Sustainable Procurement

We’ve seen how important managing supply chains has become in a rapidly global economy, but how we source our goods, works and services has become increasingly a point of interest.

Following on from COP26, sustainable procurement is set to be a big talking point over the coming years and being prepared for this switch is going to be increasingly important. In this guide we are going to dive deeper into the topic of sustainable procurement, why it is important, its benefits and some of the best practices associated with sustainable procurement.

eXceeding is a procurement consultancy which has delivered solutions and results over the last decade to global organisations who have seen increased demands in an ever-changing environment. Working with both the public and private sector, eXceeding has years of experience in delivering sustainable procurement solutions to the marketplace.

What is Sustainable Procurement?

Sustainable procurement is the method of adopting social, economic and environmental factors into organisations who handle procurement processes and procedures – alongside the typical price and quality considerations.

From complying with local and international environmental laws and targets, to the vetting of suppliers for fair labour prices, sustainable procurement is about ensuring that the business of procurement is firmly invested in decision making that helps communities, individuals and the environment throughout the whole process.

Importance of Sustainable Procurement

Sustainable procurement has come into focus in recent times. Many are keen to address sustainability within their organisation, but are also unsure where to start and who to involve.

Effective sustainable procurement matters because it means that an organisation should live up to its mission statement and build trust as well as a reputation to target its consumers and partners.

Sustainable procurement provides many benefits including;

• A better and more efficient use of natural resources
• A reduction in harmful impacts on the environment through less waste and less pollution
• It helps to encourage innovation and research into better working practices
• It provides sustainability in the supply chain whilst considering environmental and social factors.

Benefits of Sustainable Procurement for Business

Sustainable procurement also brings a whole host of benefits for businesses that operate under this ethos, including.

• Helping with revenue generation and growth
• Enhancing consumer perception
• Creating cost controls by adopting wider approach to whole life costing
• Opening new markets for products and services
• Facilitating competitive advantages
• Reducing risk in an organisation’s business practices
• Reducing waste – environmental and resource
• Improving resource efficiency
• Developing compliance with local & global environmental initiatives and legislation.

Sustainable Procurement Strategy

A sustainable procurement strategy aims to oversee the procurement of goods and services whilst making a significant contribution environmentally, socially or economically.

A sustainable procurement strategy is a widely held internal document that creates an understanding that all members of staff involved in procurement activities must be aware of. It is to ensure that any procurement activity routinely considers how any work will protect the shared environment, contribute to the health and well-being of society and build a sustainable economy through procurement decisions.

Businesses and organisations alike must consider if they should create their own Sustainable procurement strategy and create KPIs (Key Performance Indictors) to help achieve the aims of this strategy.

For example, the University of Oxford outlines six priority issues for their sustainability procurement strategy which includes;

• Optimise the use of natural resources
• Effectively manage waste in the supply chain
• Effectively manage the delivery of goods and services
• Support the management of our carbon impact
• Work with suppliers and departments to raise awareness of sustainability
• Ensure that ethical considerations and a living wage are considered.

Whilst the DWP have established many guideline practices to their sustainable procurement strategy including;

• Each department will spend 25% of their budget with SMEs
• Reduce greenhouse gas emissions by 25% from a 2009 to 2010 baseline from the whole estate and business-related travel
• Reduce the amount of waste we generate by 25% from a 2009 to 2010 baseline
• Ensure government buys more sustainable and efficient products and engages with suppliers to understand and reduce the impacts of supply chains.

Sustainable Procurement Best Practices

How can businesses create their own sustainable procurement best practices? Here are some of the most recognised practices in the workplace to date;

1. Evaluate your existing setup
   Understand who you are working with (suppliers and partners) and evaluate your current setup. It could be that some are already sustainable partners or have green initiatives in place, it could be that others don’t. Don’t change all partners straight away. Clearly communicate your plans for improved sustainability, even just to see if anyone else is on board and make a decision on who to keep or switch based on these criteria.
2. Define a code of conduct and collaboration requirements
   Get to grips with a code of conduct and collaboration requirement that all existing suppliers must adhere to. Make it easy to understand what you’re looking for, what behaviours you expect to see, waste handling, emission targets, and so on. Understand what limits these businesses can perform to and even think about incorporating ISO accreditation and standards to deal with procurement practices.
3. Educate and build awareness
   Who in your organisation knows about corporate social responsibility and sustainability? Find these people and help them to educate others around the business about eco-friendly initiatives for suppliers for both existing and potential customers. If you don’t have the team size to do this, enrol into online training and dedicated courses to get a better understanding of these issues.
4. Reward and respond
   Audit your suppliers regularly and reward or respond to their progress and achievements. Offer incentives to encourage greater levels of participation.
5. Optimise communication
   You should streamline your communication channels to all parties – not just internally. This will help with problem solving, issue raising and give your team the ability to work with third parties in establishing better practices to actually succeed.
6. Align core business strategies
   Finally, make sure that your employees are up to date with all the sustainable and eco-friendly requirements. It needs to be a priority for them because then it will become a priority for your suppliers and partners who will work with you to follow that example. Make it a core message and lead by example setting out what core business practices truly matter making it matter to them as well – especially if they want to keep trading with you.

In Summary

Sustainable procurement is the method of adopting social, economic and environmental factors into organisations who handle procurement processes and procedures – alongside the typical price and quality considerations.

Helping the environment, protecting local communities and reducing waste are just some of the topline reasons to develop a sustainable procurement strategy in your organisation.

At eXceeding we can help organisations get to grips with their procurement processes and create a sustainable procurement strategy that suits them. This results in not only cost savings, but also a streamlined process that saves time and reduces human error. With over a decade of experience helping brands such as adi Group, ECMWF and SIPS Education  improve their procurement strategies, why not drop us a line to see how we can help you achieve your goals.

Read more sustainable sourcing advice from us here.

Check out our procurement ebook for more information about procurement and how we can help deliver value to your business.