Sustainable procurement programs on the rise, still face challenges: EcoVadis Barometer results

February 14, 2017 EcoVadis ‏‏‎

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Culminating months of research, the 2017 EcoVadis/HEC Sustainable Procurement Barometer is now live and it’s worth a thorough read. We offer an introduction to the research findings.

 

Sustainable procurement programs are no longer optional or a mere nice-to-have, but an integral business function. That’s according to the survey research results from the new EcoVadis/HEC Sustainable Procurement Barometer, which collected input from procurement and supply chain professionals across the globe.

 

The research found that nearly all (97 percent) organizations surveyed consider CSR/sustainability important or critically important to procurement, continuing the upward trajectory of previous years and showcasing how established the field of sustainable procurement has become in less than 10 years.

 

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“Our needs for increased transparency and external reporting to public and private stakeholders is growing,” explained a top-five Pharmaceutical company. “That’s why we need to have good sources of data and for that, we need solid programs in place that address our material issues so that we are able to report on them.”

 

Even so, it looks like there’s still room for improvement: 45 percent of organizations say their sustainable procurement program covers most (75 percent or more) of their supplier base today, a significant jump from the last survey conducted in 2013, when only 27 percent of respondents said the same. However, depth of supplier visibility is still an area that most companies need to address, as just 15 percent of organizations said they have complete supply chain visibility into the Corporate Social Responsibility (CSR) and sustainability performance of both tier one and tier two suppliers, and only six percent report having full visibility into tier three suppliers and beyond. This is the number one challenge today for sustainable procurement organizations. Indeed, it is often further down in the ‘tail spend’ of supply chains where the most significant risks lie.

 

The benefits of sustainable procurement are tangible. Positive results were seen by companies across all areas measured, including improved brand reputation, stronger supplier relationships, and improved green rankings. However, the biggest increase was seen in terms revenue and sales: 50 percent of sustainable procurement leaders said they have seen increased revenue from the sustainable and innovative products and services they have sourced – a 33 percent increase over non-leaders.

 

When asked about the biggest obstacles preventing their organizations from more effectively engaging and committing to supply chain and procurement sustainability, the top issues called out were: a lack of internal resources, difficulty tracking supplier sustainability performance, and concerns around cost. This is a vastly different picture than 2013, when the number one internal obstacle cited was a lack of executive and board support. Today, that challenge doesn’t crack the top three, meaning that while the C-suite seems to understand the value of sustainable procurement initiatives, there’s still a gap between vision and execution.

 

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Fortune 500 organizations across the globe are investing heavily to ensure sustainability is ingrained across all aspects of their supply chain and procurement operations. The challenge – especially for chief procurement officers and chief sustainability officers – is to ensure the investment pays off and has the desired impact across the supply chain in accordance with CEOs’ and top managers’ expectations.

 

For the complete survey findings and more insight on scaling sustainable procurement programs, download the full report from the 2017 EcoVadis/HEC Sustainable Procurement Barometer, Scaling Up Sustainable Procurement: A New Phase of Expansion Must Begin.

 

About the Author

EcoVadis ‏‏‎

EcoVadis is the world’s most trusted provider of business sustainability ratings, intelligence and collaborative performance improvement tools for global supply chains. Backed by a powerful technology platform and a global team of domain experts, EcoVadis’ easy-to-use and actionable sustainability scorecards provide detailed insight into environmental, social and ethical risks across 190 purchasing categories and 150 countries.

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