Procurement’s role in driving sustainability

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Sustainability is now one of the most important topics of discussion in boardrooms all around the world today. There is a growing realization that companies have a far bigger role to play than simply pursuing growth and profitability at all costs.

So, what role does procurement have to play in all of this? At ArcBlue, we believe that procurement has a critical role to play in both shaping the sustainability agenda within organisations and in taking tangible actions that drive progress towards becoming a more sustainable business.

As procurement professionals and leaders, we can genuinely influence the impact our supply chains have on the world around us through how we choose to spend our company’s money. Procurement is responsible for spending up to around 70% of the company’s revenue, and every dollar we spend is an opportunity to leverage our purchasing power to shape the way our suppliers think and act.

So, for procurement teams wondering how to start to improve and embed sustainable procurement practices within their organizations, as cliche as it might sound, the most important step is to just get started. Our advice is to remember that to excel at sustainable procurement, you don’t need to be doing everything. There are three areas that we recommend you look at.

First, make practical decisions on where to focus your efforts based on what the highest priority sustainability issues are for your business. This can be done through a completion of a materiality assessment. This will help you work out where you should focus your efforts going forward.

Second, utilize your spend data to carry out an indicative assessment of your Scope 3 carbon emissions footprint. By using a combination of spend data and emissions factors for different spend categories, you can understand which categories have the biggest environmental impact. From there, you can then develop targeted strategies to address those categories as a priority.

Finally, but perhaps the most important area, is to look at your End-to-End procurement processes and identify how you can embed sustainability as a key consideration throughout the processes, be that in supplier selection, negotiations, contract language, performance management or supplier collaboration.

If you need assistance to begin your sustainable procurement journey, ArcBlue can help. Our sustainable Procurement Maturity Diagnostic will help you to understand your organization’s current level of maturity and create a roadmap for change that prioritizes initiatives based on their impact and ease of implementation.

If you would like to hear more about our sustainable procurement services, please get in touch. More information can be found at arcblue.com.