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23 April 2013 | Adam Leach
Procurement professionals should be wary of the potential for unintended consequences to occur as a result of setting sustainability targets for suppliers.
Speaking at the Sustainable Purchasing & Supply Summit in London last week, Steve Kenzie, programme director at the International Business Leaders Forum (IBLF) and head of the UK Network of the UN Global Compact, warned buyers might not get what they intend to when they set sustainability goals for vendors. He suggested suppliers might ignore the purpose of the targets to achieve the aim in the most profitable way.
He told the audience: “When you start putting conditions into your procurement documents, you need to recognise that in a typical supplier and purchaser relationship, there’s going to be some tension. When you start putting in conditions, the supplier is just going to be immediately looking at how they can most profitably achieve the letter of the conditions, not necessarily the intent.”
Giving a hypothetical example of an unintended consequence, he proposed, a supplier might reduce the number of light bulbs and shut off the heating in a factory to reduce carbon emissions in line with buyer’s expectations. For the buyer, while the primary intention would be to reduce emissions, the net effect could be becoming complicit in human rights violations.
On a more optimistic note, he highlighted the potential for sustainable changes from companies working together across their sector, rather than alone. In particular, he highlighted corruption and water stewardship as areas where companies should club together to drive up standards.