Sustainable procurement: What it means, the state of play and the advantages it offers

Sustainable procurement
January 9th, 2020
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Sustainable procurement takes into account key criteria (price, quality, delivery times etc.) but also aligns itself with the broader umbrella of sustainable development and social responsibility.

In this post, you will find the answers to all of your questions about sustainable procurement:

What sustainable procurement means

Procurement is always subject to key criteria such as price, quality, delivery times and level of service. However, taking a sustainable approach to procurement means also factoring in new criteria related to sustainable development and social responsibility, together with the overarching considerations of life cycle and overall cost.

In other words, buyers aiming for a sustainable approach to procurement must find a balance between three fundamental concepts:

  • The environment: energy performance, waste reduction, product service life etc.
  • Ethics and society: respect for human rights, working conditions, inclusion, diversity etc.
  • Economic considerations: costs, product quality, delivery times etc.

The French organisation ObsAR (Observatoire des Achats Responsables — Observatory of sustainable procurement) shares its own definition of the concept: "[sustainable procurement is] any purchase that strikes a balance among stakeholders of requirements, specifications and criteria that protect and promote the environment, social progress and business development. The buyer seeks an efficient option that will improve the quality of service and optimise the overall costs (both immediate and deferred) within a value chain, and assesses the impact of these factors".  

EcoVadis, for its part, cites the concept of sustainable development[1] as defined by the United Nations World Commission on Environment and Development. The global platform for providing business sustainability ratings and collaborative CSR performance improvement tools defines sustainable procurement as « the adoption and integration of sustainability principles into procurement processes and decisions, while also ensuring they meet the requirements of the company and its stakeholders. It encompasses both: Product/ materials sustainability as well as the sustainability of supplier practices. »

The state of play regarding sustainable procurement

Published by EcoVadis, the "Sustainable Procurement Barometer 2019" provides an overview of the state of play regarding sustainable procurement on a global scale. This report highlights the widespread interest companies are showing in sustainable procurement. Indeed, 81% of the companies surveyed maintain that their level of commitment to sustainable procurement has increased over the last three years. This growth is partly in response to new regulatory requirements and their legal duty of care.

Over the last few years, the social and ethical aspects of business have also become a key consideration. This commitment to sustainable procurement is particularly evident in companies' introduction of a code of conduct for suppliers, specific contractual clauses or even a comprehensive sustainable procurement policy.

The advantages offered by sustainable procurement

Quantifying the returns on investment in a sustainable approach to procurement is not an easy task. However, the companies surveyed by EcoVadis cite seven main advantages of implementing an approach of this kind :

  1. Better risk control
  2. Reduced costs
  3. Fostering of innovation and differentiation
  4. Increased turnover
  5. Improved procurement indicators
  6. Improved non-financial ratings
  7. Improved talent acquisition and retention

Today, 50% of organisations consider implementing a sustainable procurement policy to be a priority[2]. With regulations becoming increasingly strict and stakeholders raising their expectations, the importance of committing to a sustainable procurement approach is now self-evident to both procurement departments and suppliers.
 

[1]"[making] development sustainable to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs."

[2]ObsAR, 2019