Building a Business Case for Sustainable
Procurement: a 5-Step Guide
Drivers for Sustainable Procurement
- Cost Reduction: Reductions in the total cost of ownership are linked to reduced energy costs, reduced over-specification, reduced consumption, as well as reduced social and environmental compliance costs.
- Risk Reduction: Financial impact on brand value from bad supplier practices, such as child labor or local pollution and the economic costs of sustainable procurement disruptions, like non-compliance with environmental regulations.
- Revenue Growth: Additional revenue through new eco-friendly products and services, price premiums, or income from recycling programs.
Why Choose Sustainable Procurement?
- 15-30% measurable brand value increase: Sustainable procurement practices result in brand equity (source: World Economic Forum: Beyond Sustainable Procurement)
- 90% have lower cost of capital: 90% of studies show that effective sustainability standards lower the cost of capital for companies (source: Oxford/Arabesque)
- 9-16% sustainable procurement cost reduction: Sustainable procurement practices can reduce procurement costs by 9-16% (source: World Economic Forum: Beyond Sustainable Procurement)
Benefits of Sustainable Procurement:
- Minimizes risks in a company’s business practices;
- Enables compliance with environmental and social legislations;
- Enhances consumer perception of the brand;
- Controls costs by adopting a wider approach to whole life costing;
- Creates markets for new products and services;
- Reduces waste and improves resource efficiency;
- Provides a competitive advantage in world markets;
- Facilitates access to capital and increases valuation.