Getting Started With Sustainable Procurement
As with any new initiative, you will face many unknowns when launching or growing your sustainable procurement program. Fortunately, hundreds of companies have come down this path before you with many of the same questions and issues.
Summarized below are the most frequent questions, and links to the resources, such as our blog and papers, where you will find answers and guidance.
Why Sustainable Procurement?
How are companies’ prioritizing Sustainability? What are the value drivers? Sustainable procurement is an accelerating trend, with over 90% of companies procurement heads prioritizing it as critical or very important. Drivers are centered on cost savings as well as risk mitigation, but a growing number of companies are realizing positive upside in terms of increased sales, differentiation of offers, enhancing innovation in the supply base and more.
Get the trends and insights: The Barometer Sustainable Procurement Benchmark report
Watch the video: Five procurement execs answer the question: “Why Sustainable Procurement?”
Read the study: Playing with fire: 4 Hidden Risks In The Supply Chain
Watch the webcast: Sustainable Procurement strategic drivers (part 1 of the Navigating Sustainable Procurement series)
How do I convince my management team to invest in a sustainable procurement program?
So you’re leading the charge to create a sustainable procurement initiative — now you need to recruit your boss, team, board, and others to support you. It will require not only money and resources, but also time and can involve engaging across various parts of the procurement organization and processes.
Read the new guide (From our friends at SPLC): The Business Case for Investing in Sustainable Procurement
Read the paper: 5 Steps to Building the Business Case for Sustainable Procurement
How much does a supplier monitoring program cost? (Or “How much can we — buying organizations and suppliers — save with a mutualized rating platform?”)
This question is often asked alongside “What can I do internally,” and “What should I outsource?” Here are some guidelines and tools we’ve developed over since 2007, working with over 450 procurement teams from global multi-nationals, to help you gain some insight on these questions.
Read the blog post: How Much Does a Supplier Monitoring Program Cost?
(*Note – see also the 2019 Barometer report above which reveals a “compliance trap” that hampers engagement and ultimately ‘coverage’, as well as the discussion of limitations of “SAQ”-type programs to beware of.)
How can I engage my suppliers to drive consistent, positive sustainability performance?
The majority of companies are not interested in assessing suppliers for the sake of assessment, but rather they are looking to drive improvements, reduce risks, and push towards innovation in the supply chain. The compliance mindset rarely achieves this. Transition to a performance based approach can get suppliers to take ownership of their performance, and drive lasting improvements and innovation with the supply network.
Five key elements emerge have enabled leaders to shift the focus of their programs to a performance mindset that engages suppliers in long-term sustainable procurement value. Companies are reaping the rewards not only in risk reduction, brand enhancement, and new revenue growth, but also in improving their total impact on the planet and the communities they touch.
Read the paper: Beyond Compliance: 5 Pillars of Sustainable Procurement Value Creation
Read the blog posts: 5 Rules for Supplier Engagement & Best Practices for Supplier Sustainability Assessments
I’m already performing on-site audits. Why do I need CSR assessment/monitoring?
The empirical evidence overwhelmingly indicates a significant gap exists in making audits a truly effective tool for supply chain risk management. Creating real transparency over the long-term and driving meaningful improvement in practices requires a more holistic approach that includes a multi-layered assessment and engagement program.
Read the blog post on Audits (Part 1): The Limitations and Evolving Role of On-Site Supplier Audits: 4 Reasons They Are Starting to Miss the Mark
Audits (Part 2): Maximizing On-Site Audits: A Multi-Faceted Approach to Supplier CSR Performance Management
What about my Indirect Spend — Why should I be worried about that? How do I address it?
While most procurement leaders focus their risk and CSR monitoring efforts on direct spend categories where their expertise, control and visibility are higher, indirect spend is a growing risk. On average, indirect spend accounts for approximately 27 percent of total spend and it’s only increasing due to more outsourcing and use of contract resources. This will continue to drive more spend into indirect service categories where site-audits are in most cases not appropriate. What are these risks, and what can I do about them?
Read the E-book on sustainability challenges in indirect categories of the supply base (By the procurement experts at Spend Matters)
Read the Briefing on sustainability challenges in indirect categories
What about Self-Assessment Questionnaires (SAQs)? We have a program already…
While supply chain risks continue to proliferate across many industries, businesses are discovering that assessing and managing them on their own — as well as helping their trading partners improve — is a considerable challenge. At the same time, sustainability is accelerating as a value-creator and/or strategic growth area in many industries. Many procurement teams start out by attempting to pull together their own supplier CSR self-assessment questionnaires (SAQs). But in order for companies to tackle risks with enduring results, and take advantage of these upside opportunities, CSR assessment tools and practices for the supply base must also evolve apace.
Read the blog on why self-assessment questionnaire data collection is not enough
View the 10-point comparison: How SAQs compare to ratings