Sustainable Procurement: 5 essential elements of an effective process

Sustainable Procurement

by Suzanne Orme 17/2/19

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, a business can positively or negatively affect the local economy, the environment and a whole range of people – via its labour practices, level of product responsibility and policies regarding human rights and society as a whole.

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 (CSR)
  • achieving or maintaining certification to ISO14001:2015; ISO45001:2018 and ISO9001:2015

Clause 8.1 (c) of ISO14001:2015 requires organisations to determine environmental requirement(s) for the procurement of products and services and communicate these to external providers, including contractors.

The Sustainable Procurement Guidance ISO20400:2017 provides much needed help on ho2 to integrate sustainability into procurement processes.

But the integration of sustainability principles into traditional purchasing can be complex and challenging in practices. I gained some insight into this by working with a large organisation in 2017 to review its Sustainable Procurement Policy. There were clear barriers to implementation and resistance to change.

To avoid these pitfalls, I’ve summarised the 5 main ways you can start to embed sustainability into procurement practices to make the success of your efforts much more likely.

  1. Securing commitment from all levels of the organisation may include preparing a business case; conducting senior management workshops; articulating a vision and long-term goals; defining roles and responsibilities and building internal support for the program
  2. Getting agreement about the sustainability impacts that are relevant and important may include creating a process for determining the “materiality” or significance of each aspect; identifying key suppliers and other external interested parties
  3. Identifying any “hot spots” that lie further up or down-stream may include considering the full life-cycle or a product system; identifying and adjusting the organisation’s procurement practices; phasing out unsuitable products; working with suppliers to resolve issues
  4. Effectively communicating expectations and requirements may include creating a Code of Conduct; communicating the company’s expectation to suppliers; requesting a supplier’s self-assessment; conducting supplier and contractor evaluations
  5. Supporting people in procurement roles may include developing policies to guide people in making better decision; creating assessment checklists for new or changed processes, materials and products; screening of suppliers and factories; searching for the most sustainable products.

Incorporating these 5 elements into your sustainable procurement process will take time and effort.  So I recommend starting from square one by getting the commitment from top management and involvement of all relevant people.  Its a process of continual improvement and you will learn as you go.

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