As part of their CSR strategy and sustainable procurement policy, many companies seek to give priority to purchasing sustainable products and services. To achieve this, they need to be aware of the CSR (Corporate Social Responsibility) impact of their procurement, and in doing so, bring to light the social and environmental issues affecting various economic sectors. This invaluable data, which must be supported by formal proof of a commitment to CSR, represents a strategic decision-making tool in business.
The CSR impact will never be neutral
All products, even those considered the most eco-responsible, have some form of CSR impact. That’s just how things are. Their manufacture, distribution, transport, end of life and sometimes even their use inevitably have consequences for the environment and society.
This CSR impact is usually assessed by measuring specific indicators relating to air, water, soil resources and human health. Specifically, greenhouse gas emissions, atmosphere acidification, primary energy consumption, water ecotoxicity, ionising radiation and so on, are all taken into account.
Established mechanisms already exist for measuring impact, regulated by international standards – such as ISO 14067 for the carbon footprint of products, or ISO 14040 to 14043, covering life cycle assessment. At the same time, other methods are being developed, such as standard environmental labelling proposed by the European Commission, entitled "Product Environmental Footprint".
In recent years, some manufacturers, suppliers and even distributors have been getting ready to share this type of information with their customers. Among the main challenges in this field, the first is to make buyers aware of the CSR impact of their products and services, so they can make informed choices.
Make the CSR impact part of your procurement policy
As part of their CSR strategy, businesses should take this social and environmental impact into account in their procurement processes. This is reflected in the implementation of a new sustainable procurement policy which invites companies to re-think the procurement process in terms of social and environmental criteria, as well as in terms of life cycle rationale. More specifically, the idea is to optimise positive social impact and reduce negative environmental impact by taking everything into account, from the extraction of raw materials right up to the end of the product life.
When adopting this approach, companies need to follow a two-stage action plan. Firstly, these new sustainable development criteria can be integrated into the calls for tenders, as part of drawing up specifications or the supplier evaluation grid.
When it comes to office furniture, for instance, procurement departments may require these products to be made from recycled materials, or from sustainably managed forests. Naturally, they also need to verify the evidence relating to each of these criteria, whether social or environmental in nature. This might take the form of certification, labelling, life cycle assessment, signed statement, etc.
Secondly, these criteria can also be highlighted in company procurement systems, specifically in electronic catalogues circulated to internal customers. The latter can then make informed decisions by favouring products with a lower CSR impact.
What criteria should be applied to your indirect procurement?
Depending on the type of product, it will be more or less important to integrate certain social and environmental criteria into the company purchasing process. When it comes to indirect procurement or long tail spend, five key criteria should be reviewed.
Conserving resources
These products minimise or optimise the use of resources (raw materials, water and energy) in their composition. This might take the form of products designed using recycled, biosourced (i.e. renewable) materials, or materials from a sustainably managed forest, all of which promotes sustainability.
Waste reduction
These products minimise how much waste a company ultimately produces. These might be reconditioned or second-hand products, but also products that can be repaired, for which spare parts are easily available.
Reducing the carbon footprint
These products have a lower carbon footprint throughout their life cycle because their manufacture and/or use emits less carbon dioxide (CO2) compared to other products with equivalent performance. These include, for instance, rechargeable products, which consume less energy, or products which come in concentrated form.
Employee health and well-being
These products protect the health of employees and other people who use them, promote their well-being and even help improve their working conditions. This includes ergonomic products, which help employees avoid musculoskeletal disorders, or products which contain no (or very few) toxic or hazardous substances.
Social inclusion
These products help in creating greater professional and social inclusion for the unemployed or disabled. They are made by specialist firms promoting inclusion or come from fair trade sources, for instance.
Businesses often launch their new sustainable procurement process by implementing these CSR initiatives. However, this should eventually be combined with assessing supplier performance and CSR policy. This global approach will help transition companies towards a more resilient, sustainable, and responsible model, which is a competitive advantage in the making. This way, they can help protect the environment and do some good for society, while also, from a business point of view, anticipate regulations and nurture their brand image and reputation with stakeholders.
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