Sustainable Procurement: Integrating Environmental and Social Responsibility into Supply Chains
Sustainability in supply chain and procurement can easily be recognized in nearly all stages of the process, from minimizing waste and overproduction to prioritizing ethical suppliers by efficient demand and supply management.
But more specifically, a more sustainable supply chain entails the process of acquiring, sourcing and finding services and goods while considering social and environmental factors.
Basics of Sustainable Procurement
Sustainable procurement involves integrating CSR (Corporate Social Responsibility) principles into your company’s procurement processes and decisions while ascertaining that they meet your stakeholders’ requirements.
Sustainable procurement integrates criteria, requirements, and specifications, which are complicated with the protection of society and the environment as a whole. Plus, it involves many issues beyond, like child labor or using dangerous chemicals, which may affect the environment or people.
According to experts at Gibson Consulting, committing yourself to a sustainable supply chain will ensure your company’s values are maintained throughout the lifecycle of services and products. Best practices can be future-proofing sustainable investments and procurement of your company by using policies, which increase long-term viability.
Strategies and policies for sustainable supply chains depend on the capability to deal with the demands of emerging markets and the importance of future-proofing themselves around scarcity in the supply chain.
Why Sustainable Procurement
It isn’t just the environment, which is losing out. Lack of sustainability also has an effect on the profitability of companies. According to Unilever, natural disasters directly linked to climate change have created losses annually of over $300 million.
In order to attain sustainable procurement, companies must address legal, economic, social, and environmental concerns across their supply chain. Taking holistic approaches will minimize environmental footprint and waste and, at the same time, improve health & safety and labor conditions.
A fully sustainable supply chain socially ensures responsible business practices. These practices are good for this planet and the people living here. Other benefits of more sustainable procurement are:
- Improved supply continuity
- Minimized environmental effects
- Win more businesses
- Potential for a new partnership
- Protection against damage to reputation
Sustainable Sourcing
Business organizations may play an important role in ensuring the robustness of CSR strategies concerning procurement. Sustainable sourcing involves integrating environmental, ethical, and social performance aspects into the selection process of suppliers.
Sustainability principles in the supply chain must be defined well in both qualitative and quantitative requirements for KPIs to be fully integrated into suppliers’ screening process.
Attaining Sustainable Procurement
Procurement companies agree that effort is needed to create a more sustainable supply chain. However, it is believed that most organizations, particularly those with a mature procurement ability, have a strong foundation in place.
Importantly, procurement functions have rich data on upstream value chains. They know how much companies buy, who makes it, and where exactly it comes from.
To Wrap-Up
Sustainability is supplier management, and purchasing is important in the corporate world. In a society that values sustainability increasingly, sustainable management for suppliers is a moral imperative and a strategic advantage for every company that wants success in the long term. By integrating social and environmental responsibility, your company will become a key leader in sustainable procurement.