Every business must strive for sustainability to meet the demands of government, its customers, employees and other stakeholders.
The road ahead can be challenging – from hiring a sustainability consultant and achieving stakeholder buy-in to measuring emissions and making changes resulting from research and innovation, which come at a cost.
However, it can also be viewed as positive for the future of the business, as greater efficiency has a tendency to result in profitability, competitiveness and a stronger reputation.
How can procurement managers help to achieve sustainability?
Every member of staff within an organisation can work together to achieve sustainability. Stakeholder buy-in is essential to the success of any sustainability manager’s strategy.
But procurement can play a key role in driving positive change.
Sustainable procurement looks at social, environmental and governance factors as well as financial and economic ones.
Decision-making within procurement and the supply chain must now benefit society as a whole, not just the business. It must aim to achieve the lowest possible environmental impact, while also serving the needs of various stakeholders.
The benefits of sustainable procurement
With the effects of climate change already being experienced around the world, it should be enough for a business that it can help to prevent further damage to the environment by changing its activities.
The environmental benefits of more responsible procurement practices include:
- Reducing waste
- Resource efficiency
- Reducing emissions
- Compliance with environmental guidelines
But there are also some economic benefits of sustainable procurement, such as:
- more control over costs
- compliance with regulations and environmental legislation
- continuity and security of supply
- minimising risk
- stronger reputation
There are also social benefits of sustainable procurement, which include:
- positive contribution to communities
- encouraging employees to take part in community projects
- investing in projects to improve the lives of citizens
- eliminating unfair working practices, e.g. by eliminating child labour and paying a minimum wage
What is the triple bottom line?
Traditionally, a business’s bottom line only included financial performance.
However, now that businesses are under pressure to prove their sustainability credentials, they also need to include details of their social and environmental impact when reporting to shareholders.
This reporting on economic, social and environmental performance is known as the triple bottom line. It is often expressed as the 3Ps: People, Profit and Planet.
For procurement, this can cover a number of themes, to create value for all stakeholders.
It includes environmental protection, waste, hazardous materials, human rights, compliance, anti-bribery, fair labour, equality, diversity, employee wellbeing, education and development.
It communicates to staff, customers, shareholders and the wider community that the company is taking sustainability seriously.
Some examples of sustainable procurement
- Purchasing renewable energy
- Procuring energy efficiency technology and services
- Sourcing raw materials closer to the plant or manufacturing site
- Sourcing a greater percentage of recycled and upcycled raw materials for products and packaging
- Reducing transport emissions
- Identifying more sustainable suppliers
How can businesses adopt sustainable procurement into their strategy?
Sustainable procurement covers many different areas of a business, across different departments.
Therefore, it can easily be integrated into a sustainability strategy, particularly after specific areas for improvement have been highlighted through using a scientific approach and gathering data.
A good place to start is to educate staff in sustainability and green skills. At TSW Training, we offer a full range of IEMA courses to get employees at all levels up to speed on everything from environmental legislation to reporting and analysis.
This will mean everyone has a keen eye for where changes can be made across the organisation – big or small – in terms of procurement. Even changes in packaging and suppliers can have a huge effect.