Here’s What You Need To Know About Sustainable Procurement
What does sustainable procurement mean? Sustainable procurement is also known as sustainable purchasing and it is about ensuring that business purchases have a low negative environmental impact. It promotes sustainable initiatives and ensures that corporate social responsibility (CSR) principles are weaved into all the processes related to procurement. All this while ensuring the business needs and requirements with relation to procurement are met. That is, sustainable purchasing is about ensuring that businesses get quality and fair-priced products while ensuring that they are procured through sustainable practices.
A sustainable procurement program enables businesses to pledge and incorporate sustainable practices into procurement. An example is the Responsible Beauty Initiative that is aimed at beauty companies to ensure increased efficiencies while lowering the environmental impacts of their procurement strategies.
Benefits Of Sustainable Procurement
Businesses might wonder why sustainable procurement is important? Investment in sustainable procurement initiatives enables businesses to enjoy the following benefits:
Cost-cutting is a goal of every business and sustainable procurement initiatives can help you effectively do that. The World Economic Forum has found that businesses can save up to 16% on procurement costs when they turn to sustainable procurement. This can mean a lot to even small businesses and startups. The reason there is so much saving is that businesses don’t need to spend as much on compliance costs and other costs that add up hindering the business to grow. Savings from consumption and energy can add up enabling businesses to put this saved money into their other initiatives.
Helps reduce risks
When you opt for sustainable procurement your brand value increases as a result because you only build relationships with suppliers who are also using sustainable practices. This can help ensure that you are at par with the environmental regulations that have been put into place. If your business does not comply with environmental regulations then your brand value will diminish which can impact how your customers view your business. Hence, it helps mitigate risks and allows you to comply with the laws so you can do business with minimal or no risks.
The sustainable procurement initiatives can boost business revenue too. Businesses that take the pledge and turn to sustainable practices are more likely to opt for innovation that results in a rise in sustainable products. For example, creating sustainable goods and services can impact everyone involved and this can help boost business growth. People are more inclined to buy from businesses that practice sustainability thereby increasing the revenue even further. Businesses can invest in activities such as recycling programs which can have a big impact and can help in revenue generation.
Efficient resource use
Natural resources must be used efficiently and with the help of sustainable procurement initiatives, businesses can ensure that it happens at all times. It is easy to undermine the importance of efficient use of natural resources but it must be done for the benefit of all. Businesses that take sustainability seriously ensure that resources are used in the best way possible. This helps reduce unnecessary wastage that is rampant. This can also help curb other problems such as pollution problems that can affect everyone negatively. For a business, this can help save costs and increase efficiency overall.
How can procurement be sustainable? Businesses can find it difficult to start with sustainable procurement but due to the long-term benefits, businesses must be determined and ensure all the necessary procedures are in place before they begin. For example, the first step towards sustainability in procurement is to think of sustainable goals; both short-term and long-term. This will enable businesses to evaluate and consider the different ways in which they can make sustainability a priority. After this, businesses must ensure they know about all the risks involved in procurement. The risks assessment stage is an important one for businesses as it ensures vendors are carefully chosen.
The next step in sustainable procurement is to choose vendors. It is vital to ensure that contracts clearly mention the sustainable initiatives and the expectations from the vendors. It is also critical to ensure that businesses look into the vendors that source from other suppliers. In order to succeed in sustainability in procurement, businesses must ensure the entire supply chain is taking sustainable measures into account. Businesses must create risk profiles and then set criteria. Once this is completed, the vendors must be monitored, especially the ones that the business is going to have a long-term contract with. This is particularly true with high-risk contracts.
Related Insights:View All
Get more stories like this
Subscirbe for more news,updates and insights from Beroe