Procurement with Purpose Newsletter No. 14 - May 9th, 2023

The UK’s King Charles the Third was crowned on Saturday, in a service that was rather strange and mentioned God a lot. You might have thought a divine all-powerful entity would have arranged better weather, but there you go. Anyway, I should not be flippant about such a deeply meaningful moment, that is going to lead to a whole new era of wealth, fairness and glory for the UK. Actually, a vaguely functioning health service, potholes in the road mended and rivers that are safe to swim in would be a start.

On that note, Charles has been right about many issues in his life (he’s been wrong too a few times) and over time, public opinion has swung behind some of his previously unfashionable stances. That is true perhaps most strongly in terms of his environmental concerns. I know he has to be careful about politics now, but wouldn’t it be great if he told the water companies that unless they sort out their pollution of rivers, he will send their CEOs to the Tower? Give them two years, then send in the beefeaters if they haven’t drastically reduced sewage discharges.

?------------

Now, a genuinely positive diversity story. In last week’s English local council elections, in our electoral ward, a fairly leafy and affluent enclave with a lot of ￡1 million+ houses, in true blue Surrey Heath (see the picture above), we have just elected a married same-sex couple, Lisa and Kel Finan-Cooke, as our two councillors.?They were part of a Lib Dem landslide, with the party winning control of the council with 21 out of 32 seats.

When I first met Lisa and Kel, although I immediately liked them a lot, I did wonder if they were the right candidates demographically for what I felt was quite a “conservative” (socially and politically) locality. But I misjudged my neighbours! The fact is that they were clearly the best candidates. They already do a huge amount of community work – the list of activities and organisations they are involved with is quite exhausting just to read. So what our tolerance for diverse people has done is opened up the opportunity for everyone to benefit from their skills, passion and knowledge.

It should be the same argument for organisations when they look at embracing DEI (diversity, equity, inclusion) approaches for both internal staff and through the supply chain. As we’ve said many times before, this is not about “being woke” or embracing purposeful business just to make the CEO feel good about themselves. Promoting diversity is about getting the widest possible talent pool in the supply base and internally, and motivating all our stakeholders to feel positive about the organisation. ?When it comes down to it, what matters for business is competitive advantage, so don’t miss out on the potential gains that great people can give you directly or through your suppliers, just because of out-of-date prejudice. Not many years ago, I don’t think Kel and Lisa would have stood a chance here. Now I’m sure they are going to do a great job for the 4,000 voters of Watchetts.

---------------

The market share of electric cars in the UK actually declined in April, to 15.4% and the prospects don’t look too good either. ?“According to the Society of Motor Manufacturers and Traders (SMMT), high energy costs and insufficient charging infrastructure will dampen demand for new battery electric cars this year. It predicted that registrations would fall in market share from 19.7 per cent of new cars to 18.4 per cent. Next year’s forecast had been cut from 23.3 per cent to 22.6 per cent”.

This is down to two main factors. The cost of the vehicles is one, allied to the UK government removing or reducing the tax incentives recently. Then we have continuing concerns about the availability of charging points. The increase in electricity prices hasn’t helped either in terms of running costs. ?What is perhaps even more worrying is the decline in second hand prices for these vehicles. Recent analysis showed the price of an electric BMWi3 was ￡39K in 2020 but the EV is now worth just ￡13,900, depreciation of 64%. But the petrol BMW 3 series car which cost ￡32K in 2020 is now worth ￡22,360, a loss of just 30%.

In 2030, just seven years away, sale of new petrol and diesel cars will be banned in the UK – but it doesn’t seem that the public are convinced about this. I can see a new market developing in the restoration of old petrol cars to keep them on the road long after 2030.

In other countries, tax incentives and a more coordinated approach to charging means that sales are still rising. But for businesses in the UK that run some sort of company car scheme, you need to keep an eye on the situation. Declining second-hand values can greatly increase the cost of such schemes.?

----------------

Should we add “ultra-processed foods” (UPFs) to the list of things that are bad for us and maybe should be banned – joining cigarettes, gambling (arguably) and asbestos (definitely)? ?A new book, Ultra Processed People, by Dr Chris Tulleken suggests that UPFs, which include many ready meals, mass-produced bread, biscuits, cakes, confectionery, breakfast cereals, snack products, flavoured yoghurts, and more have effects on our bodies that lead to over-eating. Ironically, he says that almost anything labelled “low calorie” or “Lite” is an UPF. The book has shot to the top of the best-seller list, so there is clearly an appetite (sorry…) for this sort of idea.

It may be that UPFs fool our metabolisms into thinking we need to eat more, when in fact we have had quite enough calorific value to keep us going. Or it may be that additives, colours, flavours and emulsifiers in those products are having some effect on our gut microbiome that we don’t fully understand yet. The link with obesity is not scientifically proven I believe, although a study has shown a link between UPFs and heart disease. And there seems to be quite a lot of circumstantial evidence in terms of weight and obesity. ??

This topic also highlights an interesting conundrum that applies to procurement with purpose and the wider sustainable business movement. Can an organisation really be considered to have positive ESG, sustainability or purpose credentials, if its core business is inherently bad for humanity??We see this dilemma with oil and gas firms, as well as those mentioned earlier such as the tobacco industry. But if more evidence emerges suggesting that UPFs really are behind the obesity epidemic, would we then have to put all the firms that produce them – a group that includes some of the largest and most respected consumer businesses in the world – into that “enemy of society” bracket?

-------------------

This week’s temperature records were set in Laos and Vietnam. As the Guardian reported: “All-time temperature records were broken in Vietnam and Laos last week. On 6 May, Hoi Xuan in Vietnam reached a scorching 44.1C, breaking the previous record for the country of 43.4C, set in 2019. On the same day, Laos recorded its highest-ever temperature, , which reached 43.5C in Luang Prabang”.

Just this year, we saw January records broken across much of Europe, then more recently Spain and Thailand saw new highs. Where will be next??As we always say at this point, make sure extreme weather is high on your list of supply chain risks …

____________

This week’s tenuous music link is all about recycling and circularity. On her new album Raving Ghost,?singer songwriter and ace guitarist Olivia Jean uses ideas and scraps of songs picked up from various sources (from rockabilly to punk) to make indie-garage-rock music that often has a retro feel yet sounds like 2023 too. For instance, she re-imagines Enya’s gentle, dreamy Orinoco Flow as a Blondie-style pop-punk gallop, and it somehow works brilliantly. You can find that on Spotify, but here’s the video for the title track from the album.?