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Taking action on sustainable procurement

Sustainable procurement has gradually become a priority for organisations over the past couple of decades, to the point that it has now become clear that supply chains can have a greater impact on the environment, society and economy, than any other part of their operations.

 

As an example, a few years ago Coca-Cola decided to cut the water used to make a litre of coke from more than 3 litres to 2.5 litres, before realising that it was taking over 200 litres to grow the sugar that went into that coke. Another example is the 2013 horse meat scandal which had a significant impact on supermarkets, albeit it was the suppliers that caused the issue.

Managing supply chains in a sustainable manner assists organisations in not only reducing their sustainability impacts and supply chain risks, but also in optimising their end-to-end operations to achieve greater cost savings and profitability. It also enhances competitive advantage and innovation, helps comply with regulation (such as the Modern Slavery Act introduced in the UK in 2015), and reduces the risks associated with procurement disruptions (like those associated with climatic extreme conditions). Suppliers, corporate clients and investors as well as the end users increasingly require sustainable practices to be applied throughout the supply chain.

Sustainable procurement involves integrating environmental, social and financial practices into the entire supply chain lifecycle, from product design to disposal. It requires looking into a variety of aspects which differ from organisation to organisation, but which typically include issues such as energy and water consumption, human rights, labour practices, conflict minerals, anti-corruption, community involvement and many more.

Introducing sustainability into a supply chain’s management involves a series of steps, some of which are highlighted in the new ISO 20400 guidance on Sustainable Procurement:

  • Integrating sustainability into the organisation’s procurement policy and strategy driven by top management
  • Organising the procurement function towards sustainability, through setting governance structure, engaging stakeholders, setting priorities and processes to measure and improve performance, etc.
  • Integrating sustainability into the procurement process, by building on existing processes, integrating sustainability requirements into specifications, selecting suppliers, managing suppliers’ contracts, etc.

To help organisations on this task, a wide range of specialised software is available and also a new technology called blockchain is being developed to enhance traceability for materials and products within the supply chain.

Either using high tech or not, it is highly recommend to work with your supply chain to identify associated risks, monitor and measure your procurement process to check progress and improvements, and communicate the results.  This way, you will turn risk into competitive advantage and stay ahead.

If there are any related experiences you would like to share or you have any successful stories, please do get in touch with us.

Victor Parrilla, Senior Consultant in the Environment and Sustainability team at WSP