalf of HM Treasury through customers VAT payment and labour taxes Of employees support payroll giving Raised for charity through fundraising and sponsorship in the last 12 months Given in employee volunteering to good causes in 2013 to date Places created for apprenticeships paying 50% more than the minimum legal pay Scored in the BITC index awarded Platinum status in 2013 Major charity partner supported Shelter is our charity partner. We also work with/raise funds for Prince s Trust; BITC; SSAFA; British Soldier; Toe in the Water; Children in Need Supply chain impact Passing on a culture of responsible business practice Fujitsu has a supply base that creates a wide impact 715 million 772 SME suppliers 47% supply base In FY12/13 715m was spent across more than 1000 suppliers In FY12/13 Fujitsu had 772 active SME suppliers In FY12/13 47% of Fujitsu s active supply base were SME suppliers Supply chain social value report 03
Transparency, responsibility, good business. You will be becoming very familiar with such terms as consumers lead the demand for more ethical behaviour from business. No business, large or small, can ignore this challenge. Philip Green Chairman Trading for Good All businesses aim to grow and any company that thinks it is immune from consumer scrutiny will damage their growth potential. Pressure is increasing from government, the public, the media, regulators and customers for business to behave responsibly. The economic environment is the toughest we have seen for a long time. Consumers are getting even harder to reach and engage. Consumer scrutiny of business behaviour is growing. Ignoring these pressures is commercially destructive. It s because I believe that business survival is predicated on being a good business that I agreed to take on the role as Advisor to the Prime Minister on Corporate Responsibility. What I am clear about is that good business goes beyond what is merely good for the P&L account and balance sheet. It s about creating value that you cannot always see but it is there and, more importantly, customers expect to be able to judge for themselves whether this value is valid and real. If consumers have access to information they can make informed choices. That s why I agreed to Chair Trading for Good. In essence a small business is fighting for customers and recognition the same as our large high street brands. Trading for Good is about helping to champion the great work that our smaller businesses do in local communities. It is about taking information and making it public to give consumers more choice. This is just as important if we are choosing a plumber or a bank to spend our money with. Britain can lead the way on this. We can show the world that transparent reporting helps build reputation and trust in our global business economy as well as on our high streets. 04
Trading for Good What is Trading for Good and what can it achieve? Trading for Good benefits customers, small businesses, large companies and wider society. Trading for Good is a new digital platform championing the good work of the UK s small businesses. By capturing the social value they create, and giving them a forum for communicating that social value, Trading for Good encourages these businesses to do even more good for the community. It s free and simple to sign up, and members benefit from the following features: Online profile to shout about the good work that they do. Personalised info graphics, communicating their social good at a glance. Printable PDF report they can add to tenders to help win business. Access to our media room, marketplace and consumer directory. Trading for Good also provides a public directory that enables consumers to search for an individual small business based on the social good that they do. So consumers can reward ethical businesses by choosing to spend their money with them. In the coming months Trading for Good will also be launching a marketplace which will enable companies like Fujitsu to search for small businesses to push out tenders to. So large companies can also reward ethical businesses by working with them. What s more, Trading for Good also adds up all the good work from our individual members, and shows a simple set of graphics that illustrate, in real time, the total social value created by Britain s smaller businesses. The figures are already impressive, and as Trading for Good grows and more companies come on board, we ll not only get a true picture of what small businesses do for society, but also help them to do even more good. The Trading for Good team would like to thank Fujitsu for having the foresight to help deliver this exciting new platform. It s good for customers It s good for SME s It s good for society It s good for large business Customers choices really make a difference. They can explore our company profiles to choose who they buy from or work with, according to their socially responsible activities. Socially responsible trading is great for SMEs. We help them build their profile, improve their CSR practices, communicate their values and attract new customers. Local communities benefit from the added value generated by a vibrant and ethical business community supporting and employing local people. As this report shows, working with a supply chain of ethical SMEs, and understanding and reporting the resulting social value is a key part of CSR strategy. Supply chain social value report 05
How it works Step 1: Sign up Step 2: Register Step 3: Build profile Step 4: Update regularly Any small business with less than 250 employees can sign up for free, simply by completing their name and email address and clicking join. New members receive email verification with a password protected login link. They log in and complete their basic registration profile. They complete a simple online data trend questionnaire capturing specific information that is then used to complete their personal infographics showing their social value at a glance. Members can log in whenever they want, and add their good news stories in a simple blog timeline. How does Trading for Good help large businesses sign up their supplier networks? To make it simpler, we can provide large organisations with a communications toolkit to push out to their supplier networks, encouraging them to join in for free. Alternatively we can receive data in a spreadsheet featuring basic information (name, email, address etc) which we import (in effect completing steps 1 and 2 above). We then contact the small businesses and ask them to complete their profile and add their good news stories. We can also support registration with an outbound telephone exercise, encouraging the small business to complete their profile. We can do this for you or we can provide a script for your team. For example, Fujitsu used some of their apprentices to call their small suppliers. As these small businesses complete their questionnaires, it s possible to watch their data being compiled in real time. Ultimately we can bring together information from the whole of your supplier network, and a full social value impact report like this one can be produced for a corporate membership fee. 06
Some facts about small business Trading for Good defines an SME (small to medium sized enterprise) as an organisation that employs less than 250 people. Small business, big numbers: 4.8 million 1,500 billion 14.1 million There are an estimated 4.8 million small businesses in the UK SMEs have a combined turnover of 1,500 billion SMEs in the UK employ a total of 14.1 million people Small businesses alone accounted for 47% of private sector employment and 34.4% of turnover of all businesses, 62.7% (three million) were sole proprietorships, 28% (1.3 million) were companies and 9.3% (448,000) partnerships. There were 907,000 businesses operating in the construction sector nearly a fifth of all businesses. In the financial and insurance sector, only 25.3% of employment was in SMEs. However, in the agriculture, forestry and fishing sector virtually all employment (95.4%) was in SMEs. With 806,000 private sector businesses, London had more firms than any other region in the UK. The South East had the second largest number of businesses, with 768,000. Together these regions accounted for almost a third of all firms. Figures obtained from the Department for Business Innovation and Skills. Supply chain social value report 07
Fujitsu s social value report Section 01: Supporting charities and communities Fujitsu s SMEs are supporting charities and communities across the UK and Ireland 43% of respondents reported that they had some kind of formal partnership with local community groups or charities. The majority of suppliers to Fujitsu give to the following type of good cause: Health related 71% Educational 9% Culture and arts 6% International NGO 3% Animal welfare 3% 50% of respondents reported that they supported charities with cash donations. 12% of respondents indicated that they would like to learn more about having a formal relationship with a charity. 60% of respondents said that they made in-kind contributions to local causes. 47% of respondents said that employees were actively engaged in fundraising. The average amount raised was 1087. 59% of respondents said employees actively engaged in volunteering with local good causes. 57% of respondents allow employees time off for volunteering. The average number of volunteer hours per year per SME was 20. 9% of respondents suggested that their giving was formalised in a tax efficient manner, using payroll-giving schemes however 10% indicated they would like to learn more about this form of giving. 08
Section 02: Helping young people into work Fujitsu s SMEs are helping Britain s 16-25 year-olds gain vital work experience 30% of respondents offer apprenticeships. 35% of respondents offered structured training programmes. 50% of respondents offered to mentor young people. 52% of respondents actively engaged with a school to offer a work experience talk of some kind. 29% of respondents reported that they were involved in some kind of local community project to help young people find work. 30% of respondents offer apprenticeships however 10% indicated that they would like to learn more about offering apprenticeships. 42% 39% 48% 42% engaged with schools to raise awareness of work 39% offered formal work experience 48% reported no activity at all in supporting young people into work Section 03: Improving impact on the environment Suppliers have an impact on the environment that Fujitsu needs to understand better if it is to reduce its own total carbon footprint 88% of respondents said that they are taking action on reducing energy from their buildings by using energy saving light bulbs. 44% of respondents reported using car sharing schemes. 96% of respondents are actively trying to reduce their waste to landfill ratios. 15% of respondents actively recording their carbon footprint and are aware of their carbon emissions. 87% of respondents have introduced a recycling programme for the business. 57% of respondents encourage the use of video conferencing over travel where applicable. 95% of respondents did switch off PCs at night. Supply chain social value report 09
Fujitsu s social value report Section 04: Making life better for employees It is important that Fujitsu works with suppliers that respect equality and inclusion 15% of respondents provide early interventions and active absence management that support wellness and recovery. 15% of respondents offered employment or work experience to disabled people. 45% of respondents said that they have a dedicated training budget for employees. 56% of respondents have a mentoring programme. 80% of respondents reported offering flexible working practices. 74% of respondents help with mentoring and coaching employees. Section 05: Working better with suppliers Supply chain experience 31% of respondents also supply to a number of other FTSE 250 companies. 62% of respondents also purchase goods from other smaller companies. 13% of respondents said they try to purchase locally. 74% of respondents had heard of the Prompt Payment Code. 81% of respondents experience difficulties being paid on time. SME Purchasing decisions are based upon: 37% 14% 6% 43% 37% of purchasing decisions based on cost 14% of purchasing decisions based on locality 6% of purchasing decisions based on ease 43% of purchasing decisions based on quality 10
Section 06: Responsible Business We asked Trading for Good members about how important being a responsible business was to their own business success 96% of Trading for Good members would be more responsible if customers demanded to see evidence of ethical behaviour This finding indicates that if more primary buyers were to demand more evidence of social and environmental impact then suppliers would respond positively. Trading for Good aims to encourage more large corporates and public sector bodies to focus attention on procurement criteria that helps create more social value. 66% of Trading for Good members have marketed their business based on their social and environmental impacts and the good work they do This evidence indicates that suppliers are aware that they can use their own social value to promote their business. Trading for Good aims to encourage smaller business to grow their businesses on the basis of doing well by doing good. 14% of Trading for Good members have received a recognition award for the work they do in their local community This finding indicates that a fairly low number of smaller businesses have received recognition for the good work that they do. Great recognition programmes do exist with organisations such as Business in the Community and The Big Society Awards. Trading for Good aims to encourage more awareness of awards programmes and put forward its members for such awards. 17% of Trading for Good members believe they have raised the profile/reputation of their organisation through taking action on social and environmental issues This finding indicates a low number of small businesses believe that their profile has been raised as a result of their good work. Trading for Good aims to improve the importance that primary buyers place on social impact. Trading for Good aims to shout about the great work its members do and to raise the profile of smaller businesses. Supply chain social value report 11
Example Trading for Good company profiles Excell Group PLC We operate in a relatively cut-throat industry and Trading for Good helps tell our story and create the correct perception about our business and our core values. Source Supplies The Trading for Good service increases our outreach and differentiates us from the competition. We have already implemented some of the processes shown in the guides. 12
Sum mary Understanding social value in a supply chain can help create stronger, better business relationships between buyers and smaller businesses. This is how: Nearly half (43%) of Trading for Good members are involved in some kind of activity with a charity or local good cause, with 60% making in-kind contributions. However, only 9% of members indicated they have a payroll-giving scheme. Larger organisations could help smaller organisations understand tax efficient giving schemes for charities. Many Trading for Good members are involved with helping young people into work. Mentoring and work experience are popular activities. Formal apprenticeships are less prevalent, with 30% of SME suppliers taking part in apprenticeships. The administration for managing an apprentice may be cumbersome for an SME. Larger businesses could explore how they can help small suppliers manage the apprenticeship scheme process. Trading for Good members appear more active on the environmental issues, with 88% taking some action to reduce their energy use. However a much smaller number are actually recording their carbon footprint. Larger organisations could look for ways to share measurement and audit tools that help measure carbon footprints. The overall activity of Trading for Good members in relation to equality and inclusion is lower than other areas of social action reported on, the exception being in relation to flexible working, where 80% of SME suppliers do offer flexible working practices. Larger organisations may wish to communicate the importance of equality and diversity to its suppliers when offering the opportunity to tender for work. A low number of Trading for Good members (15%) indicated that they actively employed disabled people. Larger organisations may wish to explore helping smaller businesses to look at the diversity of their employees. Awareness of the Prompt Payment Code is high, with 74% of Trading for Good members having heard of it. In general 81% of Trading for Good members reported experiencing difficulties being paid on time. Larger organisations may wish to ensure effective payment processes to help smaller suppliers get paid promptly. Nearly all (96%) Trading for Good members would do more in the area of responsible business practice if their customers demanded to see more evidence of ethical behaviour. We think this finding adds weight to the influence that the larger primary buyers have over their supply chains. Larger organisations may wish to support smaller businesses to be more responsible not by imposing procedural burden but by encouraging the right behaviour and sharing their own learning. In conclusion This pilot report clearly demonstrates that many small businesses are doing a great deal to create social value at a local level. On average, in the last 12 months, Trading for Good members each raised 1,087 from fund-raising, gave 200 hours of pro-bono help, donated 517 to charity, completed 20 hours of volunteering as well as generating employment and work experience opportunities. With over 4 million smaller businesses in the UK, the potential for adding social value to our communities is enormous. Our goal is to generate better information on supply chain behaviour. In doing so we can help larger businesses to share learning, encourage more of the right behaviour and reward businesses that are doing well by doing good throughout their supply chain. If Trading for Good can achieve this goal we should see the impact of the Corporate Responsibility Agenda multiplied across Britain s many smaller businesses. 13
This document has been prepared by Trading for Good using data gathered and analysed by Trading for Good, in each case, without input by Fujitsu. It is provided for general information purposes only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this report. Although the preparer of this report, Trading for Good, has made reasonable efforts in its preparation, no representations, warranties or guarantees, whether express or implied, are made by Trading for Good or Fujitsu that the content of this document is accurate, complete or up-to-date. To the extent permitted by law, all conditions, warranties, representations or other terms which may apply to this document or any information in it, or to its use, whether express or implied, are excluded. Liability for any loss or damage, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, even if foreseeable, arising under or in connection with use of or reliance on this report, is excluded. This includes exclusion of liability for loss of profits, sales, business or revenue; business interruption, loss of anticipated savings; loss of business opportunity, goodwill or reputation; or any indirect or consequential loss or damage. Would you like to know more about the impact your smaller business suppliers have on society? Contact the Trading for Good team at: enquires@tradingforgood.co.uk 020 3176 3633 Find our more how we can help or visit: tradingforgood.co.uk Trading for Good is funded and supported by: Santander (Headline sponsor) Cabinet Office NESTA BIS DLA Piper Fujitsu VISA Excell Group Ltd Dods Design: Blast (www.blast.co.uk) IT partners: Itineris By printing this report on Cocoon recycled paper the environmental impact was reduced by: 82 kg of landfill 12 kg CO2 of greenhouse gases 122 km travel in an average European car 1,715 litres of water 158 kwh of energy 134 kg of wood Source: Carbon footprint data evaluated by Labelia Conseil in accordance with the Bilan Carbone methodology. Calculations are based on a comparison between the recycled paper used versus a virgin fibre paper according to the latest European BREF data (virgin fibre paper) available. Results are obtained according to technical information and subject to modification.