What is it?
According to Eco Vadis Sustainable procurement is ‘the implementation and integration of an organisation’s corporate social responsibility policies into the procurement process’ (ecovadis.com.) Although sustainability is often associated with environmental concerns this is not the only consideration. It also includes the economic and social effects of products throughout their life cycle. Sustainability in procurement means that an organisation makes the most ethical choices around the sourcing of products and services. This results in an organisation that considers the effect of its purchasing choices environmentally, economically, and socially each time a product or service is procured. It is an extension of an organisations corporate social responsibility policies into the procurement process (bitc.ie.)
Why make procurement sustainable?
Although sustainable procurement has been described as complex and difficult to implement, there are many long-term benefits (Eco Vadis Whitepaper, 2018.)
Sustainable procurement improves efficiency, effectiveness, and employee supplier relationships. Within these areas it affects risk management, reputation protection, cost savings potential, value creation, future proofing a company, increasing transparency and is also a way of differentiating a brand. Consequently, the incentives in facilities management to make procurement sustainable are numerous.
Risk management is affected by sustainable procurement practices as it has the potential to positively affect an organisations reputation. This is usually evidenced by an organisation being aware of the risks of not implementing sustainable practices such as damage to reputation.
The cost savings potential associated with sustainable procurement is evidenced in areas such as a reduction in energy consumption, recycling costs and packaging production. The value creation through sustainable procurement includes developing new environmentally friendly products and leveraging suppliers’ environmental innovations.
Procurement that is sustainable is also used to future proof an organisation. This is due to the consideration given to how procurement choices will affect the company in the future. Moreover, meeting the demand of new emerging markets and scarcity of supply are also issues that would require procurement to be sustainable. The use of sustainable procurement to differentiate offers opportunities for an organisation to develop new products and services that are more sustainable. These in turn may be more relevant to new markets and revenue streams.
What affects sustainable procurement?
While the benefits of sustainability in procurement are numerous, it is worth noting the other factors that influence sustainable procurement such as the type of information available and technology.
The decision to drive a more sustainable procurement process, although influenced by the many benefits, can also be influenced by practical information about sustainability. As mentioned at the beginning, sustainability is frequently associated with environmental concerns. In facilities management, this can present a good starting point by introducing a ‘green cleaning’ program and sourcing cleaning products that are less harmful to the environment.
Technology influences many areas of sustainable procurement such as energy consumption and communication. The procurement choices made to ensure sustainability in energy consumption may can affect obvious areas of facility management such as switching to motion sensor lights to reduce the effect of lighting on costs. However, technology is used in sustainable procurement for areas such as better understanding supply and demand to avoid over production or consolidating shipments to ensure that containers are fully utilised using predictive analytics (PWC, 2018.) Moreover, when procuring items for a property, having information available to trace through the supply chain the origins of the components used and ensuring that their production is in line with the sustainability values of the company again show the all-encompassing effect of sustainability on procurement.
Sustainability is essential. We try to incorporate this value in all areas of our business including procurement. Commitment to sustainable procurement ensures that our values are integrated through the company’s supply chain and into the lifecycle of the products we use. Earlier this year, we were delighted to receive the Eco Vadis silver medal for sustainability in corporate social responsibility.
McClintock, D (2018) Building the Business Case for Sustainable Procurement: A Five Step Guide (ecovadis.com)
PWC (2018) ‘Fourth Industrial Revolution for The Earth: Harnessing Artificial Intelligence for the Earth’ (https://www.pwc.com/gx/en/sustainability/assets/ai-for-the-earth-jan-2018.pdf?utm_campaign=sbpwc&utm_medium=site&utm_source=articletext)
BITC (2015) ‘What is Sustainable Procurement?’ ( https://www.bitc.ie/newsroom/news/what-is-sustainable-procurement/)