Sustainability must be led by the CEO but procurement is the crucial ingredient

posted by Malcolm Harrison
9 December 2021

Sustainability should be high on everyone’s agenda as we face a climate crisis. The discussion is over. The debate on understanding sustainability is no more

A philanthropic business initiative is no longer a nice to have – it’s a business imperative. In a recent CIPS survey, we found that only 59% of supply chain managers believe their business will hit the UK’s 2050 net-zero target.

And despite much of the UK’s carbon footprint being generated in supply chains, 19% of supply chain managers were not involved at all in sustainability planning. A further 43% were only lightly involved and a fifth said they were unaware of any corporate sustainability strategy.

Climate change is a direct risk to the financial stability of any organisation. Employees and investors are looking for assurances from organisations and scrutinising their credentials. At the 2019 UN Climate Action Summit, a group of the world’s largest investors, with more than US$2tn in managed investments, initiated the Net-Zero Asset Owner Alliance, committed to reaching carbon-neutral portfolios by 2050.

And a study by WeSpire found that Gen Z is “the first generation to prioritise purpose over salary. They read mission statements and values documents to select where they work, and want their employer’s values to match their values.”

Much of an organisation’s environmental impact will be outside its internal boundaries. It is important that organisations understand this complexity so they can begin to track, communicate and address the sustainability of their own unique supply chains.

The choices you make as businesses ripple through your supply chains to impact everything from water security and carbon emissions to waste management and deforestation.

Sustainability strategy must be led by the CEO but it requires input from across the business and procurement is perhaps the most crucial ingredient. Sustainability is not about guessing or predicting what future risks might be but about shaping and creating a future that suits our needs, and collaboration is key to that. Seek innovative solutions and choose the most appropriate suppliers.

Yes, there should be some minimum requirements for all suppliers but there are some areas of supply that will require more creativity. And don’t let collaboration stop with suppliers. I would also urge you to collaborate within your wider sector, with customers and competitors, too.

Some of these issues are too big for us to tackle in isolation and require a joint effort. Mars, PepsiCo and McCormick have joined forces and put their competitive differences aside to send an important message to suppliers that action is required.

They have provided suppliers with knowledge, resources and tools to develop climate impact reduction plans focusing on greenhouse gases and how to calculate their own carbon footprint. They have a consistent message and approach for suppliers across the sector, where everyone is measuring in the same way to track progress.

The lens we look through to address sustainability must change. We are running short of vital resources. Wildfires, droughts and floods are regular occurrences and we can expect to live with pandemics for the foreseeable future. Now is the time for procurement teams to get a handle on delivering the sustainability agenda.

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