24 October 2008
How can purchasers prove the importance of sustainable procurement during an economic downturn? Jake Kanter listens to what the experts say
No less a figure than the CBI director-general Richard Lambert is in favour of sustainable buying. "Forward-thinking firms are putting sustainable procurement at the core of their business strategy. And those companies that don't follow suit risk losing out commercially."
Lambert was quoted in a CIPS report Managing The Storm and Beyond - The Business Case for Sustainable Procurement, which formed the basis for a roundtable discussion in London last week.
The paper's author, sustainability adviser Blake Lee-Harwood, argues sustainable issues are often overlooked when the economy takes a turn for the worse as firms tend to focus on survival and not on environmental and social issues. But, he adds, this must change: "A survival strategy is going to have to be a sustainable strategy."
So, in a difficult economic climate, how can purchasers show the value of sustainable procurement? "It's about bringing practical solutions to the table and saying 'Here's the problem, here's how to solve it'," says Lee-Harwood.
Taking the lead on measuring and managing carbon emissions in the supply chain is an environmentally friendly and cost-effective first step, he says. More complex issues include changing core behaviours and building strong relationships with vendors. "If you have collaborative relationships, suppliers will take you seriously."
Mark Varney, head of commercial food at the Fairtrade Foundation, explains capitalising on supplier innovation is also essential. He says organisations need to move away from being defensive in dealing with sustainable issues in the supply chain and become more pro-active. Buyers can help by encouraging openness and investing in vendors as if they are employees. "By having a better information flow with your supply chain, you're going to have more innovation and better quality."
The panel explained sustainable procurement is essential to brand reputation. Gregg Paget, managing director of consultancy Sustainable Procurement, believes a respected and trusted brand is essential: "Consumers are sharply tuned into these issues and it does influence their decision making."
He adds: "Sustainable procurement is about good procurement. It takes into account the key issues of cost and quality. Social and environmental considerations are a mark of quality."
David Logan, co-chair of sustainability consultancy Corporate Citizenship, went a step further. He argues buyers should become more involved with their companies' product launches so they can prepare the supply chain accordingly.
Logan suggests buyers have a better understanding of whether a product can be delivered on time, without compromising quality or sustainability issues. He says marketers have had their day and purchasing must be given more responsibility.
Lee-Harwood concludes purchasing is often the most important function when it comes to delivering the sustainable agenda. He called on firms to take advantage of a "huge untapped resource" of expertise in the profession.