Responsible Procurement: Understanding procurements’ impact – Part 2

We welcome another post by Alis Sindbjerg Hemmingsen from Responsible Procurement Excellence.

In the earlier blog we spoke about need for procurement to turn green to stay in the business. Today I will highlight the impact of responsible procurement on your business.

Taking on responsibility for the impact of your own operations is no longer enough. The world demands more of you. You are now also held accountable for what goes on in your supply chain. From working conditions to corruption to environmental impacts. Your procurement of products and services is under scrutiny.

Your challenge is to understand the impact your procurement decisions have on local communities, workers and the environment. And then take action to make sure that you create a positive impact.

At the end of the day, that is what Responsible Procurement is all about. If you plan it well, it can promote sustainability, provide you with cost savings and protect and enhance your brand.

Ensuring that the procurement strategy is based on a responsible-decision making approach has become an important business parameter. Additionally it is essential for you as well to understand, that Responsible Procurement, in its best format, can be a value creation process.

Responsible Procurement can have a fundamental strategic and operational impact. It can promote competitiveness and innovation. Responsible Procurement is a strategic tool, which can help minimize your company’s negative impact on people, societies and the environment. While at the same time maintaining or enhancing value for customers, business partners and shareholders.

I typically define Responsible Procurement in the following way: ”Responsible Procurement integrates requirements, specifications and criterias that are compatible. And which are in favor of the protection of the environment, of social progress and in support of economic development. Namely by seeking resource efficiency, improving the quality of products and ultimately optimizing costs”.

However, some companies see their Responsible Procurement initiatives as pure risk management and use it for compliance purposes. The strategic and operational impact is then, typically, medium to high. Though it mitigates the operational risks.

Responsible Procurement is about increasing a company´s profit, improving the strategic supplier relationships, strengthening the brand while remaining vigilant towards competitors and revolutionizing the procurement strategy.

Stay tuned as in the next blog, last in the series, I discuss the opportunities and best practices within responsible procurement.

The author Alis Sindbjerg Hemmingsen is a Responsible Procurement thought leader and owner of the company Responsible Procurement Excellence. They are specialized in helping companies around the world develop and integrate an actionable approach to Responsible Procurement. An actionable approach goes

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