Environmental, social and corporate governance (ESG) is increasingly becoming a top priority for organizations. Examples of ESG needs are endless - from climate change, to sustained poverty, to improving diversity - but sometimes it can be quite hard to know where to start. Or to understand what difference your organization can make with the resources it has available.
Which is what makes Coupa's approach to ESG so interesting. The vendor is the dominant business spend management (BSM) company in the SaaS market - and given its role in helping organizations manage their resources, it has identified that it could play a key role in shaping ESG thinking, via the use of its platform.
It is working on ESG priorities internally, but Coupa recognizes that it can make more of a difference by influencing change across its customers, and its customers' customers.
The top line takeaway is that Coupa is now adding configurations to its BSM platform that embed ESG principles at the core, given how Coupa has a clear idea of where its customer's money is being spent. This currently includes optimizing supply chains to reduce CO2 emissions and helping organizations make use of a more diverse supplier base, but this is just "the tip of the iceberg", according to Coupa.
Rob Bernshteyn, chairman and CEO at Coupa, says:
Businesses are being called upon to drive bold action to make the world a better place - from diversity and inclusion and environmental responsibility to sustainable and ethical supply chains.
We are proud to be part of this meaningful change - both through the progress within our company at Coupa, and the advancements we are helping enable within our Community. We will all become smarter together through this work to make a collective, lasting, and positive impact.
To cement its commitment to this agenda, Coupa has today released its ESG Report, which outlines the following priorities:
Environmental - Coupa will strive to reduce its own environmental footprint, looking at factors including sustainable procurement, energy and emissions, and waste. It has measured its 2019 and 2020 carbon footprint to inform a carbon neutral strategy and has formalized its Supplier Code of Conduct, which communicates expectations for suppliers to respect people, uphold human rights, protect the environment and act ethically.
Social - Coupa is cultivating a collaborative, diverse and inclusive culture and is "enabling employees, suppliers and communities to thrive". Two new employee resource groups have been launched (one for the LTBTQ+ community and one that aims to expand underrepresented communities). Coupa has also made nearly $600,000 in charitable donations and $75,000 in educational scholarships.
Governance - Coupa has said it is committed to reducing risks in global supply chains through risk management, data privacy and security, and ethical conduct. The vendor has now achieved Federal Risk and Authorization Management Program status and women now make up approximately 30% of the company's board of directors.
Influence via the BSM platform
We spoke with Donna Wilczek, SVP of Innovation & Strategy at Coupa, about the company's ESG commitments and about how it is looking to influence the Coupa community via its BSM product. At a very top level, Wilczek says:
This is the absolute right thing to do. Thinking about the impact to the planet in our local communities, making the world a better place - that is the responsibility of every business, of every person. And we take that responsibility very seriously.
When we assessed everything, we recognised that our biggest area of impact, really an exponential impact, is if we could take our business spend management platform and help organizations, spend smarter, make better decisions to impact the planet.
As noted above, Coupa has begun weaving ESG components as configuration options across its platform, in the hope that this will drive change beyond its four walls. At the moment it has 40 different configurations with an ESG slant. And whilst these are optional for customers, Coupa is actively promoting these as best practice and is carrying out an awareness and education campaign across its customer base to support adoption.
Wilczek gives the example of Coupa customer American Red Cross, which has about $1.3 billion in addressable spend and sought to increase the amount it spends with a more diverse supplier base. Thanks to the options across the Coupa platform, it was able to shift 10% of its addressable spend with diverse suppliers to 13.7%. When you're talking 13.7% of $1.3 billion, every percentage point can make a difference. Wilczek says:
Our goal is to make these things so easy for a business to configure that they would naturally do it.
One area Wilczek is particularly focused on is Coupa's customers' supply chain networks. She believes that significant change can be made to companies' CO2 emissions, with the help of Coupa. Wilczek explains:
If organizations really looked at their supply chain network, optimizing how they're delivering these products, and how they're getting the products back from their customers, it's a really big opportunity to reduce their impact to the planet. On a personal level I just wish more businesses would do it.
One Coupa customer was able to leverage the technology to rethink their overall network design and then put in place a programme that was able to help them reduce their CO2 emissions, per unit delivered, by 33%. If all of these businesses with a physical supply chain were able to rethink their network design, what could that impact be? And how fast could we make a change?
Coupa isn't considering this ‘job done' and is committed to continuously driving ESG improvement for its customers. One area that it is looking at is the community intelligence it receives via its platform data, which is anonymized, normalized and aggregated. It believes that by applying intelligence to this data, it can help move the needle for many organizations. Wilczek says:
How do you apply that body of data to the problem of ESG? Of creating better ESG results? Could you start creating carbon benchmarks of how much CO2 organizations within your supply chain are using? You can start comparing companies like for like, you start comparing processes, or routes, and you start optimising them based on benchmark data.
But not just surfacing up benchmarks, making recommendations too - take this specific action, or turn this capability on, in order to draw your result from A to B. And for us, this is again an opportunity for our customer community to come together to work in our community advisory boards, and to ideate with us.
Wilczek adds that Coupa is measuring its success specifically using KPIs that identify how many customers are leveraging these types of sustainable BSM configuration capabilities. But more importantly, Coupa wants to drive the message home that a focus on ESG and sustainability actually mean better business outcomes in the long run. Wilczek says:
I believe that and I have seen that to be true, I've seen our customers be successful with their ESG programmes, and in turn, increasing their profits. And I feel that the consumers, our customers, have certainly changed - consumers are expecting more from the companies that they are buying from. And these consumers are really voting with their dollars.
I would say just get started, Because every single day that you are delaying you are delaying your business outcome you're delaying your business results.