CEOs 'out of step' on green procurement

20 December 2021

CEOs must take ownership of developing sustainable purchasing, according to research.

The global study, by BearingPoint, said CEOs, as “chief environmental officers”, were key to setting the vision and strategy to support organisational changes needed to make procurement sustainable.

Researchers interviewed 700 company leaders and procurement and sustainability experts and found more than 40% said that they sought inspiration and direction from top management. In Asia and the US this figure was more than 50%.

However, the study found a sizeable gap in perception between management and operations on how advanced their company’s approach to implementing sustainability was. Leadership positions were almost twice as likely to rate it as highly advanced compared to operational roles.

More than half cited competitive advantage as a key reason for adopting sustainable procurement practices.

Companies with a baseline measurement of their carbon emissions were better prepared and structured for successful initiatives to source more sustainably and decarbonise supply chains, the study said.

Those without baselines were three times more likely to experience barriers and frustration in achieving sustainability targets.

BearingPoint said C-level executives shared ambitious visions and targets for more sustainable business and their teams expected clear guidance on how to reach them.

However, when it came to translating ambitions into reality there were still challenges, with insufficient training and a lack of reporting on supply chain sustainability/transparency cited as the biggest barriers to sustainability goals.

More than three quarters (76%) agreed higher IT budgets were needed to track scope three emissions.

CEOs should focus on overcoming barriers such as insufficient training, difficulties in translating impacts into financial benefits, and the lack of reporting on supply chain sustainability.

Ralf Dillmann, partner sourcing and procurement at BearingPoint, said: “Sustainable purchasing transformation is the next CEO challenge, with leaders inspiring their teams to act sustainably. “Leaders need to take ownership to support organisational change and allocate budget to make their strategy happen.”

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