Effective Strategies for Achieving Sustainable Procurement

In today’s rapidly evolving business landscape, an understanding of sustainable procurement is critical. The global market is not just about buying and selling anymore. Rather, it is a complex web of deliverables, resources, impact assessments and risk allocations. 

The question is, how do we align business practices and procurement strategies to uphold our ethical obligations?

What is Sustainable Procurement?

“Sustainability in procurement is not a matter of if, but when and how.”

Sustainable Procurement is about taking actions that consider the environmental, social, and economic impacts of your purchasing decisions. It involves looking beyond the traditional factors like price and quality, and making an effort to minimise harmful environmental and increase positive social impacts throughout the global supply chain. 

From a business standpoint, it’s not just about being ethically responsible. It’s also about ensuring the sustainability and success of an organisation in the long run.

What are the Benefits of Sustainable Procurement for a Business?

Sustainable procurement shouldn’t be viewed as a ‘nice-to-have’, it offers clear and tangible benefits. 

1. Reducing risk – By implementing sustainable procurement practices, you can actively manage risk and build resilience within your supply chain. Diversifying your supplier base not only ensures different supply options but also fosters competition, driving innovation and improvement. Ensuring variety among your suppliers helps to avoid over-reliance on critical suppliers, which again helps to mitigate risks. 

2. Innovation – Suppliers often have a wealth of untapped ideas that can generate efficiency and productivity gains, boost services, or improve products. You just need to ask! 

3. Positive social and environmental impact – Above all, sustainable procurement offers the opportunity to make a meaningful impact on society and the environment. Your supply chain decisions can help protect and nurture local communities, influence fair labour practices, and ensure the responsible use of natural resources. 

Sounds Great but How Do I Get It Over the Line?

Knowing where others have struggled can be a vital tool for building a solid strategy. There are plenty of obstacles that Procurement Professionals come up against when trying to introduce Sustainable Procurement initiatives. These are some of the most common:

1. Lack of understanding and awareness about sustainability. Many organisations or leaders view procurement in purely transactional terms, focusing only on cost savings. This can lead to resistance to new ideas, making it difficult to gain buy-in for sustainability. 

Tip – accurately gauge where your organisation is and don’t push too far and aim to achieve everything at once. Take small steps and consider undertaking a pilot project first to act as a case study.

2. Difficulty in measuring the impact of sustainable procurement. Sustainable procurement requires a broader set of metrics that can be difficult to define and track. These might include environmental impact, social impact, and long-term cost savings, among others. 

Tip – a good place to begin with creating impact measures is to focus on the difference a service makes for people. For example, this contract increased library users by 4%, or, this contract created 4 additional apprenticeships. View this example framework.

3. A shift in organisational culture and mindset. This can be a slow and difficult process, particularly in organisations that are used to doing things in a certain way. It requires strong leadership and a commitment to change at all levels of the organisation. 

Tip – find a senior leader to be a champion of the project, you can influence up and they can influence down. A senior leader can be your biggest cheerleader!

4. Supply chain complexity is another common challenge. Many organisations have complex, global supply chains that can be difficult to manage and control. Ensuring sustainability throughout the supply chain requires a high level of transparency and cooperation from suppliers, which can be difficult to achieve. 

Tip – pick one category or supplier where you know you can make a difference. Conduct a pilot before launching a full programme. You can also ask for suppliers to volunteer to work with you on a sustainable initiative. Suppliers can then use this case study for their benefit as well.

5. Finally, there can be legal and regulatory challenges associated with sustainable procurement. Laws and regulations related to sustainability can vary widely from one jurisdiction to another, making it difficult for organisations to develop a consistent, global approach to sustainable procurement. 

Tip – if you follow a principle based approach you can’t go wrong, not everything has to be in a contract. 

For further tips, check out How Can Procurement Navigate Consumer Sustainability Trends.

What Happens When It Goes Right?

Under the broader outcomes policy, a 2021 case study from the Ministry of Business, Innovation and Employment showcases the beneficial impacts this approach can produce. The Ōtākaro Avon River Corridor Project demonstrates the partnering of a community and suppliers to maximise the benefits through the procurement process. 

In the case of the Ōtākaro (now referred to as Rau Paenga) Avon River Corridor Project, the procurement process was designed to achieve several Sustainable Procurement outcomes. These include not only the physical reconstruction of the damaged area but also the provision of employment opportunities for locals, the revitalization of Māori culture, and the creation of an eco-friendly habitat. This project demonstrated how procurement can be strategically used to deliver a wide range of social, economic, and environmental benefits. The project partnered with local communities, iwi (Māori tribes), and suppliers to ensure these goals were met. 

The Ōtākaro Avon River Corridor Project demonstrated how a commitment to Sustainable Procurement can generate wider benefits beyond the immediate purchase. It validates the notion that through carefully planned and executed procurement processes, you can not only meet the immediate objectives but also create long-lasting benefits for communities, the economy, and the environment.

You Can Make a Difference

Are you ready to make a tangible, positive impact with your purchasing power? It’s time to revolutionise your procurement strategies – let’s help create a sustainable future that works for all!