Sustainability – payments and society
When it comes to sustainability, companies are often vocal in their support for environmental change but what about social and governance initiatives? These rarely receive the same level of attention and yet they are an integral part of the equation.
Prompt payment should be seen as a central element of environmental, social and governance (ESG) initiatives. Not only do good payment practices build trust, they are a potential catalyst for businesses to invest in other sustainability efforts.
Intrum’s 2022 European Payment Report shows that business are saying the right thing when it comes to sustainability...
Putting payments philosophy into practice
It is heartening that seven in ten respondents think large businesses have a responsibility to society to ensure that they make their payments to smaller businesses on time.
This figure is relatively consistent across Europe, though Bulgaria, Austria, Latvia and Norway are those least likely to agree. By contrast, Portugal, Serbia, Slovenia and Croatia have higher levels of support for this sentiment.
While 61 per cent say they rarely think about the negative impact they have on small suppliers by paying late, this is lower than it was in 2021 (69 per cent), giving hope for progress.
There were significant differences between European countries on this point. In the Czech Republic, Finland, Romania and Slovakia, more than seven in ten admitted they rarely think about the impact, whereas less than half of respondents in Austria, Bulgaria, Ireland and Serbia said the same.
Yet even those with good intentions aren’t necessarily translating them into daily practice. Despite the majority belief that companies have a social responsibility to pay smaller suppliers on time, a third (33 per cent) admit to paying their own suppliers later than they would accept from customers, up from 29 per cent in 2021.
Businesses are talking the talk when it comes to prompt payment, but many are not following this up with good practice. There is definitely room for improvement, particularly from large corporates to smaller suppliers, for whom late payment can have a major impact.Vanessa Söderberg, Global Sustainability Director
Customer discrimination rising up the agenda
There is also growing recognition of the need to address potential incidents of customer discrimination, such as discrimination on racial or social background.
Klarna’s Jan Hansson describes how his business has strict internal policies in place around anti-discrimination. “Our due diligence procedure, where we review the send-outs and the processes regarding vulnerable customers, and the feedback of complaints to Klarna, is very thorough. It’s even more important when we send claims to debt collection, due to the stigma around that, so we have high requirements for the collection agencies that we work with,” he says.
Unethical practices among commercial teams preoccupy business leaders: 46 per cent worry that they cannot be completely sure their sales teams aren’t discriminating in some way. A similar number of respondents expect scrutiny to rise in this area.
Leaders now need to look at every part of their businesses through an ESG lens. In the context of payments, there is a clear ethical requirement for businesses to support their supply chains, settling their accounts with smaller suppliers as quickly as possible. How businesses treat their struggling customers will also come under greater scrutiny.Intrum's President & CEO, Anders Engdahl
Download the full report
The insights from this article are based on the European Payment Report 2022. You can download the full report below.
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