According to the United Nations Development Programme, “Sustainable procurement is ensuring that the products and services we purchase are as environmentally friendly as possible, with the greatest positive social outcomes,” such as resource efficiency, climate change, social responsibility and economic resilience.
In a nutshell, sustainable procurement involves responsibly sourcing production materials such as recycled paper, reducing waste, and maintaining a healthy work environment.
While sustainable procurement is beneficial to our surroundings, there are several areas where it can provide a competitive edge to organisations. For example, with the increase of recycled materials and less fuel used, you can save costs and reinvest them in your business.
Furthermore, you can increase your brand equity, and loyalty as about 66% of the customers are willing to pay extra for environment-friendly products.
Besides that, a supplier’s affiliation with a company that engages in unethical behaviour can have a financial and reputational impact on the company.
How Can Procurement Technology Help Propel Sustainability?
Through automation, electronic documents are made available and accessible to all the stakeholders, eliminating the need for paper-based procurement such as purchase requisition forms, purchase orders, and good receivable notes, which helps reduce the carbon footprint.
That, in turn, also reduces the need for traditional machines like printers, which saves cost, space, and energy and consumption.
When industries have many environmental and social legislation and regulation to address, organisations can enable compliance management by leveraging technology.
It helps quickly identify socially responsible suppliers who are green compliant and have certifications from sustainable rating brands like Ecovadis. That helps keep a check on the reputation of these suppliers in regards to unethical practices like child labour, increased carbon footprint, producing hazardous waste, etc.
Sustainable sourcing also plays a vital role in goodwill and a company’s success in today’s world, as 67% of consumers prefer to work for socially responsible companies.
Transport and Demand Planning Optimisation
With the help of procure to pay software and automation, you can create a demand-driven supply chain, allowing for better visibility into demand trends. So instead of manufacturing based on projections from past data, this enables manufacturing the precise quantity of inventory needed to fulfil customers’ demand. Hence, ensuring that the supplier is not wasting any excessive production material that may lead to environmental damage.
Furthermore, delivering products as per the customers’ demand also saves transportation fuel that otherwise is wasted on transporting excessive needless products. This leads to optimised transportation that along with saving fuel costs, decreases CO2 emission and thus enables sustainability.
We are committed to supporting the Sustainable Procurement Pledge (SPP), which is why all of the team have signed the Pledge and are active Ambassadors.
As leading Procurement Recruitment specialists, we have a key role in helping the SPP achieve its vision of all global supply chains embedding sustainable procurement practices by 2030.
We believe that in leading the debate around sustainability with candidates, clients and procurement influencers, we can make a real difference.
Click here to find out more about our commitment to sustainability.
About the Author
Mohammed Kafil is a certified procurement consultant who has been coaching companies to establish resilient digital procurement operating models for over a decade now. With Kissflow Procurement Cloud, a flexible procurement software that streamlines the end-to-end procure-to-pay process, and also eventually the vendor management process. Kafil helps medium and large enterprises with their digital transformation projects. In the recent past, he has also worked with Fortune 500 companies to implement platforms like Coupa, Ariba, Ivalua, and BuyerQuest.