A topic we’ve been hearing a lot about lately is making the procurement process environmentally and socially sustainable. This certainly does not come as a surprise, as today’s zeitgeist is defined partially by a growing interest in becoming more conscious of the world we operate in.
The great news for businesses? There are clearly defined sustainable procurement methods that carry a lot of benefits for your bottom line and the planet. In many cases, going green is a win-win situation for all parties!
So, for today’s blog, we will be covering what exactly sustainable procurement is and how you might benefit from implementing these processes.
What is sustainable procurement?
Sustainable procurement can be defined as the alignment of business needs for things like equipment, utilities, materials, services in a manner that is conscious of the environmental and social impacts.
Businesses and organizations that implement sustainable procurement aim to make strategic decisions that will benefit the business, its customers, and society at large. Implementation begins with a thorough assessment of the full-fledged lifecycle of the product. This includes things like acquisition, distribution, maintenance, services, and even disposal.
It should not come as a surprise that economic irresponsibility has the ability to not only negatively impact a business, but the world on the whole as well. Consumers are now more informed than ever before, and not only are consumption patterns changing at the individual scale, but on an organizational scale as well.
Consumer pressure can be a good thing, because it pushes businesses to think outside the box and be more mindful of their impact on the environment and on society. Thankfully, implementing processes like sustainable procurement benefits all parties: businesses, consumers, and the environment.
Yet, there are still many businesses who refrain form adopting sustainability as an integrated part of procurement processes, partially due to the three main myths in the sustainable procurement world:
Myth #1: Sustainable Procurement Requires Expertise
Many organizations believe that sustainable procurement requires significant sustainability expertise to implement, and resist implementation as existing procurement teams lack this expertise. The truth is, procurement is the expert at bringing in the right subject matter experts and finding the right resources for any situation – and this applies to sustainability as well.
Myth #2: Sustainable Procurement is Lengthy
Often there is resistance that is created due to a perceived extension of timelines or complexity if sustainability is brought in. In reality, sustainable procurement integrates sustainability to the existing procurement practice, and takes no more time than the standard procurement process.
Myth #3: Sustainable Procurement is Costly
Businesses often believe that sustainability and business value are two sides of a scale, and that increasing sustainability will increase cost. On the contrary, sustainability often provides procurement with the mandate to develop innovative solutions for simultaneously creating both business value and sustainability value.
Keep on reading to discover some of the key benefits of procurement going green!
Sustainability delivers ample value in the procurement process. It can be optimized in order to inform how businesses partner up and work together with customers and suppliers in the whole value chain.
- Revenue stability & growth: Business need to obsess about their bottom line in order to grow. Those that implemented these practices saw up to 5-20% increase in revenue.
- Lower supply chain costs: Keeping a close eye at every step in the supply chain dramatically lowers the costs. Businesses saw up to 9-16% decreases in costs.
- Increase in brand awareness: Building a brand that people respect is hard work, but consumers love businesses that are mindful of their environmental impact. Businesses found that their brand awareness improved by up to 30%.
- Reduced environmental footprint: Kicking off sustainable procurement processes in your business can be intimidating, but those that made the switch decreased their environmental footprint by up to 22%.
What does implementation of sustainable procurement actually look like for businesses?
The implementation of the sustainable procurement process relies on four main pillars of consideration. The end goal is for businesses to leverage their existing supply chain resources to make a real impact on their practices.
The current business landscape is shifting towards greener practices, with clear objectives and a transparent view of your supply chain processes. There are certainly many resources out there for businesses that wish to do this, as it’s becoming increasingly popular to favor sustainable procurement over traditional methods.
There are strong benefits in making the change — for the business, for the employees and partners, and the Earth.
Learn more about ETCH Sourcing or contact them here.