Sodexo announced its official Commitment to Action at the 10th Clinton Global Initiative Annual Meeting in New York. The commitment supports the growth of small to medium sized enterprises (SMEs) with a pledge to purchase products and services totaling $1 billion by 2017. The Commitment to Action aims to benefit as many as 5,000 SMEs in 40 countries, including the U.S., with 1,500 of those businesses being women owned and operated.
There are 23 million SMEs in the U.S., accounting for 54% of all sales in the country.
“Small and medium sized enterprises are key engines for growth and job creation,” says Sodexo President/CEO George Chavel. “They account for 60-70% of GDP and 70-90% of total employment according to a global economy study by the OECD. Increased support for SMEs means greater support for local communities and access to innovative products and services for businesses and their clients.”
Sodexo’s Commitment to Action to invest $1 billion in 5,000 small to medium size businesses is projected to generate more than 250,000 jobs over the next three years. The first year of the Commitment to Action will focus on developing local supply chain inclusion program guidelines, including incentives for supply management teams to engage with SMEs, enhanced tracking of SME sourcing and the development of tools and resources along with guidance on streamlining the integration of SMEs into the Sodexo supply chain.
During the second year of Sodexo’s Commitment to Action it will create SME supplier training resources for deployment. The deployment of tools and resources will augment existing programs in 26 countries. It will begin to embed new standard operating procedures that include all the necessary elements for a successful SME program.
Finally in the third year, the new SME program will roll out to 14 additional countries where Sodexo operates. It is currently targeting operations in Africa, Asia and Latin America.
One third of the world’s SMEs in the formal sector are currently run by women, with wide variation across countries, leaving plenty of room for growth. Sodexo will, for the first time, expand tracking mechanisms to identify women-owned SMEs around the globe, something that will allow the company to better understand sourcing patterns and opportunities to work with new and existing suppliers. It will also work with WEConnect International, which helps women-owned businesses succeed in global value chains. WEConnect will specifically work with Sodexo in supporting women-owned businesses in targeted countries including UK, Canada, Australia, Peru, Chile, and India.
In addition to women-owned and a variety of other SMEs, Sodexo’s commitment will also benefit small agricultural enterprises. It will continue its work with intermediary organizations and cooperatives in efforts to expand opportunities for local suppliers. Examples include Sodexo’s work as far away as Laos where we purchase rice from a group of 500 small farmers who are participating in rice cooperatives and as close as the third generation family-owned and operated Shlagel Farms in Waldorf, Maryland, just a short drive from Washington, D.C.
“When large organizations, companies like Sodexo, make a commitment to smaller operations or smaller farmers, that money goes directly into the small farmers household, it’s going into paying for his children’s education, upgrading equipment on his farm and it gives him the ability to grow his business,” says Russell Shlagel, owner of Shlagel Farms. “It’s a win-win for everybody. It’s a win for the farmer and the community. It’s a win for the large company because it gets the fresh local products that are in such high demand by today’s consumers.”