6 Procurement Strategies to Rethink Sustainability

Introduction:

Organisational performance depends on minimising Scope 3 emissions and overhauling procurement procedures in today’s competitive business environment. EcoVadis and Accenture experts discussed advancing sustainable procurement at SievoFriends 2024. Their debate stressed the significance of rethinking procurement methods for decarbonisation, net-zero aspirations, and ESG compliance. This paper provides six buying tactics to boost sustainability in your company.

Rethinking Sustainable Purchasing

Meeting legal requirements is important, but sustainability demands are serious. Starting your sustainable path demands a major procurement mindset change.

“Compliance is the minimum requirement, but you can go all the way to strategic leverage for resilience and growth.”

EcoVadis Global Director of Content and Communications David McClintock

Supplier Cooperation Sustainable Purchasing

The Value of Visibility in sustainable procurement

Effective, sustainable buying requires supply chain visibility. Only 27% of firms can see 75% of their tier 1 suppliers. Unleash your expenditure data to achieve effective carbon reduction activities. Clear impact requires clean data.

Lack of transparency can inhibit compliance, risk management, and improvement prioritisation. He adds, “If you don’t have visibility, you start having compliance issues, your risk management capability will drop, and improvement efforts are harder to prioritise.”

Key Sustainable Procurement Skills

Key competences are needed to include sustainability into procurement processes:

• Sustainability for Everyone: Cots and carbon must be a company-wide concern, not a departmental one. Just act, not react.
• Skills in Green Procurement: Developing sustainable procurement abilities is essential. Your approach should identify high-emitting providers and categories and implement mitigation actions. AI-powered analytics that identify urgent decarbonisation potential boost strategy and supplier engagement.
• Active Supplier Cooperation: Deeply engage suppliers to ensure they support your environmental aims. Data and automated mapping of SBTi vendors’ emissions and expenditure coverage might help drive significant reduction actions. “Walk the talk with suppliers,” says Katainen.

Sustainability Data Use Cases

Effective sustainability strategies are data-driven. Sustainability data benefits many stakeholders, not just ESG leaders.

These procurement methods use sustainability data well:

• Ensure your buying decisions complement your sustainability goals by selecting environmentally friendly vendors.
• RFP/RFx criterion: use sustainability criteria to identify suppliers that outperform their peers with good ESG performance.
• Supplier relationship management: work with major suppliers to enhance practises and meet emission reduction targets.
• Contract negotiation: incorporate terms to guarantee vendors fulfil environmental standards and support your sustainability goal.
• Purchase ordering (PO) systems: encourage greener choices by prioritising eco-friendly items.
• Risk management: identify and minimise environmental compliance and disruption risks.
• Spend management: link procurement budgets with sustainability goals and strategy by managing sustainable product and service spending.
• Supplier recognition programmes: recognise sustainable suppliers to encourage continual development and better partnerships.

Only 25% of ESG programmes are digitally linked into procurement plans, despite their potential. For sustainability programmes to scale and succeed, digital integration is essential.

Strategic Engagement and C-Level

Successful sustainable procurement programmes require strategic engagement and C-Level buy-in from senior leadership. Expanding the business case to support ethical procurement is difficult but vital.

“Strategic engagement and C-level buy-in are significant for the success of your programmes,” he said.

Addressing scope 3 emissions requires commitment and responsibility of environmental issues:

6 Sustainable Procurement Lessons

1. Visibility and Priorities: First, analyse your supply chain and prioritise sustainability.
2. Cooperate with Suppliers: Sustainable buying requires strong supplier interaction.
3. Improve Skills and Training: Train your staff on sustainable procurement.
4. Use Metrics in Processes: Keep sustainability metrics in your purchase procedures.
5. Digitise Procedures: Digital technologies can scale ESG initiatives.
6. Obtain C-Level Support: To maintain support and resources, keep sustainability in mind for your leadership team.

Implement these key insights to make sustainable procurement a competitive benefit for your company. According to expert perspectives, sustainable business is difficult but beneficial for organisations that care.

Conclusion:

These six purchase tactics might boost your company’s sustainability. Sustainable procurement may become a competitive advantage by prioritising supply chain visibility, establishing critical competences, aggressively engaging suppliers, using sustainability data, gaining C-Level buy-in, and integrating digital processes. Use these methods to make lasting changes and position your company for long-term success.