Procurement is no longer just about sourcing goods and services at the lowest cost, it has become a strategic function that significantly impacts an organization’s sustainability goal.
As global conversations around climate change, ethical sourcing and environmental responsibility intensify, we as procurement leaders are uniquely positioned to drive meaningful progress toward sustainability goals.
In this blogpost, we'll explore some tips for achieving sustainability goals in procurement.
1. Switch to Sustainable Suppliers: Let’s consider a company that sources raw materials for production. The procurement team identifies a supplier that uses renewable energy and offers recyclable packaging. Although the initial cost may be slightly higher, the organization recognizes that working with this supplier aligns with its sustainability goals.
Tip: Build sustainability criteria into your supplier evaluation process. Consider factors such as carbon footprint, energy efficiency and waste management practices when selecting suppliers.
2. Promote Circular Procurement: A technology company seeks to upgrade its IT equipment. Instead of purchasing brand-new devices, the procurement team collaborates with a supplier offering refurbished laptops. These devices meet performance standards while reducing electronic waste.
Tip: Implement a policy that prioritizes refurbished, remanufactured or recycled products wherever possible. Establish clear guidelines to ensure quality standards are not compromised.
3. Optimize Logistics for Carbon Reduction: A retail chain uses procurement strategies to optimize its supply chain logistics. By consolidating shipments and selecting carriers with low-emission fleets, the company reduces transportation-related emissions and achieves cost savings.
Tip: Collaborate with logistics providers to identify more sustainable transportation options, such as fuel-efficient vehicles or optimized delivery routes.
4. Encourage Supplier Development: A fashion brand discovers that one of its suppliers struggles to meet sustainability standards due to outdated equipment. Instead of terminating the contract, the procurement team works with the supplier to secure funding for greener technology, instigating a longer-term partnership.
Tip: Engage in capacity-building initiatives with suppliers. Offer training or support to help them adopt sustainable practices. This will strengthen relationships and improve compliance.
5. Leverage Technology for Transparency: Procurement teams can use digital tools to enhance visibility in their supply chain. For instance, blockchain technology enables tracking of goods from origin to delivery, ensuring suppliers meet ethical labor and environmental standards.
Tip: Invest in supply chain transparency tools. Platforms that track and report ESG metrics can help verify supplier compliance and identify areas for improvement.
By embracing sustainable procurement practices, you are not only contributing to your organization's success but also playing a pivotal role in shaping a more sustainable future.
Need procurement specific training? Reach out to support@efemini.com and we'll get you sorted.
PS: Join me on 16th January for a Live event on Positioning for Procurement Leadership. Whether you’re aspiring to lead or already in a leadership role, the key to success lies in positioning yourself strategically for the opportunities ahead. Click the link to register and don’t forget to save the date in your calendar!
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