Discussion of sustainability is increasingly common in business contexts. However, if we aren’t careful, we run the risk of sustainability losing all meaning (or gaining infinite meaning?). Colleen Theron and Malcom Dowden, a duo of British lawyers, have collaborated to write “Strategic Sustainable Procurement,” and they’ve successfully brought sustainability back down to Earth. Following the goal of the DoShorts series, to which the book belongs, the authors dig into the everyday aspects of sustainability that procurement officers must now incorporate in their routine.
The text defines sustainable procurement as “a process whereby organizations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organization, but also to society and the economy, whilst minimizing damage to the environment.” But why should an already successful, independent organization be concerned about the benefits of sustainability? Establishing best practice sustainable procurement principles can minimize environmental and social risks while providing financial benefits, promoting sustainable consumption, and improving business collaborations.
However, the authors argue that incentives are not enough – standards and regulations are needed. European and other legislation as well as independent standards such as BS 8903, Fair Trade Standards, and ISO 20121 provide the beginnings of quality assurance based on sustainability principles. Theron and Dowden suggest expanding this assurance by working from the international to local to organization level to create the most efficient policies and standards. With proper measures in place, every link in a supply chain is motivated to incorporate environmental and social benefits into its value chain.
Even without statutory requirements, there are many drivers encouraging sustainable procurement, benefiting areas such as: brand image, competitive advantage, stakeholder goodwill, revenue, legal obligations, and exposure to risk. A couple examples from the authors are that Danone France saved €2.5M in one year by removing cardboard from yogurt product packaging, while Baxter lost $11M due to a product safety recall. The former reduces costs and waste, while the latter could have been avoided with stronger supply chain management.
Theron and Dowden move on to offer several tactics for effective, strategic, sustainable procurement. They emphasize the importance of listing exactly what factors are most important to the organization creating the policy. For example, a policy created in coordination with all affected departments drives its success and resiliency. Early engagement with suppliers and stakeholders also helps ensure that the relevant aspects of the supply chain are covered.
The authors list some of the key criteria for managers to consider during the procurement process. During the evaluation and selection of suppliers one should, for example, consider the MEAT (most economically advantageous Tender), which includes sustainable criteria, and not simply the least-cost tender. It is the buyer’s responsibility to fully communicate their requirements to potential suppliers in order to receive the most relevant proposals.
One of most simple yet crucial ideas Theron and Dowden included in their text is the idea to “challenge the decision to procure!” (p.88). As part of the checklist for implementing a strategy, companies must investigate if procurement is even necessary at all. Several tools are provided for managers to assess this question (CLASPinfo.org). However, the book itself offers no details on how this should be accomplished.
Theron and Dowden’s work helps paint a picture of what strategic sustainable procurement looks like. Their text serves as a first level guide for professionals involved in all levels of this topic. The authors’ references provide ample resources for individuals seeking that next level of detail to establish their own sustainable procurement policy.
Authors: Chris Economides, Maureen Loman, and Mike Schwartz
First published in the Sustainable Supply Views blog from EcoVadis.com
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