Sustainable Procurement. When social responsibility is also good for business
Sustainable procurement is a process by which companies integrate social, ethical and environmental considerations when selecting suppliers.
The careful selection of suppliers, also in terms of sustainable sourcing, is increasingly a central issue for companies.
Widening supply chains expose companies not only to economic risk, such as supply interruptions or cost uncertainties, but also to intangible risks such as the threat to reputation. Increasingly, companies must also take responsibility for the environmental, social and ethical practices of their suppliers.
Typically, the aspects that are taken into consideration are:
- compliance with fair labour practices
- the use of materials that are not hazardous to humans and the environment,
- the proper disposal of waste,
- compliance with environmental laws and regulations.
What does a sustainable procurement process look like?
Working in these terms not only represents a commitment to these issues, but also has the ultimate goal of building strong and stable relationships with suppliers and, in the long term, this can translate into a competitive advantage even on a more purely economic level.
- Corporate vision
The sustainable sourcing process can only be developed if the company has decided to adopt a strategy oriented towards environmental sustainability. Only then can it be defined how sustainability values can be integrated into all internal processes.
- Employee training
Once the guidelines have been defined, it is important to train buyers to integrate sustainability parameters into their purchasing practices and decision-making processes.
But training must also convey the corporate vision. A sustainable business project involves the entire value chain, has a goal that goes beyond the individual company and task and will bring long-term benefit.
- Define and communicate objectives to suppliers
The next step is to inform suppliers and potential suppliers about the company's sustainability policy. Goals and requirements must be made explicit in a clear and consistent manner, also by incorporating them into contracts or codes of conduct. In this way, the supplier will be clear what individual aspects need to be addressed.
- Accompanying suppliers in the definition of sustainability policies
Collaboration in the target structuring phase is central to this process. It is not only necessary to impose rules and targets, but a path must be built together so that the supplier also develops responsible business management practices independently.
- Performance Analysis
Monitoring suppliers through evaluations and audits is an essential activity to give continuity to the process. Not only that, continuous comparison can trigger a virtuous circle that allows synergies for growth and constant improvement to develop.
Why choose sustainable procurement?
So far we have seen what we need to do and what investments the company and suppliers need to make. But why is it a good investment, what are the benefits?
✔ Improves corporate reputation
Choosing a supplier not only because of affordability, but because it is ethically aware, does not exploit workers and respects the environment, has a direct impact on corporate image and brand value.
✔ Increased revenues
More and more consumers are interested in sustainability and have this as a purchasing parameter. Adopting sustainable procurement could open up business to these consumer groups.
✔ Cost reduction
An integrated approach can lead to lasting cost reductions, which are primarily achieved by reducing waste and improving resource efficiency.
✔ Lasting partnerships
Developing sustainable procurement practices enables a company to build strong relationships with its suppliers, and secondarily with its customers. And these can turn into a competitive advantage in the medium to long term.
