How to drive sustainability through procurement

Procurement departments have long had to manage sustainability risks in their supply chains. More recently, consumers have begun demanding sustainable products in greater numbers, making a sustainable supply chain into ever more of a competitive advantage.

“In 2019, 15 extreme weather events driven by climate change cost more than $1 billion, with four events costing more than $10 billion each.”

The imperative for businesses to create positive social and environmental impacts is clear. Our report, The BITC report, Responsible Sourcing – How to embed Sustainability into Procurement processes, co-authored with Deloitte, explores the key sustainability focus areas for procurement teams: Human and Labour Rights, Climate Resilience and Inclusive Procurement. To accelerate sustainable procurement in these areas, we highlight five key steps for procurement teams to consider:

1. Set your ambition

In order to start creating a more sustainable supply chain, procurement teams should define what risks and opportunities, both for cost savings and innovation, exist for their business through them embracing more sustainable procurement practices. To successfully make these a reality, early engagement with leaders and wider stakeholders in the business is crucial.

2. Assess your sustainability performance and risk

Many procurement teams will need to delve into an unprecedented level of detail to fully understand and evaluate the risks and opportunities inherent in their supply chains. Third party risk management (TPRM) technologies can help them to achieve a level of visibility and understanding of risks which was, until recently, simply not feasible for procurement teams to gain. With this new, more detailed knowledge, effective prioritisation of sustainable procurement activities becomes ever more important.

3. Develop and implement your strategy

A sustainable procurement strategy, supported by clearly scoped targets, will allow alignment around a topic which many procurement professionals will no doubt be passionate about. They should be supported in implementing the strategy by embedding this in their objectives and targets and through training. At the same time, to ensure that sustainability becomes the new standard across all procurement activities, sustainable practices need to be embedded in all relevant procurement practices.

4. Collaborate and co-create with others

Without the engagement and active support of key suppliers, a sustainable procurement strategy is bound to deliver underwhelming results. Gaining their trust and cooperation is fundamental to achieving sustainability targets. How to do this will depend on each individual relationship; however, the three main steps of moving beyond compliance, building long-term relationships and fostering mutual respect will enhance any business relationship and enable partners to co-create sustainable and mutually beneficial solutions.

5. Evaluate and communicate your progress with others.

As with all new initiatives, sustaining the results achieved and maintaining momentum to deliver continuous improvements can be a challenge. A particular focus on ongoing evaluation of achievements and communication of progress will help to maintain focus and excitement around the area of sustainable procurement.

Discover more insights around how you can build more sustainable procurement practices by reaching out to Ash Blythen and reading the full report here.