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Sustainable Procurement: Recyclable Goods to Responsible Supplier Base

By Linda Ashok
In Procurement Technology
Jul 9th, 2018
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“Sustainable procurement allows organizations to meet their needs for goods, services, construction works and utilities in a way that achieves value for money on a whole-life basis in terms of generating benefits not only to the organization, but also to society and the economy, while remaining within the carrying capacity of the environment.” Source

Although the above termsustainable procurementhas gained a lot of momentum but it will be interesting to note how many executives are still unsure of investing their human and financial resources for its proper adoption.
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Talking about millennials today, Nuveen’s Third Annual Responsible Investing Survey report published by the Business Insider informs that, “Over 90% of millennials said they would prefer to work for a company that has a positive social and environmental impact on the world, compared to 70% of non-millennials.” This is an interesting fact that may guide procurement influencers to look into their strategy and welcome sustainable procurement practices to attract the interest of that 90% that is going to lead the future.  This is the very reason companies like Neste, Ferrero, and H&M are successfully ahead of time and have information about their sustainable procurement policies up on their websites. These companies and others realize the impact of that sustainable procurement practices on sales.

If you are a sustainable procurement enthusiast, you know how the concept of sustainable procurement has evolved over the years. Earlier, the idea was just to buy recyclable products. But now, sustainable procurement is also having responsible suppliers adhering to prevalent labour laws and government safety and health regulations which are a part of any responsible organization’s ethics policies and risk-mitigation programs.

The 2017 EcoVadis/HEC Sustainable Procurement Barometer survey of U.S. and Western European companies tells us that the lack of internal resources poses to be one of the biggest obstacles in managing sustainable procurement programs. Earlier, the report tells us, management didn’t put in enough to induct the practice. But now, we can see although CEOs have welcome it but haven’t armed their procurement leaders with human resources or tools needed for the maintenance of the same. And the reason is the cost of implementing such programs. Well, the cost of sustainable procurement isn’t illegitimate. We can’t defy it. But that’s the whole game wherein companies that have realized the value of investing in sustainable procurement, have benefited from increase revenue by targeting sales to the conscious millennials.

So the point of content is if CEOs already realize the benefits of sustainable procurement which is why they have half-welcomed it then should Procurement take a backseat and relax? Well, certainly not. In fact-

  1. Procurement should take this up as a challenge and acquire more and more information on the effect sustainable procurement on costs and revenues, so that they can go back to their CEOs with their datasheet.
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  2. Strategically, peer bench-marking is another clever way to solicit the interest of the CEOs. Cite companies with longstanding commitment in sustainable procurement and how their procurement leaders are able to extract exacting values for their businesses from their suppliers.
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  3. Procurement can also establish the value of sustainable procurement both internally and externally by way of educating its resources, improving its supplier selection procedure and quarterly performance reviews of the vendors.
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  4. There is no one way of going about implementing a program. For instance if existing procurement leadership is failing to show results because of time constraints or lack of adequate information, then they can put in a requisition (read: a perfect procurement professional’s sales-pitch) for additional resource that can help with cost reduction, increase in revenue or overall service improvement.

This way, both CEOs and procurement leaders meet half way in ensuring they have resources to manage and thoroughly implement  sustainable procurement practices for social and financial interests.


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About "" Has 32 Posts

Linda Ashok is a content, communications, & branding professional with 12 years of work experience in BPO, Banking, Payroll, Robo-Advisory, Internal Communications and Social Media. She is interested in how businesses perform at the intersection of Big Data, AI, IoT, and other emerging technologies.

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