Sustainable Procurement combines corporate social responsibility (CSR) principles into your company; assesses processes and decisions whilst warranting they still encounter the necessities of shareholders.
Whilst different positions within a company might be the centre of attention, Procurement professionals in the Sustainable Supply Chain of the future are currently attracting the main interest to their roles.
Leading global organisations like Coke, Amazon, AB InBev, Diageo, Henkel; have created the role of Chief Procurement & Sustainability Officer (CPSO) within their enterprises. CPSO position keeps growing in notoriety, as do their teams, even involving other sections such as Marketing or corporate social responsibility and Supply Chain.
Sustainable Procurement functions
Procurement encompasses everything from buying office vehicles, staff health and security or procuring the company with energy-saving systems; all these activities aim to a company strategic function. Sustainable Procurement signifies assuring the services and products a company requires are as sustainable as possible at the lowest environmental impact, costs and the most positive social results.
The 2015-17 UNDP Procurement Strategy conveys an organisation committed to achieving Sustainable Procurement values. As part of the strategy, UNDP strategy will focus on:
How your business can develop Sustainable Procurement processes
· Better integration of Procurement at the project design stage.
· Set your sustainability targets and policies.
· Containing Sustainability standards in the organisation purchasing estimations.
· Stimulating innovation through edge technologies, crowd-sourcing, and piloting functional specifications.
· Advocating and operating public/private partnerships with organisations that focus on innovation and Sustainability.
· To define a Code of Conduct for deciding on new vendors.
· By supervising procedures and valuations to foster vendor fulfilment in the UNDP SC.
· To gather and centralise all compliance certificates and documents.
· Heightening the already high-transparency standards in UNDP's Procurement performances.
· Agreeing on KPIs with chosen vendors and measuring their performance.
Dra Elouise Epstein, consultant in Kearney, consider Environmental, Social and Governance (ESG) a coming forward approach gaining focus in last years. Modern drivers are related to cost, ESG, efficiency and risk management. All rooted in SC strategy.
The Procurement leader is in front of digital transformation within organisations, driving sustainability proposals in our SC. "We think about the design of green products, and we fixate on what competitors do. But we as Procurement can influence the day-to-day buying within a company, whether it's the facilities our offices are in, the cleaning products in the facilities, or travel", Dra Epstein mentioned.
Procurement is predicted to become the path to a board-level role and the growing focus on Sustainability in our SC -employees want it, customers expect it, and investors require it. Procurement can deliver it; as iValua recent research mentioned, "organisations with advanced Sustainability programs are over two times more likely to report improved ROI, including sales increases and enhanced service quality. However, Sustainable Procurement is in its beginning stages."
The challenges in Sustainable Procurement
Procurement professionals need to value the importance of their roles in the Sustainable Supply Chain, as the purchaser budget and the power of their voice, and how Procurement impacts the SCs. About 70% of the product footprint throughout its lifetime happens in the Supply Chain, as it improves brand status, enhances sales, and bring down risk. By putting Sustainability outlooks into play, you can assess the outcomes, highly impacting the bottom line, whilst driving the C-suit attention.
As SCs become very complex, Procurement professionals' challenges are more significant. They must have internal and external standards to go with and cope with difficulty monitoring Sustainable practices through all the production stages.
Using existing tools and frameworks to set criteria and sharing with partners and third-party programs make it easier to audit factories and monitor processes.
Collectively, Procurement professionals can use their leverage to influence product design, aggregating the demand and pushing the same standards towards the industry; the sector needs to be more proactive. Procurement could take the leadership by anticipating others' problems to propose a new company culture.
Due to the pandemic, disruption to the SCs has challenged Procurement leaders to push for a more Sustainable Procurement SC. Goods shortage originated innovation, by manufacturing last-longer products, or repairable or redeployed goods.
Tips to boost Sustainable Procurement career
- Go deep and ask detailed questions that others did not ask; you have to get beyond the surface level questions.
- Collaborate, do not go in alone. Work with your peers to build a culture around doing this well to integrate your staff into the core business.
- Have a Procurement network because Sustainability is a problem that transcends all companies. Communicate and share because that is the only way to tackle common issues.
- Get involved and involve others to go ahead.
Final thoughts: Procurement professionals are vital influencers in future organisations as businesses move towards more transparent and ethical sustainability practices to deliver the full range of benefits for your company and community.
Are you considering a career in Sustainable Procurement?
Subscribe to our emails & exclusive free content.