It’s no secret that the world is increasingly focused on sustainability. Consumers want to know where the products they purchase come from and what they are made of, and companies want to be seen as leaders in environmental stewardship. Sustainable procurement is one way for businesses to put a stake in the ground when it comes to sustainable practices.
In this article, we’ll explore what sustainable procurement entails, why it matters, and how it can help you grow your business without hurting our planet.
What is Sustainable Procurement?
Sustainable procurement refers to how businesses can identify and reduce the environmental impacts of their supply chains. This includes:
- Identifying suppliers who are low-impact, fair trade or environmentally friendly
- Using production materials that have been sourced responsibly (e.g., using recycled paper)
- Reducing waste by reusing packing material as opposed to throwing it away after one use
- Maintaining a healthy work environment where employees feel respected and valued (e.g., paying living wages when possible).
What are the Benefits of Sustainable Procurement?
The benefits of sustainable procurement are easily broken down as follows:
Reduce Risk and Bolster Reputation – Suppliers with bad practices such as the use of child labour or knowingly causing excessive pollution can create a financial blowback on the organisation and hurt its brand value.
Decreased Costs: Sustainable suppliers can reduce an organisation’s costs by reducing waste and energy costs; lower energy use = lower energy bills.
Revenue Growth: Consumers that buy into sustainability actively seek out ethical and sustainable products and organisations. These customers are often willing to pay a little bit more to know the product or service is sustainable and ethically sourced.
Future-Proofing: Developing a sustainable procurement plan is one way to future-proof the organisation against a potential shortage in supply. This plan will also help protect against changes in social factors such as the availability of technology, economic factors like fluctuations of currency rates, and environmental effects such as climate change.
Why does Sustainable Procurement Matter?
Sustainable procurement is vital to businesses of all sizes and in every sector. It helps a company improve its financials and future-proof the organisation against a range of challenges that may disrupt supply chains, as we mentioned above. This means greater flexibility for any business trying to decrease its carbon footprint, helping combat climate change.
Consumers are becoming more interested in the origin of the items they buy and the impact they have on the planet. While the current trend in procurement is to look for sustainable and renewable resources like bamboo or hemp, innovation will be imperative to help businesses meet sustainability goals.
Encouragingly there has been progress made over recent years, and many organisations have started looking at options such as re-purposing products, the reduction of single-use plastics and decreased transport. It’s essential that all organisations consider how they can work with partners towards environmental protection through procurement, not just industries traditionally associated with natural resources: agriculture, mining, etc.
Sustainable procurement is an essential factor in corporate social responsibility (CSR). There is no denying that food scarcity, global warming and the effects the population has on the earth can be attributed mainly to industry. Sustainable procurement allows these industries and organisations to lead in reversing this damage. It shows that the organisation is aware of future impacts and considers them when making purchasing decisions.
Change doesn’t happen instantly, but with time, commitment and patience, organisations can make a difference!
Find out more about sustainable procurement with a CIPS Diploma and Advanced Diploma in Procurement and Supply. Get your two-week free trial by contacting us or completing the form on our website.