Prioritising Sustainability in Procurement
CPOs are at the forefront of addressing the environmental impact of their organisations. By working to find the most sustainable suppliers, they can meet their own CSR and ESG objectives and ensure their firms are meeting their customers’ sustainability demands.
To uncover the latest challenges facing CPOs, check out our latest ProcureCon Playbook.
Beyond doing the Right thing, Sustainability Pays
Our recent ProcureCon Europe survey revealed 86% of respondents said their organisations' commitment to sustainability has either increased or stayed the same since 2021. CPOs can reinvest these cost savings to help support their organisations growth and branding. Furthermore, ensuring that they meet ESG supply chain goals, their organisations can avoid penalties and reputational damage.
Realising the benefits of CSR and ESG
CSR is no longer an afterthought in procurement. It is a key consideration that is driving innovation and change, and CPOs are taking note.
When Unilever announced its procurement strategy would shift to become committed to ‘sustainable and regenerative sourcing’, they have saved over €1 billion since 2010. CSR and ESG not only offers CPOs an opportunity to clean up their supply chains, it also can save money for their organisations and boost customer relationships.
By signing up to the UN-backed Race to Zero Campaign, Rolls Royce has they pledged to tackle their supply chain emissions by working with strategic partners to adopt ‘circular’ business practices. This initiative has resulted in Rolls Royce cutting the number of raw materials being used in their supply chain and reducing their carbon footprint whilst ensuring a positive impact.
This is not fixed in sectors that produce physical goods alone. Citibank has demonstrated its commitment to sustainable and responsible procurement by instituting a resource management Supplier Diversity and Sustainability Program.
By fostering close working relationships with minority and women-led business development organisations, Citibank can further their CSR goals which can help encourage other firms in their sector to do so by providing a tried-and-tested blueprint for how it can be done.
Prioritising Supply Chains to Reduce Environmental Impact
CPOs need to ensure they are always looking deeper into their end-to-end supply chains to meet their current ESG targets. Here they can act to renew contracts with suppliers can prove they are using sustainably sourced materials and are keeping to strict CSR goals, such as avoiding child/forced labour.
However, smaller organisations that might not have implemented a sustainable procurement strategy yet, their CPOs can still play a big role by taking the initial steps to implement change. From setting out new procurement sustainability goals, to being more selective when choosing suppliers when renewing contract, there are several ways to factor in ESG in procurement.
CPOs should remain focussed on working directly with suppliers but there is a risk. They could find that prices for sustainable materials are inflated, hampering their efforts from the outset. To tackle this CPOs should be proactive, supporting supplier transparency and revamp sourcing strategies.
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