Compliance with ecological and social requirements has been part of the day-to-day business of procurement ever since the current climate debate. Procurement has a great influence on the supply chain. Sustainability is becoming a fixed evaluation criterion for suppliers, as the biggest environmental problems arise in the global supply chains. Climate gases, air pollution, water consumption, land use and social standards have long been more than buzzwords in procurement, although transparency right down to raw material is sometimes a Herculean task.
Implementing legal requirements
It is not only the implementation of climate targets (cutting CO2 emissions down to half by 2030, CO2 neutrality by 2050), the obligation to provide evidence for conflict raw materials, the obligation to provide non-financial reporting or the current EU recycling package that make the implementation of sustainability targets in the supply chain urgent. Procurement has created the conditions for this in recent years. After all, professional supplier management is the basis for close monitoring and development of suppliers in all preliminary stages.
What must procurement departments consider in order to act more sustainably?
What are the advantages?
Sustainable procurement means to obtain the best value for money in terms of economic, ecological and social factors. The prerequisite for this is a multidimensional, holistic view of the suppliers. In contrast to established procurement practices, which often take only the economic component into account.
Sustainability also has a positive economic impact. If you pay attention to the efficient use of materials, you save costs. Minor design or material changes are often enough to make it easier to recycle raw materials. Recycling reduces disposal costs. In doing so, reprocessing, secondary use and recycling must be considered right from the start. Product design, development and material selection all play a major role in sustainable management. Sustainable procurement is even more closely integrated into the entire value chain.
Society, investors and politics have rising expectations which companies have to meet. The costs of damage to the brand can quickly run into millions. Sustainable action in procurement is the prerequisite for preventing such crises from occurring in the first place. Sustainability needs transparent supply chains. They help procurement in risk management because dangers can be identified early on and potential can be exploited.
Sustainable procurement strategy
How can procurement be made more sustainable? The basic prerequisite is the adaptation of the corporate culture, based on which procurement strategies are developed that also comply with future legal requirements.
Discuss with us!
We will be available at the BME Sustainability Summit on 28/29 August 2019 in Frankfurt am Main for a more in-depth exchange on the topic of responsibility and sustainability in procurement.
We look forward to a lively discussion and your assessment of the topic. Let us develop procurement organizations that make a high value contribution and act just as responsibly in the interests of future generations!