Sustainable Procurement (green procurement) is the approach an organisation takes to incorporate corporate social responsibility (CSR) principles into their procurement process and decision making.
Sustainable procurement goes a step further that traditional procurement, in that it considers the value to the buyer and the value to the wider community. Sustainable Procurement also focuses on the environmental, economical and social impact the organisation has whilst keeping aligned with the price and quality.
Implementing Sustainable Procurement within your organisation integrates requirements, specifications and criteria that are consistent with environment and society. It’s not just about reducing pollution and using sustainable practises. It also takes into consideration the impact an organisation has on the economic development of the surrounding area, natural resources, greenhouse gases, climate change and overall environmental impact as well as social impact.
Why invest in Sustainable Procurement
Risk Reduction – There is always a degree of risk depending on the suppliers an organisation uses. The relationship between your organisation and the supplier can have a financial impact on your brand value if the supplier engages in bad practises.
By adopting Sustainable Procurement, you must ensure your organisation only works with suppliers that are committed to the same principles as you. This keeps your organisation within compliance with environmental regulations.
Cost Reduction – Saving money and reducing cost is a necessity for any organisation. Through utilising Sustainable Procurement, you will be able to reduce the total cost of ownership through reduced energy costs, reduced consumption, reduced over specification, reduced environmental and social compliance costs.
Data from the World Economic forum shows sustainable procurement practises and can reduce procurement costs by 9 – 16%.
Revenue Growth – Sustainable procurement means that your will focus on giving back to society and the environment, this can bring additional revenue in a variety of ways e.g. utilising eco-friendly products and services. Increased price for premium services and income from recycling projects.
The World Economic Forum found that through Sustainable Procurement practises provides business with a 15 – 30% measurable increase in brand equity which foster revenue growth. According to a study from Oxford University 90% of studies on the cost of capital show companies who use sustainable standards lowers the costs of capital for companies.
Sustainable Procurement Benefits
Future Proofing – Once an organisation takes time to develop strategies and policies around sustainable procurement. They are working to future proof themselves against potential issues in the supply chain, whilst having the opportunities to support emerging market.
Improved Risk Management – Using Sustainable Procurement can reduce the risks of environmental impact, adverse weather events, natural disasters. This could have negative impacts on the supply chain. Using suppliers that are focused on sustainable practises can reduce environmental risk.
Enhanced Customer Perception – If your customer enjoys what you’re doing, they will support your business and brand image. This will bring more customers and revenue.
Reduced Overhead Costs – Through focusing on sustainability whenever possible, using energy-saving products and services will lower utility bills.
Competitive Advantage – If you competitors aren’t using sustainable procurement, you have the competitive advantage. You will be saving money and reduce risk; it will also improve you customer perception and leaves you in a position to grow revenue and become an industry leader.
Create Markets for new Products and Services – Having a supplier that understands your company’s principles allows a relationship where the supplier can make suggestions on how to change products and services to improve your operations and accomplish goals.
Improved Regulatory Compliance – If you’re in an industry with strict environmental and social legislation or regulations, sustainable procurement has massive benefits to maintain compliance.
How to adopt Sustainable Procurement Practises
The first things that need to be is meet with stakeholders and agree upon the direction your business is going. Once this has been established you need to develop strategies and polices. When making procurement decisions always keep in mind the future of the organisation before making any sourcing decisions.
When it comes to products and services you need to source, finding the right supplier is critical. You need to find someone who agrees with your new principles and policies.
Organisations in both public and private sector can benefit from sustainable procurement and sustainable supply chain. These processes often take time to properly implement and see the benefits.
What are we doing to incorporate this in Value Match?
At Value Match we pride ourselves on the values we hold at the core of our organisation. Two key values are community and environment, these are both hugely influenced by sustainable procurement and social value.
We have done numerous things to ensure we have a positive impact on the community and environment. The first thing is our entire organisation is carbon net positive. We did this through a company called Carbon Footprint. We calculated the amount of carbon we were producing, and Carbon Footprint offset it.
Value Match are also heavily involved in a non-profit charity called Kiva. This charity allows organisations to lend money to people in areas where it is hard to gain access to a loan from the bank. These loans are often given to women as they are in countries that don’t see them are equal to men. It gives the people the chance to invest the money and start their own business to repay the loan.
Value Match have also recently been working with an organisation called Circular Computing which will replace laptops and offset all the carbon the laptop will be produced. This is a new and exciting way of replacing older laptops making sure it is also efficient.
These are a few ways in which Value Match are taking steps towards sustainable procurement for more tips and advice visit our library.