With 2015 now in the rear-view mirror, we can take stock of it as a year full of commitments, goals and guidance. Looking ahead, we see great hope that the momentum will carry us forward: As we move into 2016 we are already starting to see the next steps and trends to put the tools and processes in place to bring Sustainable Procurement into mainstream business.
In 2015 we saw the foundations laid for the global aspirations for sustainability and Corporate Responsibility. It was a year of growing awareness, agreeing on commitments, defining targets and guidelines, and embracing a mandate for sustainability in 2015 for governments, businesses, leaders and consumers alike. Here are some of the most inspiring examples:
UN Sustainable Development Goals (SDGs): These new goals from the UN that replace the previous Millennium Development Goals (MDGs) are: more comprehensive (17 vs 8); more definitive (get to 0 poverty/hunger/emissions etc. vs the ‘halfway’ that the MGDs sought); more universal (for example the global abundance/poverty dynamic has shifted to an intra-national rich/poor balance struggle) and in many ways more practical (with clearer strategies for targets, measurements, funding, etc.).
The ISO 20400 standard for sustainable procurement guidance was published for public comment. This comprehensive document outlines basic principles for sustainable supply chains including accountability, where organizations are responsible for understanding and addressing the impacts within its supply chain; promoting and facilitating transparency, both within the organization and its suppliers; and to seek transformative and innovative solutions, with concrete actions and reporting.
UN Global Compact and BSR published an update to their Supply Chain Sustainability: A Practical Guide for Continuous Improvement, covering important guidance such as supplier sustainability ratings.
In January of 2015, GRI launched their Reporting 2025 initiative. Their second update report revealed that “In particular, transparency in the supply chain, with the disclosure of validated data, is considered key to demonstrating consistency and the commitment to sustainable development in general.” Total reports in the GRI database hit a milestone of 30,000 in November!
The year finished in dramatic style at COP21. Along with the unprecedented agreement of the world’s leaders on seven commitments to stop climate change, it brought a spotlight on the CPOs of the world: Supply Chain was reported as the number two most impactful factor in combating climate change to achieve these commitments, as reported by GlobeScan and SustainAbility’s “Leadership on Climate Change: COP21 & Beyond” survey report .
As for the businesses themselves, 2015 saw progress in visibility and priority of sustainable procurement. For example this report on State of Sustainable Business 2015 by BSR and GlobeScan, which surveyed 200 large businesses reported that over 50% consider sustainability in tendering processes, 68% consider it in sourcing, and over 60% collect information from suppliers. In 2015 there was also tremendous outpouring of 1000’s of company commitments abate climate change (read more about it in this blog article)
What’s Around The Corner For Sustainable Procurement In 2016…
As we turn the corner to 2016, we’re already beginning to see a peek at what trends and transformations are to come in the year ahead: data, technology and networks will drive and accelerate CSR performance in supply chains. Here are a few things we see coming:
Technology and digitization of the supply chain:
2016 will bring technology to a broad set of challenges such as: Scalability of monitoring programs, advanced spend analysis, big data analysis to drive real-time insights from an expanding variety of sources like IOT/smart sensors and social networks, and trace and track goods or services from the supply chain on into the marketplace via usage of ‘block chain’ technology. Block chains could expand the data-set associated with tracking goods to an almost unlimited array attributes, for example linking sustainability to ‘provenance’ of those products (authenticating where they came from). Moreover it enables anonymization, and democratization of access to this information, so no one company holds all the data or control. These technologies all promise to accelerate innovation and transparency.
From What to Who (Relationships)
Despite all the headlines that products, materials, and technology advances make, it’s the people at the end of the supply chain that will make sustainability happen — or be victims of our failure to do so. In addition to knowing what is inside the products a company sells and where it comes from (e.g. lifecycle analysis), procurement teams must know WHO they are doing business with: Understanding how those supplier companies are run, what are they committed to, how mature are their management systems, and what are they capable of? This means finding reliable indicators across the key sustainability criteria.
Interconnected Networks for Collaboration
Like most challenges, sustainability is best tackled together. Networks that connect companies or industries together in a community with apps and data are the ones that will provoke change faster. Examples include: Tradeshift Risk and their app ecosystem, the all-in-one Pool4Tool offering that integrates EcoVadis CSR Ratings and RiskMethods data into procurement processes, or Industry alliances such as Together for Sustainability or Railsponsible. These collaboration efforts bring efficiency and even a competitive motivation for suppliers to increase their performance and keep pace with their peers across the network. This will accelerate us toward a future where companies take ownership of their own sustainability goals, improvements and success.
I’m awed and inspired by the advancement of sustainable procurement in 2015, and find immense hope in what’s in store for 2016. What is your outlook? I want to hear your thoughts, predictions or any feedback. Please share your thoughts in the comments, or email me at david.mcclintock@ecovadis.com.
By: David McClintock
Marketing Director at EcoVadis
