A Sustainable and Ethical Future – Procurement’s Time to Drive Change

The pressure for organisations to improve performance and delivery on sustainability promises has never been higher. Procurement and supply chain leaders hold the key to lasting change.

Get the fresh insights, data and perspectives you need to create an ethical supply chain in 2022 by downloading Procurious and Avetta’s new report, ‘Using Procurement’s Power for Good: A Global Approach to Ethical Sourcing’, now.

There has never been a more critical time to be working towards creating a more sustainable and ethical future than now. You may not think it or feel it, but you, as an individual, wield a tremendous amount of power to embed ideas, practises and cultures that will drive lasting change for generations to come.

For procurement and supply chain leaders, this power is increased thanks to the ability to use our unique platform to make a difference as individuals, for our organisations and as a global profession. This opportunity is not without its challenges, as with great power comes…well, you know the rest!

To help the procurement community get the ball rolling in 2022, Procurious teamed up with Avetta to survey professionals from around the world to benchmark global ethical sourcing practises right now. The results of the survey will provide fresh perspectives and ideas, enable the sharing of best practice and provide procurement with an idea of its role in the year to come.

You can get the full lowdown of the survey results, as well as all of the expert analysis, in our new report – ‘Using Procurement’s Power for Good: A Global Approach to Ethical Sourcing’. 

We’ve picked out some of the key results and thoughts below to whet your appetite.

1. The Enduring Nature of Procurement Influence

“88% of respondents say they are in position to drive change when it comes to ESG and ethical outcomes.”

In many organisations procurement has been a driving force for the sustainability agenda for a number of years. This was often down to the scope of procurement’s role, interactions with key stakeholders and, above all, management of strategic suppliers and the wider supply chain. Far from losing their influence as sustainability became a critical objective at organisational level, procurement has continued to be trusted with this responsibility.

This is borne out in the responses to the survey, with 46% of respondents stating that the ethical sourcing strategy was primarily owned by the CPO, with over a third (36%) highlighting the role of the CEO and Board in the process. Involvement of Senior Leadership shows the importance of ethical sourcing to organisations, but also the influence procurement continues to have.

This Senior Leadership support has given procurement professionals the belief that they can have a positive impact on ethical sourcing. In fact, 88% of respondents said that they were in a position to drive change in their organisation when it came to ESG and ethical outcomes.

2. Public Pressure and Climate Change are Key Drivers

“51% of respondents say the primary pressure is internal – the desire to do the right thing”

The increasing focus on sustainability and ethical sourcing and the rising profile of the supply chain in the public consciousness is seen by many as a key drivers for organisations. There is an expectation to be doing the right thing, not just being seen to be doing so, or applying a coat of greenwash to their supply chain.

However, over half of our respondents (51%) stated that the primary pressure ethical sourcing comes from ourselves, driven by the desire to do the right thing. This is not as surprising as it may seem at first glance given the intertwined nature of procurement and sustainability. What is more surprising is that this was nearly twice as high a response rate than the next two factors combined – Investors (16%) and Customers (12%).

When it came to external pressures, there were expected common themes, with an average of 45% across all regions highlighting climate change. There were, however, significant differences in the percentages within the regions, suggesting that diverse demographics and national trends play a major role in shaping individual priorities.

3. Modern Slavery is Still a BIG Problem

“Nearly 8% of organisations have identified an instance of modern slavery/forced labour in their supply chain.”

While 8% may not seem like a large number, this is in addition to the 20% of organisations that suspect modern slavery, but cannot confirm it. What is more telling is that, although the global procurement profession is aware of the issue, a quarter of companies have no process in place to identify modern slavery in their supply chain, and less than half have a process that is well-established.

Much of this is driven by a lack of visibility in supply chains past Tier 1 suppliers. Procurement’s influence and the impact of its policies lessen at lower levels, while many highlight consumer demand for cheap goods, or not wanting to pay a premium for sustainable products, as a reason why these issues persist, with action only taken when problems arise or a risk of reputational damage, for example, increases.

4. Supply Chain Monitoring – Must Do Better

“58% of companies monitor less than 10% of their sub-tier suppliers.”

If visibility of supply chains is an issue, then monitoring of supply chains is a massive challenge for procurement and the organisation as a whole. Procurement has done excellent work in ensuring that there are clauses in contracts governing Tier 1 suppliers, but frequently that is where their power ends. 

Nearly a third of companies (29%) aren’t monitoring any sub-tier suppliers and a criticism being levelled at procurement is that it has been too reactive in this area. Without commercial pressure being exerted, suppliers, especially in sub-tiers, aren’t motivated to change their behaviours. It’s time for procurement to take a far more proactive approach, which will require more than a little innovation on how suppliers are engaged with.

Time to Act – Together

This is no time to be disheartened though. What the report shows is that although procurement has made great strides in recent years, there is still plenty of work to be done. Procurement is still in a great position to influence global strategies and practises and drive change that will impact people, communities and countries around the world. The greatest tool procurement has is its network of global professionals who are all in this fight together. 

By working together and learning from each other through surveys such as this one, barriers can be broken down and the collective effort can lead to real change. 

Don’t miss out on learning from your fellow procurement professionals, understanding best practice, and what you can do as an individual to make change a reality. Download your copy of ‘Using Procurement’s Power for Good: A Global Approach to Ethical Sourcing’, here.