Procurement must think big for the sake of future generations

9 December 2021

To be sustainable, procurement must adopt and integrate economic, social and environmental principles – and now is the time to do it, says Mark-Philipp Oberhoff

The CIPS Germany Branch launched this year with a mission to inspire and enrich the international procurement community by sharing best practice. We want to address the issues that affect not only procurement and supply chains but society. For example, everyone is talking sustainability in procurement but what does it really mean?

Sustainability focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs. It focuses on three key strategic areas: environmental, an onslaught of extreme weather events and the effects of global warming; social, investors have flooded into ‘socially responsible’ assets as ethical considerations permeate capital markets; and governance, diversity and inclusion are prioritised across corporate leadership.

Sustainable procurement is the adoption and integration of economic, social and environmental principles into procurement processes and decisions. For example, choosing to work with suppliers that tackle social inequality, such as minority-owned and small businesses; optimising costs and securing long-term profitability by reducing exposure to climate risks, and choosing goods and services that minimise greenhouse gas emissions.

I have put together this brief guide which will help organisations which are at the start their sustainable journey:

Develop a vision for sustainable procurement – it needs to be customised and adapted to the environment. It starts with a willingness to change.

Define a road map – every organisation has its own maturity level, strategic intentions and imperatives. The road map needs to be seamlessly integrated, and  balancing ease of implementation with business outcome will gain quick wins.

Take risks and think big – starting too small means not getting the right visibility within the organisation. Drive tangible projects and results.

Executive sponsorship – every leader should be committed to supporting and pushing new initiatives. A clear vision underpinned with a road map should be convincing enough to get executive buy-in to help push it through every organisational unit.

Inspire and communicate – it is beneficial to be part of communities, groups and social networks to communicate, to be inspired but also to inspire others. Resilient networks help to deal with challenges, identify new opportunities and to mentor others.

Once a framework is set up, it is all about execution and delivery. Begin with a sustainability assessment by combining qualitative and quantitative data to benchmark across social, economic and environmental performance. Focus on project execution, screening for potential opportunities and understanding which sections of the supply chain have the greatest sustainability impact.

Continue to track and analyse sustainability performance based on upfront defined key metrics, for instance, child labour, greenhouse gas emissions and, last but not least, savings. Let’s make a change together for future generations, and be conscious of the impact procurement can make. Let’s start today.

Mark-Philipp Oberhoff is senior director at GEP

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