60% of firms have lowered sustainability investment

Six-in-ten UK businesses have lowered investment in sustainability initiatives following the Covid-19 outbreak, according to research.

But the research, conducted by Ivalua, also found 95% of firms had plans in place to address environmental concerns in their supply chains in the next 12 months. 

Ivalua surveyed 200 procurement, supply chain and finance professionals to determine the impact of the pandemic on sustainability initiatives.

Quality (38%) and cost (31%) were considered to be the most important factors when working with suppliers, while sustainability lagged behind at 15%. However, 87% believed making supply chains greener could be a key competitive advantage.

Supply chain visibility (93%) was widely reported as one of the main challenges when implementing sustainability initiatives. Almost a third (30%) of respondents said there was a lack of visibility into supplier risk, while 28% said they lacked visibility into tier two and three suppliers. A fifth (20%) struggled to gain visibility into their tier one suppliers. 

Other barriers identified included poor data quality (39%), prioritisation of cost (38%) and difficulty collaborating with suppliers (38%).

As a result, most firms felt unprepared to address environmental concerns, as 81% claimed they did not have comprehensive and fully developed plans to overcome air pollution. Almost three-quarters (74%) claimed the same for carbon emissions. 

“Covid-19 has forced many companies to change their priorities to focus on ‘business as usual’ and ensuring their survival, creating further barriers when it comes to implementing sustainability initiatives,” said Alex Saric, chief marketing officer at Ivalua.

“However, in the coming months and years, businesses must return their focus to improving sustainability and contributing to global efforts to reduce our impact on the environment. 

“Whilst it is a barrier today, Covid-19 is also pushing leaders to rethink their approach to supply chains. In this respect, Covid-19 could be a tipping point for a sustainability revolution, and businesses that don’t take action to tackle environmental concerns could risk losing market share to greener competitors.”

Meanwhile, the UK Green Building Council (UKGBC) announced it has set up a task group to develop guidance on the procurement of renewable energy and carbon offsets. 

The task group includes trade associations, industry bodies, and construction and energy firms. It aims to develop guidance for procuring renewable energy and provide a set of principles for offsetting outstanding carbon balances, along with  setting a transition plan for phasing out the future use of offsets. 

UKGBC will undertake a consultation on the draft guidance in autumn 2020.

Emily Huynh, technical advisor at UKGBC, said: “The importance and urgency for the built environment to decarbonise cannot be understated. It is critical that action is taken now to promote a more rapid step-change in our transition to net-zero, and many businesses are now grappling with the practical steps they will need to take.

“This new task group will work together to develop guidance that provides clarity on how best to address residual emissions during this transition, through the procurement of renewable energy and the use of carbon offsets where applicable. The group’s work will help demystify how practitioners can go about procuring quality renewable energy and offsets as the industry pursues a consistent and ambitious trajectory to net-zero carbon.”

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