What is Sustainable Procurement?
Sustainable procurement is the act of adopting social, economic and environmental factors alongside the typical price and quality considerations into the organisations handling of procurement processes and procedures.
Typical sustainable procurement practises include compliance with environmental laws and targets, the removal of hazardous materials and waste in the supply chain and the thorough vetting of suppliers for fair labour practises.
Sustainable procurement and sourcing should genuinely improve the organisations business and future-proof it’s long term objectives.
Why does Sustainable Procurement Matter?
Effective Sustainable Procurement matters because it means an organisations lives up to its mission statement and builds reputation and trust amongst its target consumers and partners. The benefits of Sustainable Procurement can be summarised into four key areas.
- Risk & Reputation - A supplier association with an organisation that has bad practises like child labour or pollution can have a financial blowback on the organisation and its brand value.
- Cost Reduction - Sustainable procurement partners should prevent cost increased through the transfer of ownership and the consumption of energy costs. Cost savings allows re-investment into an organisation.
- Revenue Growth - Consumers that buy into sustainability can improve organisations financials and increase brand equity and loyalty. An organisation can also save money from using sustainable procurement partners.
- Future Proofing – Developing sustainable procurement practises allows the organisation to future proof themselves against scarcity in supply and changes in social, economic and environmental factors.
CIPS Knowledge related topics, best practice guides and white papers include: sustainable and ethical procurement and corporate social responsibility (CSR).
CIPS Sustainable and Ethical Procurement Guide
Whilst the concept of ethical and responsible procurement is not new, the increase in global sourcing opportunities has highlighted some serious issues in procurement practices that must be addressed.
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