Sustainability : Can Procurement do better than Governments?

November 14, 2010 EcoVadis

Since the failure of the Copenhagen conference, to agree on a real regulation of carbon emissions last December, it is becoming increasingly clear that governments are struggling to reach agreements on Sustainability issues. In May the French government decided to push back by 6 months the “environmental labeling” regulation, and watered down its scope. In July, the US “Climate bill” came to an inglorious end, when it was rejected by Senate.

Fortunately it seems that Corporate interest for Sustainability is not diminishing.

The UN published a survey in June indicating that 88% of CEO’s of Global companies consider “Sustainable Supply Chain” as a priority. In the past year, companies such as Walmart, Procter & Gamble and IBM have launched major initiatives to assess the Sustainability performance of ten’s of thousands of suppliers. Last month, the French Telecom Operators (Orange, SFR, Bouygues Telecom) also announced launching a common platform (operated by EcoVadis) to assess their suppliers CSR performance.

All these projects should also trigger a massive domino effect, as suppliers are required to gather Sustainability metrics from their own suppliers.

In the current economic crisis, addressing customers demands is critical for all companies, and those Sustainable Supply Chain initiatives are key to fostering change in the CSR practices of suppliers, especially SME’s. Analysis of the EcoVadis database shows that 12 months after the initial rating, 75% of suppliers are capable to improve their CSR performance.

We are entering a period where international regulations are more and more difficult to agree upon, and where public debt is limiting the capacity of Governments to fund Sustainability initiatives. The role of Procurement leaders, is therefore becoming critical, to help drive the Sustainability agenda of their suppliers, while minimizing risks, and fostering innovations for their own companies.

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