MSA Purchasing Practices
About the data
Purchasing practices refer to the ways companies interact with suppliers: the demands they place on them (e.g. price, deadlines, order volumes) and how those demands are negotiated. Research has showed that certain purchasing practices increase the risks of forced labour. For example, if a buyer increases the volume of an order at short notice, this can force suppliers to rely on forced overtime work to meet the buyer's requirements.
Methodology
With this metric, we want to understand whether companies take actions to improve their purchasing practices. Companies might show that they ensure responsible purchasing practices in the following ways (non-exhaustive list):
- mention a "two way" supplier code of conduct or shared responsibility contracting
- mention of avoiding the following practices (irresponsible or unfair trading practices): cancelling and delaying orders; refusing to pay for orders; demanding retrospective discounts; issuing sudden changes in order volumes; and paying for orders very late
- mention of the following practices: consulting suppliers on deadlines, prompt payment, taking into account cost of labour and living/fair wages fin price negotiations, considerations for the impact of contract requirements on suppliers and workers
- company-wide communications about responsible purchasing practices
- analysis on the impact of sustainable purchasing practices on business relevant outcomes
- explicitely linking purchasing practices and increased risks of violations
- membership in Better Buying https://betterbuying.org/download/bbpi-report-2023/
Please note that statements might refer to "responsible purchasing practices" to make general statements about their engagement strategy with suppliers. It does not automatically mean that they meet the criteria for this metric. Companies should explain what they are doing to ensure responsible purchasing practices.