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CBRE and Zurich’s approach to boosting spend with diverse suppliers and social enterprises

PL Staff

How to grow your social impact spending by acting as advocates for diverse and social enterprise suppliers with clients and internal stakeholders?

World Procurement Awards 2022 shortlisted initiative

This initiative was shortlisted for the Intel Supplier Diversity and Inclusion Award at the World Procurement Awards 2022 after being assessed by a judging panel of 37 experts. The panel was impressed by the progress being made and felt this initiative should be shared and celebrated.

Challenge

Like an increasing number of companies, property services giant CBRE recognises the value of using procurement to drive social impact through spending with diverse suppliers and social enterprises. As well as helping to create a more equal society, this can also drive improvements in resilience and innovation, and enhance a company’s attractiveness to clients with similar social goals. However, this posed a challenge for CBRE’s Global Workplace Solutions (GWS) UK procurement team, because of its decentralised nature. The business unit sources £1.5bn of goods and services annually for properties occupied by CBRE clients in the UK, including hard and soft facilities management, with most purchasing decisions being made by those working directly with the client to ensure their needs are sufficiently met. That means that, unlike with a centralised structure, it can be more challenging to directly influence sourcing decisions and ensure they are maximising the opportunity to incorporate diverse suppliers. That’s on top of more common challenges of working with diverse suppliers and social enterprises, including the need to source accurate data on the diverse status of organisations, and the well-established roots of CBRE’s existing supply base, which can be difficult to compete with.

Zurich Insurance Procurement approach

With clients such as insurance giant Zurich Insurance (a leading multi-line insurer that serves its customers in global and local markets) pushing to include a greater proportion of social enterprises in their Tier-2 spending in tender processes, overcoming the challenges outlined above has become an increasingly important priority for CBRE. Since 2019, the GWS procurement team has been working with internal and external stakeholders to achieve and drive higher diverse spend across its client base.

What is GWS?

Part of the wider commercial real estate giant CBRE, Global Workplace Solutions provides clients with a range of property services including transaction and advisory services, facilities management, project management and energy management. Organisations are increasingly bundling facilities management services, such as security, cleaning and maintenance, together to provide greater economies of scale, reduce internal management teams, and increase the visibility of spend and performance. GWS works with clients to create a package that includes the right mix of CBRE-delivered services and third-party suppliers – providing the benefits of bundling but the flexibility to select suppliers that can help them meet specific needs including supplier diversity, local sourcing, sustainability and specialist requirements such as data centres, labs and healthcare.

Approach

GWS UK’s supplier diversity programme is led by the UK supplier engagement team, which is also responsible for initiatives such as relationship and performance management and sustainable procurement. The programme defines diverse suppliers as those which are majority owned and operated by an individual or group that’s part of a traditionally underrepresented or underserved community, (including women, ethnic minorities, veterans, disabled and members of the LGBT community), and also incorporates social enterprises – those that have a social or environmental mission embedded in their governance and donate at least 50% of their profits to support this mission. The business also recognises spend through micro, small and medium enterprises, but this does not directly contribute to its diverse spend targets. Its activities span a few key areas:

  • Measuring and monitoring diverse and social enterprise spend
  • Identifying new diverse suppliers to ensure coverage across all key categories of spend
  • Partnering with advocacy groups
  • Helping supplier development
  • Influencing stakeholders

Measuring and monitoring diverse and social enterprise spend

GWS UK uses CBRE’s global supplier diversity platform to support engagement and track spend, and created a dashboard within that to monitor progress against targets. To determine what was achievable, GWS UK procurement began by benchmarking its existing supply base to determine current levels of supplier diversity. This involved incorporating questions about diverse status into the company’s onboarding process, as well as working with supplier advocacy groups to compare CBRE’s current supply base against their databases of diverse suppliers. The function has its own targets for GWS UK of £40m, which contributes towards the global CBRE enterprise’s aim of hitting $3bn of spending with diverse suppliers by 2025.

Partnering with advocacy groups and helping suppliers to develop

To find opportunities with new diverse suppliers and social enterprises, and identify how it needed to change its approach to support them develop, the supplier engagement team hold leadership positions and participate in monthly meetings with a number of advocacy groups, including:

The meetings include discussions about upcoming events that either party can support to raise awareness, opportunities for new diverse suppliers, and how existing diverse suppliers can be promoted further. The partnerships have allowed GWS UK to identify barriers it needed to eliminate and development opportunities it should implement, including:

  • Dividing work into more manageable packages to make them accessible to smaller companies.
  • Providing preferential payment terms to diverse and social enterprise suppliers of 30 days.
  • Dedicated support through the Supplier Engagement Team to make it through the onboarding process, and reduced liability requirements.
  • Connecting suppliers with internal stakeholders.
  • Sharing CBRE’s funds from the Apprenticeship Levy, a UK Government training incentive scheme, to support diverse suppliers’ growth.
  • Promoting the benefits diverse suppliers can bring both internally and externally to drive the movement of change.

CBRE is also a partner of the Buy Social Corporate Challenge, an initiative led by Social Enterprise UK that supports a group of high-profile businesses to collectively spend £1bn with social enterprises through their procurement. This includes opportunities for social enterprises to pitch to corporate buyers with the aim of forging new business relationships. The team also provides mentoring and support with activities such as marketing and business development. Each category lead is assigned a diverse supplier they will meet with regularly to give advice and support, as well as making relevant introductions to key people in the business and helping to reduce barriers to working with GWS. In one case, the team identified that one of its suppliers – Corps Security, which donates its surplus profits to charities supporting veterans – qualified as a social enterprise and supported it to achieve formal accreditation.

Influencing stakeholders

With spending decisions in GWS UK being decentralised, it was vital for the team to act as advocates, connecting diverse suppliers and social enterprises with internal stakeholders and clients and making the case for them. Supplier diversity is embedded in the business’s processes, with sales documents calculating the percentage of diverse and SME or local supplier spend, but driving change also relies on influencing the mindset of those who make decisions. The team uses a number of channels including newsletters and brochures to share perspectives on how diversity drives innovation and examples of how supplier diversity can deliver social impact to ensure that everyone working directly with clients recognises the benefits of diversity and understands the differences their decisions could make to individuals, communities and clients. It also brings together clients with diverse and social enterprise suppliers at live events and webinars to help them build connections and learn from each other, with a total of more than 500 attendees in 2021.

Boosting social spend with Zurich

A recent contract with CBRE client Zurich illustrates the supplier diversity and social enterprise approach in action. GWS UK was responsible for assembling a roster of third-party facilities management suppliers to service the insurance company’s UK offices. Zurich is also a member of the Buy Social Corporate Challenge and expressed a desire to incorporate more spend with social enterprises, so, the GWS UK team worked with its advocacy groups to identify and qualify several of these to support the client, including:

  • Corps Security, which donates surplus profits to charities supporting veterans.
  • Tarem Services, a cleaning provider that aims to tackle in-work poverty by providing its employees with shares in the company and a monthly profit-share scheme.
  • Encore Environment, a waste management consultancy that aims to ensure more waste is reused and recycled, minimising the amounts sent to landfill and reducing carbon emissions.

In total, the three-year contract comprised a target of 50% diverse suppliers and social enterprises. Louise Sheppard, Zurich’s UK Head of Workplace Services & Premises Sustainability, said: ‘‘At Zurich, our ambition is to see our procurement systems drive positive social, environmental and ethical outcomes. Zurich understands the importance of putting people and communities first and we are looking forward to seeing where our joint social value journey will take us.”

Outcome

Results

By acting as advocates for diverse and social enterprise suppliers with clients and internal stakeholders and providing them with support to develop, GWS UK’s team has dramatically grown its social impact spending. The programme has driven strong results, with diverse and social enterprise spending surging by more than 300% in its first year – from £5.2m in 2020 to £22.1m in 2021. It has been particularly successful in supporting social enterprises, which account for £19.6m of the total, but has also driven spend with ethnic minority-owned businesses (£1.3m), women-owned businesses (£960,000 and veteran-owned businesses (£95,000). CBRE client Zurich’s Richard Farrant, Global Category Manager for Property and Workplace services, said: “This shows how large companies such as CBRE can generate positive social impact by partnering with social enterprises at Tier 2 to create compelling service offerings that also offer value for money. By positioning social impact as a key part of the supplier selection criteria, we encouraged all suppliers to develop innovative solutions to meet our social impact aspirations. CBRE interpreted this requirement well and brought together a one-team approach that integrates CBRE’s own teams with social enterprises” Mike Bullock, director at Corps Security, said: “CBRE highlighted to our business leaders the very positive social impact of our own organisation and operating model, leading us to gain social enterprise status.”

Advice for others

Having delivered strong results from the programme, the Supplier Engagement team shared the following tips for success in boosting supplier diversity and social enterprise spend, and the associated benefits this can bring:

  • Define your approach: Ensure you have a clear definition of supplier diversity and apply this to spend to determine your baseline
  • Draw on advocacy groups: Engage advocacy groups to ensure you have access to their databases of suppliers and to make the most of their expertise and knowledge
  • Communication: Using all marketing and communication channels available to raise awareness of both the programme and specific suppliers is essential to gaining buy-in and driving spend
  • Embed supplier diversity/social enterprises in the procurement and sales process: Offering and encouraging clients the opportunity to increase their Tier-2 spend with diverse and social enterprise suppliers as a standard option will drive uptake in the long-term
  • Monitor and Manage: Add supplier diversity spend to your procurement and business dashboards with annual goals
  • Supplier Development: Proactively work and develop diverse partners to enable them to meet business needs.

Next steps

Having already delivered a huge increase, GWS UK aims to more than double its spend with diverse suppliers and social enterprises to £45m by 2023. To expand its programme further, the team is also planning to partner with an LGBT-owned supplier advocacy group which will help it to connect with more suppliers.  It also aims to be able to offer at least one diverse supplier in every category of spend, enabling colleagues to consider a diverse option for every tender/RFP.

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