Summary In the contemporary business environment, digital procurement is becoming increasingly popular and sought after by businesses around the world. The relationships …
Why you should focus on sustainable procurement in 2023
Sustainability in procurement is an important consideration for businesses, especially now more than ever in 2023. Here’s how you can hop on board.
In recent years, more pressure has been put on private companies to adhere to regulations as concerns regarding sustainability continue to rise. It is no longer optional for corporations to work towards sustainability measures.
Sustainable procurement practices are among the most impactful when it comes to maintaining a positive impact as supply chains cause 90% of a company’s environmental impact.
What is sustainable procurement?
This is a process where a company’s social and environmental impacts are considered when deciding on the procurement strategy. The company’s Corporate Social Responsibility (CSR) and other environmental, social, and governance criteria are taken into consideration in this instance.
Here are the core considerations to be taken into account when forming a procurement strategy with a sustainability focus:
- Long-term impact: The long-term impact on resource availability, community, enterprise value, biodiversity, and climate needs to be thoroughly considered
- In-depth supplier evaluation: An in-depth evaluation of the supply chain is required to ensure that the suppliers adhere to the same values as the company
- Optimised spending and inventory: Optimising the spending on the supply chain not only helps with cost saving but also contributes to less wastage in the long run
- Enhanced supplier engagement: Encouraging supplier engagement in the company’s sustainability practices also contributes to an overall positive impact
Benefits of sustainable sourcing to businesses
- Creates a more focused, meaningful social impact
- Expands your CSR projects beyond the norm
- Keeps up with evolving consumer behaviour
- Mitigates brand risks on ethical and legal grounds
- Reduces costs and drives profit and goodwill
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Your path to sustainable procurement
In order to achieve these sustainability targets, a company needs a comprehensive view of all the elements of its supply chain, including planning, forecasting, management, and logistics.
Depending on the nature of your business, you can opt for initiatives, such as utilising renewable energy and energy-efficient technology, sourcing raw materials from sustainable manufacturers, reducing emissions related to transportation and processing, implementing sustainability measures within the value chain, and purchasing sustainable assets like carbon credits.
These are the best practices to consider when you’re setting up a sustainable process:
Evaluate the current process
Gauge whether the current supply chain has any sustainability measures in place and note the suppliers you can replace
Set up a code of conduct
Define a baseline for what you expect from your supply partners and simplify the evaluation and onboarding processes
Create awareness
Set up a team with the express purpose of educating and creating awareness of the company’s sustainability policies
Collaborate with suppliers
Offer incentives to your suppliers for adhering to your sustainability principles and routinely grading their commitment
Align business strategies
Make sure you align your business strategy with the new sustainability policies as well to ensure comprehensive adoption
How can Kronos Group help with your sustainable procurement policy?
Kronos Group is a procurement consultancy service provider and our expert consultants have served businesses all over Europe and beyond. Our procurement service model extends from advisory, transformation, and outsourcing to operations consulting.
Our procurement consulting services include:
If you are looking for guidance on integrating sustainability practices into your procurement processes, Kronos Group is ready to help. Contact our team of procurement consultants and reap the benefits of setting up a sustainable procurement process.
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