takes to pay its suppliers the stronger its bargaining power is with them. Consequently, this is considered as key evidence of a strong franchise.
We beg to differ
High-quality companies require a healthy supply chain. And a healthy supply chain requires suppliers getting paid within a reasonable time frame. Why is this important? Long payment cycles leave most suppliers with little choice but to borrow at high interest rates to meet cash flow needs or, eventually, dilute quality standards. Smaller and fragmented suppliers, such as farmers, are disproportionately affected by one-sided payment terms. Banks often treat such borrowers as high risk, compounding their cash flow problems.
A bankrupt, low quality or an unpredictable supply chain can do more harm to a company's sustainability than the savings accrued in the short-term by squeezing it. Paying suppliers directly and in reasonable time is not only the right thing to do but also the smart thing to do.
It is the right thing to do as there is a clear and quantifiable positive impact on the lives of many, particularly smaller suppliers who have been disenfranchised over decades. A more sensible approach impacts numerous Sustainable Development Goals (SDGs), including, but not limited to, no poverty, zero hunger, reduced inequality, decent work and sustainable communities. This is impact at scale.
It is also the smart thing to do because trust is built by treating suppliers well. A trusted supplier stays with you during good and bad times and will ensure quality. This positive circle of trust creates long-term entry barriers that are often underestimated by companies and investors.
Climate change, diversity, and systemic inequality topped the engagement list for T. Rowe Price, with the global fund manager pressing for improved disclosure from corporations and asset managers on ESG issues.
Establishing a successful Australian hydrogen industry hinges on managing three challenges - cost, scale, and social acceptance, according to a panel of experts speaking at the Australian Petroleum Production and Exploration Association (APPEA).
The Australian Petroleum Production and Exploration Association (APPEA) conference was timed with an announcement from the federal government that new offshore petroleum exploration acreage has been released.
TRUE Infrastructure Management has joined the United Nations-supported Principles for Responsible Investment (PRI).
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