What is sustainable purchasing?
The act of sustainable purchasing is intentional. Companies striving toward more sustainable procurement practices make decisions that foster and support positive environmental, social, and economic impacts from material purchases as well as procured services.
Sustainable purchasing is also beneficial in more ways than one. Reworking the standard purchasing flow creates opportunities optimizes long-term efficiency savings and encourages the effective use of natural resources. Sustainable purchasing is at the heart of sustaining efficiency, reducing supply chain risk, and making decisions for long-term business value.
How can our company work toward a more sustainable supply chain?
Establish a Sustainable Purchasing Policy
A sustainable purchasing policy should be established to show your commitment to supply chain transparency, supported by a comprehensive program that standardizes your procurement practices. To effectively implement the policy, it should be approached in phases to establish goals, set supplier standards, and assign roles to ensure accountability. A policy of this nature should set standards for suppliers and include points that support your supplier code of conduct or supplier diversity program. It should note where preferences are given when considering purchasing options, such as the ease of recyclability, supporting minority/women-owned businesses, or choosing suppliers who make a committed effort to source responsibly (in compliance with United Nations Global Compact, for example). It should also cover areas such as:
- Labor and Human Rights: Including clauses related to worker health and safety, compensation, hours, and work environment.
- Environment: Support of suppliers that commit to reducing GHG emissions, possess ecolabel certifications, or, if applicable, have received a pre-defined threshold/rating on a sustainability assessment (CDP, GRI, SASB). Additionally, the policy may even include causes regarding transportation and packaging.
Find Efficiencies in Your Supply Chain
With a focused approach to sustainable purchasing, your company will find areas to optimize supply chain inefficiencies by reducing consumption. This can mean using less to offset cost of preferred items or to decrease use of a utility. An example of this being, energy efficiency to offset higher cost of renewable energy, or reducing the use of an office supply to offset the cost that may be associated with a more sustainable option.
Create Trained Procurement Roles and Teams
Employees involved with purchasing should be trained on sustainable procurement practices and abide by the sustainable purchasing policy. Hosting workshops or attending online webinars can assist in training those making purchasing decisions for the company. While a purchasing team should receive training in this area, it is important to implement sustainable procurement practices cross-departmentally and have top-down support from leadership to generate buy-in.
Ambitious Goal Setting to be a Driving Force
Setting goals sets a direction for your company’s intentions with sustainable purchasing. Setting big goals will achieve big results in the long-term and help drive sustainable purchasing efforts. Time-bound goals provide a framework and course of action that will direct where resources need to be allocated and adjustments in supply chain may need to be made. Net-zero, carbon neutral, and other reduction goals are examples that sustainable purchasing can help achieve. Every goal should be traceable to visualize progress and disclosed to increase transparency with stakeholders.
Standardizing sustainable purchasing procedures increases business value through the intentional optimization of resources. Taking a new supply chain approach is a worthwhile business strategy that can be strategized through policies, programs, trainings, and goals; as well as a method to increase transparency and meet stakeholder ESG demands.
To learn more or to inquire for the drafting of your company’s sustainable procurement policy, contact our team of experts.