Environmental impact: reducing your procurement emissions

April 30th, 2024
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In an era of ecological crisis and global warming, companies and their leaders must become aware of the growing challenges and get ready to be part of the solution. The time has come to reduce the environmental impact inherent to their activities, in the most effective way possible. This implies adopting a methodical approach at all levels of the organisation, starting with the procurement strategy.

Environmental impact: Definition

Environmental impact refers to any qualitative, quantitative or functional modification of the environment, generated by a project, organism or product, throughout its life cycle.

Environmental impacts are manifold and can cause:

  • Climate change (greenhouse gas emissions…);
  • Natural resource depletion (raw materials, energy…);
  • Pollution of air, water, soil…
  • Threats to biodiversity (impacts on fauna, flora…).

It is important to recall that any activity, project or product has an impact on the environment. For instance, any commercial good needs raw materials and energy to be manufactured, packaged and transported, even when it is refurbished and/or produced from recycled material. This is an undeniable fact.

For companies, the whole challenge lies in minimising the negative impacts their activities can have on the environment and human health, or even maximising positive impacts (soil regeneration, increased biodiversity…).

How to measure the environmental impact of procurement

There are various ways to measure a company’s environmental impact. While environmental impact assessments are the prime tool for organisations, other methods are particularly relevant for procurement departments. These include carbon footprinting as well as assessing life cycle and life cycle costs for products. They all rely on the international ISO 14001 standard for environmental management.

ISO 14001 is a voluntary international standard for better managing a company’s environmental impacts. It defines the criteria for an effective environmental management system and can lead to certification.

Carbon footprinting

Carbon footprinting consists in measuring the greenhouse gas emissions generated by an organisation over a given period, identifying their sources and categorising them (scopes 1, 2 and 3). Based on this assessment, the company can define actions to implement in order to reduce its carbon footprint. Despite what its name suggests, this analytical work goes well beyond carbon dioxide emissions to cover all other greenhouse gases: Methane, nitrous oxide, ozone…

This approach meets companies’ decarbonisation objectives. Many have aligned themselves with the ambitions of the Paris Agreement, which is to achieve carbon neutrality by 2050. Procurement departments are particularly involved in reducing scope 3 carbon emissions - that is, indirect greenhouse gas emissions (mainly from suppliers) which account for 80 to 90% of a company’s total emissions[1].

Life cycle assessment

Life cycle assessment (LCA) aims to analyse the impacts of a product or service on the environment, at all stages of its life cycle. This ranges from raw material extraction to end of life, via manufacturing, distribution and use. This approach will ultimately facilitate eco-design and product recovery.

Life cycle assessment enables procurement departments to make relevant comparisons between different products and/or services within the same category, and thus make informed choices. Buyers can rely on this rigorous methodology to foster their sustainable procurement policy.

Life cycle cost

Life cycle cost (LCC) allows evaluating all the costs associated with a product or service, from design through to end of life. This method goes far beyond purchase price, as it encompasses direct costs (maintenance, repair…) as well as environmental externalities. The latter represent indirect financial impacts on society and the environment, which are not always easy to quantify.

Thanks to this, procurement departments can assess the real cost of a product or service in its entirety. They are then able to opt for products which, although seemingly more expensive, constitute a better alternative in terms of profitability and long-term environmental impact.

The importance of building strategic partnerships

To effectively reduce their environmental impact, companies must imperatively apply this strategy across their entire value chain. This necessarily entails selecting commercial partners committed to environmental sustainability, namely suppliers, subcontractors and other service providers.

Such strategic partnerships are powerful drivers to accelerate the development of a sustainable procurement approach. They go beyond economic interests to promote knowledge sharing and best practices, such as favouring renewable energy use over fossil fuels or implementing better waste management. They are real incubators for innovative ideas, enabling the exploration of new approaches, technologies and methods for better preserving the environment. It is by collaborating in this way that companies can develop solutions and business models in line with sustainable development. This can even extend to influencing public policies, thereby strengthening the impact of their collective action beyond their own organisational boundaries.

A corporate culture focused on sustainability

Building a corporate culture focused on sustainability is another prerequisite to effectively reducing a company’s environmental impact. While the drive must come from the management, it is the teams who implement this approach. As such, raising employee awareness and providing training are the cornerstones for instilling[GM1]  this type of corporate culture. The aim is to raise awareness of current environmental issues and the concrete actions to be taken.

From a procurement perspective, specific training on sustainable procurement is essential to equip teams with the necessary skills. This helps them rely on proper methodologies, select suppliers aligned with these commitments and integrate sustainability into every stage of the procurement process.

By incorporating sustainability into their procurement strategy, companies can not only minimise their impact on the environment, but also improve operational efficiency and strengthen their brand image. This represents a concrete commitment to their ecological transition and a more sustainable future for all.


[1] McKinsey & Company, Buying into a more sustainable value chain, 2021

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