How Procurement Professionals Contribute to Sustainability
In 2022, the world and consumers are much more aware of the changing world and are actively concerned by the sustainability of the businesses they buy from.
Consumers are far less likely to spend their money on the products you sell if your business is not authentically sustainable. That doesn’t just mean saying you are sustainable, but it means actively engaging in sustainability procurement and business operations; in a way that is authentic and transparent.
In the past, industry-leading companies have been able to rely on the fact that although consumers are environmentally conscious, they wouldn’t be willing to pay the higher cost of sustainably sourced products. However, now that is simply not the case for many consumers. The majority of consumers will now in fact pay more for an item if they believe it is helping the environment or social issues.
According to a United Nations report, 93% of the world’s largest 250 companies now report on sustainability. However, what is important to note is that it goes further than the company itself – companies must look to their suppliers as well and their actions. Consumers are expecting companies to take responsibility for their suppliers’ actions.
This is where procurement professionals have a unique position to drive change and redefine global supply chains, as they are in the position to leverage suppliers.
What is Sustainable Procurement?
The CIPS defines sustainable procurement as ‘the act of adopting social, economic and environmental factors alongside the typical price and quality considerations into the organisations handling of procurement processes and procedures.’
Sustainable procurement practices, as identified by the CIPS, include:
- Compliance with environmental laws and targets
- The removal of hazardous materials and waste in the supply chain
- The thorough vetting of suppliers for fair labour practices
The purpose of sustainable procurement is to genuinely improve the business and hit long-term of objectives.
Why Does it Matter?
Sustainable procurement has many benefits; it allows organisations to live up to their mission statements and builds trust among consumers and partners. The CIPS recognises the following as benefits of sustainable procurement:
- Risk & Reputation – bad sustainability practices, or supplier reputation can have negative blowbacks on the organisation and its brand values.
- Cost Reduction – through the consumption of energy costs, sustainable procurement partners should prevent cost increases, allowing more re-investment into the organisation.
- Revenue Growth – sustainable procurement practices can improve consumer satisfaction and loyalty, improving financials.
- Future Proofing – adapting to sustainable procurement practices now means that organisations can protect themselves against scarcity in supply and changes in social, economic and environmental factors.
How Can Procurement Professionals Drive Sustainability?
With that in mind, it is important to consider how procurement professionals can contribute to and drive sustainability across the supply chain.
Without visibility, change cannot happen. Therefore, one of the first things procurement professionals can do is create more visibility across the extended supply chain. This is where the least visibility currently is, and where the most impact can be made in terms of sustainable procurement practices.
Greater visibility of the supply chain isn’t only beneficial in terms of sustainability, but also in building great resilience in general. More visibility means a greater understanding of business risks and opportunities.
With increased visibility comes awareness, and with this a responsibility to take action. This includes awareness of modern slavery. Reed reports that the UK government estimates tens of thousands of people are in slavery in Britain today and 40% of the world’s 40 million slaves are in forced labour within the private sector.
It is essential that UK procurement professionals be aware of this issue, as small-scale actions can help to unify efforts. The UN has guidance and tools to assist companies and professionals with business practice and encourages companies to align operations with their 10 accepted principles.
Collaboration between procurement professionals and suppliers is essential to understanding environmental and social impacts further. To understand the wider impact, it is important to bring together data from suppliers, third parties and internal sources to curate a comprehensive view of the supply chain and by extension, sustainable procurement practices.
This collaboration should ensure that companies can engage suppliers on sustainability issues and if they are found to be falling short, action can be taken quickly. Over time this cycle of collaboration and support should ensure sustainability goals are met and suppliers continuously work towards these goals too.
Integrated Sustainable Decision Making
Once the foundations have been laid through better visibility, awareness and collaboration, sustainable decision making should be a permanent part of the supply chain process. Sustainable working practices can then be factored into supplier selection and the performance review process alongside standards of quality, price and speed of deliver.
If you are unsure where to start with sustainable procurement, we have a variety of procurement consultants ready and waiting to help. Procurement consultants can help businesses review their supply chain and set up new working practices that meet the requirements of sustainable procurement. Choix is dedicated to upskilling consultants and businesses through collaboration and transparency.