By Sanjala Hari
Recently, global movements on non-discrimination, human rights and equality have brought a strong focus on how companies are looking at inclusivity and equality in their workplace. Apart from racial and ethnical diversity, removing any biasness against gender in the workplace has also contributed to having in inclusive team. A few companies are now looking beyond empowering women in their own workforce to also include such considerations during their procurement processes. Gender responsive procurement is now gaining traction, and many see the benefit in enabling purchase of gender-sensitive goods and services and supporting women-owned businesses.
WHAT IS GENDER RESPONSIBLE PROCUREMENT?
A few companies are now looking beyond empowering women in their own workforce to also include such considerations during their procurement processes.
The UN Women define gender responsive procurement as ‘the sustainable selection of goods, civil works or services that takes into account their impact on gender equality and women’s empowerment’. By enabling gender responsive procurement, companies support the elimination of discrimination against women by treating male and female suppliers on equal terms. Gender responsible procurement aligns with Sustainable Development Goal (SDG) 5, although there are specific targets related to women and girls in SDG 12 of the SDG 17 goals. Gender-responsive procurement also aligns with one of the seven drivers identified by the UN High-Level Panel on Women’s Economic Empowerment.
WHY SHOULD COMPANIES CONSIDER GENDER RESPONSIBLE PROCUREMENT?
Gender responsive procurement practices have had a positive impact on profitability and return on investment.
Women owned businesses today contribute significantly to the global economy. According to Global Entrepreneurship Research Association report in 2014, there were approximately 224 million women entrepreneurs worldwide. Women were also involved in over 80 percent of purchasing decisions worldwide (Dalberg, 2014). According to World Bank, in 2012, 35% of all small and medium enterprises (SMEs) are owned by women. Supporting women entrepreneurs has its own benefits. A study by McKinsey in 2015 confirms that gender-responsive procurement practices have had a positive impact on profitability and return on investment. The report also indicated that if women played an identical role in labour markets to that of men, as much as USD 28 trillion, or 26 percent, could be added to the global annual Gross Domestic Product by 2025.
WHAT ARE THE BARRIERS FACED BY WOMEN PARTICIPATION IN BUSINESSES?
Despite the various benefits of supporting women entrepreneurs, women owned businesses lag behind businesses owned by men due to various socio-cultural challenges, and/or economic and legal inequalities. Social and cultural expectations and unequal distribution of responsibilities persists for women even after they enter the workforce or start a business. Women also face challenges in access to financial capital, social and human capital. Women face challenges in acquiring collateral to start a business as they might have less access to financing than men in certain geographies. Similarly, some research shows that women find difficulty in establishing business networks and connections. Due to unequal preference to education among genders in certain geographies, women often lack the managerial experience to start a business.
WHAT CAN COMPANIES DO TO PROMOTE GENDER RESPONSIBLE PROCUREMENT?
The foundation of public procurement is on the principles of equality, non-discrimination and transparency. Public procurement has a large potential to promote gender responsible procurement. Companies can allow inclusion of gender criteria during assessment of proposals submitted. Companies can evaluate the proposals submitted based on criteria such as whether the project team is gender-balanced, and balanced presence of women and men in decision-making positions.
Companies can expand their network and business relationships to target businesses that are primarily women-owned
Companies can expand their network and business relationships to target businesses that are primarily women-owned – which could include small and medium size businesses run by women entrepreneurs. This would also include companies to fit technical, financial and other prequalification and qualification requirements based on the size and complexity of the opportunities, such that women-owned SMEs are not blindly eliminated during the procurement process. For unsuccessful bidders, providing a useful feedback on their strengths and weaknesses can help provide opportunities for improvement, especially for women owned businesses.
For businesses looking to diversify their overall supply chain and possibly reduce their spending on suppliers, procuring from women owned business could be the answer. Similarly, incorporating gender sensitive requirements during procurement process and engagements can not only support your company’s commitment towards gender equality, but also help companies mitigate any risks on gender discrimination or abuses in supplier operations.
Reach out to us to find out more about how you can include gender considerations in your procurement processes. More on our supply chain services .