There are strong business benefits to be gained by understanding and managing the sustainability issues that are significant in an organisation or industry’s supply chain. Traditional procurement practices focus on price, product quality and on-time delivery – criteria that impact directly on the bottom line. However, through its various supply chain practices, an organisation can positively or negatively affect the local economy, the environment and people – via its labour practices, level of product responsibility and policies regarding human rights and society in general.
Some of the advantages of embedding sustainability considerations into procurement processes include:
- Reducing risks (reputation, legal, environment, safety, continuity of supply, traceability and quality)
- Achieving operational efficiencies and cost savings
- Building mutually beneficial supply chain relationships
- Demonstrating corporate social responsibility
- Achieving and retaining certification to ISO14001:2015; ISO9001:2015 and ISO45001
The standard for Environmental Management Systems, ISO14001:2015, requires organisations to “determine environmental requirement(s) for the procurement of products and services and communicate these to external providers, including contractors”.
While the potential advantages are many, the integration of sustainability principles into procurement processes may prove to be complex and challenging in practice, particularly when there is resistance to change.
Summarised below are the 5 main ways that you and your organisation can exert a powerful influence on the supply chain in order to add value to the business and better meet stakeholder expectations.
1 Securing commitment from all levels of the organisation
- Preparing a business case
- Conducting senior management workshops
- Articulating a vision and long term goals
- Defining roles and responsibilities
- Building internal support for the program
2 Getting agreement about the sustainability impacts that are relevant and important
- Creating a process for determining the “materiality” or significance of each aspect
- Identifying key suppliers and other external internal interested parties
- Conducting stakeholder engagement
- Mapping issues important to stakeholders against business considerations
3 Identifying any significant issues that lie further up or down-stream
- Considering the full life-cycle of a product system
- Identifying and adjusting the organisation’s procurement practices
- Phasing out unsustainable products
- Working with suppliers to resolve issues
4 Effectively communicating expectations and requirements
- Creating a Code of Conduct
- Communicating the company’s expectations to suppliers
- Supplier’s self-assessment
- Monitoring the supplier’s performance
- Conducting supplier and contractor evaluations
5 Supporting people in procurement roles
- Developing policies to guide people in making better decisions.
- Creating assessment checklists for new or changed processes, materials and products
- Screening of suppliers and factories
- Searching for the most sustainable products
The Enviroease team has substantial practical experience in buying/procurement, facilitation, impact assessment, Life Cycle Assessment and management systems. Whether the need is for senior management workshops, stakeholder engagement, supplier audits or the development of improved policies and practices, we’d be happy to assist you.
Feel free to call me, Suzy, on 0418862899 to discuss your particular needs.
The world’s most widely endorsed principles on corporate and social responsibility, the UN Global Compact puts forth ten principles for business in three areas – labour standards, environment and anti-corruption – in support of the Agenda 21 goals for Ecologically Sustainable Development.
The Global Reporting Initiative‘s (GRI) “G4 Sustainability Reporting Guidelines” includes “procurement practices” as a specific standard disclosure – G4-EC9. GRI is the most used framework for sustainability reporting with over 25,000 GRI reports in the database from 90 countries and many more organisations using the indicators to help them set goals, measure performance and manage change in order to make their operations more sustainable.