Procurement is among the most transactional and important parts of doing business. Although those days of checking orders on papyrus scrolls and scribe writing, the basic activities involving the purchase and selection of services and goods required for daily functioning remain unchanged.
In light of endless needs and increasing environmental degradation, experts at Gibson Consulting say that sustainable procurement is becoming the need of the hour.
What Is Sustainable Procurement?
It refers to a process that incorporates social, governance, and environmental factors of corporate responsibilities into decision-making and procurement processes while ensuring they meet the requirements of stakeholders. It often aims for positive social results and low environmental impact.
Within supply chain and procurement, you can regard sustainability as the decision-making process that benefits organizations and society while reducing environmental impacts. This simply means considering environmental and social factors alongside economic and financial ones.
Pillars of Sustainable Procurement
Sustainable procurement falls into three major categories. Here are the three categories of sustainable procurement and what each entails:
- Economic sustainability: It is the impact of procurement decisions on an organization’s economic well-being, its community, and suppliers. For example, goals in mind can bolster the financial value of a company and promote the development of the local economy.
- Environmental sustainability: This focuses on reducing the impacts of making procurement decisions on natural environments. The measures taken aim to conserve natural resources, promote sustainable practices, minimize waste/pollution, and reduce the emission of carbon.
- Social sustainability: This refers to the social and ethical impacts of buying decisions on a community. It may include customers, suppliers, and employees, among other stakeholders.
Why It Matters
Sustainable procurement comes in handy in industries and businesses, regardless of their sizes. It helps companies improve their finances and future-proof organizations against various challenges that disrupt supply chains. This means more flexibility for businesses trying to minimize carbon footprint, thus combating climate change.
Consumers are also gaining more interest in the origin of the items they plan to buy and how they affect the planet. Although the current procurement trend is to find renewable and sustainable resources, such as hemp or bamboo, innovation is vital in helping businesses meet their sustainability goals. Other benefits of sustainable procurement are:
- Future preparation
- Enhance brand
- Reduce risks
- Decrease costs
- Increase compliance
- Grow revenue
Sustainable Sourcing and Procurement Principles
Sustainable sourcing and procurement involves integrating economic, social, and environmental considerations into an organization’s buying decisions. It aims to contribute to local communities’ well-being, support labor practices, protect human rights, and minimize negative impacts. The underlying principles of sustainable sourcing and procurement include economic viability, social equity, and environmental responsibility.
Responsible and ethical procurement forms an important component in the buying functions and sourcing of leading organizations, both private and public. The earlier an organization gets on board, the better the opportunity it gets to reap benefits. To achieve that, they will need to develop sustainable procurement policies, have senior management endorse their policies, and identify priorities of sustainable procurement.
Sustainable procurement provides the best way to integrate sustainability into daily operations. Although it is challenging, it provides a lot of opportunities. By implementing it, your company makes positive contributions to society/environment and strengthens its resilience.