Sustainable purchasing policies and strategies are based on the need to prepare for the future, mainly around supply shortages, the ability to cope with demand from emerging markets, cost pressures, and the ability to reduce them by reducing energy and waste consumption.
The commitment to Sustainable purchasing ensures that a company core sustainability values are present throughout the life cycle of its products and services.
Sustainable purchasing can help companies protect their brand reputation as it requires them to develop robust risk management. It allows them to identify better problematic suppliers and address weaknesses in their Supply Chain (SC), generating scandals and bad publicity.
Green Procurement programs can be as simple as purchasing renewable energy or recycled office paper, setting environmental requirements for suppliers and contractors.
It further covers numerous issues, for instance, child labour or the use of harmful chemicals that may affect people or the environment.
Sustainable Procurement is buying products and services for your business that demand you to be environmentally friendly, ethical and responsible. It includes the initial purchase, maintenance, and disposal (where applicable.) Your Procurement decisions should benefit your customers, society in general, the environment, and your business, for sure.
A commitment to Sustainable purchasing ensures that a company core sustainability values are present throughout the lifecycle of its products and services. The best practice should be to prepare a company for sustainable investments and purchases for the future by implementing sustainable policies that increase its long-term viability.
The main drivers of Sustainable Procurement (among others):
· Reduction of risks can cause a negative financial impact on the value of the brand due to bad practices of suppliers and non-compliance with environmental regulations.
· Cost reduction, such as reductions in the total cost of ownership related to the decrease in energy costs, the removal of excessive specifications, the reduction of consumption, and social and environmental compliance costs.
In the past three decades, Sustainable Procurement has little by little become an accepted part of doing business for large multinational companies. And while it is still not a ‘business as usual’ for all mid-size companies, that trend is changing, with the best performers already firmly far ahead of the rest.
In the latest research from business sustainability ratings, experts have found that the ever-escalating number of medium-sized organisations are now very focused on this area, with several of them among the members of a group well-known as Sustainable Procurement Leaders.
The Supply Management Insider whitepaper, produced in partnership with Eco Vadis, examines the progress that medium-sized companies have made, the benefits and challenges, and how larger companies can, and should, support them to make further advances for mutual benefit.
Using Procurement software can contribute to your company to achieve a strategic commitment to Sustainability and ensure you incorporate your company ethics and principles into your purchasing decisions. Before you begin any purchasing process, you can build Sustainability into business case approval and ensure you achieve the expected social, ethical or environmental value in the resulting contract through the use of Procurement pipeline management.
Further comments: Sustainable Purchasing offers opportunities for brand differentiation as they encourage companies to develop more innovative and sustainable products.
Are your Procurement responsibilities compromised with Sustainability practices in all areas?
Dave Food
M: +44 7775 861863
Photo by Danist Soh on Unsplash