Unlocking the Power of Sustainable Procurement: Insights from the 2024 Barometer

March 1, 2024 EcoVadis EN

In the dynamic landscape of modern business, sustainability has emerged as a pivotal driver reshaping the role of procurement and today’s chief procurement officers (CPOs) stand are facing an unprecedented opportunity to leverage sustainability as a catalyst for transformation. By aligning procurement with sustainability goals, CPOs can propel their organizations toward resilience, growth and value creation.

Our latest Sustainable Procurement Barometer, developed jointly with Accenture, delves deep into this potential for transformation. Based on a survey of nearly 600 buyers and over 1,000 suppliers, the report sheds light on the challenges and opportunities within sustainable procurement and offers invaluable insights into the strategies employed by industry leaders. 

While momentum is building, significant obstacles persist for both leading and mainstream programs. Key challenges include:

  1. Lack of ongoing C-suite engagement and buy-in: Many organizations struggle to champion responsible procurement initiatives and allocate resources, hindering the development of more integrated procurement programs. 

  2. Immature sustainability skills and capabilities: Procurement teams require new skills and capabilities to embed sustainable practices effectively, reflecting a shift away from traditional cost-focused approaches. 

  3. Low ESG integration into the procurement tech stack: The majority of organizations face challenges integrating sustainability data into procurement technologies, limiting performance management capabilities across the value chain.

  4. Limited value chain visibility and engagement: A lack of global visibility across supply chain sustainability risks, and insufficient supplier engagement activities hampers efforts to prioritize and drive meaningful change throughout the value chain, particularly in deeper tiers. 

Despite these challenges, the Barometer highlights encouraging trends and key findings: 

  • Alignment with corporate sustainability goals: A significant number of programs prioritize delivering on corporate sustainability goals, signaling a shift toward value-driven procurement strategies. 

  • Focus on value chain decarbonization: Leading and mainstream programs alike prioritize Scope 3 reductions and net-zero targets, emphasizing the importance of addressing environmental impacts comprehensively. 

  • Emphasis on social challenges: Mainstream programs increasingly prioritize social challenges within the value chain, reflecting a holistic approach to sustainability that includes labor rights, diversity, equity and inclusion. 

Building upon these findings and analyzing the top 10% of leading programs’ practices, the Barometer identifies actionable recommendations that CPOs can follow to leverage the full potential of sustainable procurement:

  1. Establish a solid digital technology, analytics and data quality foundation.

  2. Enhance N-tier visibility: Utilize tools such as risk mapping to gain greater visibility into deeper tiers of the value chain, informing targeted engagement strategies and investments. 

  3. Engage suppliers and industry partners: Foster collaboration with suppliers to accelerate the adoption of sustainable practices, leveraging initiatives such as carbon reduction programs and industry co-innovation efforts. 

  4. Integrate ESG data into procurement processes: Utilize technology to integrate sustainability data into procurement approaches, enabling informed decision-making and strategic engagement with C-suite stakeholders. 

  5. Cultivate executive sponsorship: Engage executive stakeholders with data-driven insights to drive internal mobilization, support sustainable procurement initiatives, and ultimately monetization and impact.

Amidst the challenges and opportunities outlined in the Sustainable Procurement Barometer, it’s crucial for organizations to recognize the interconnectedness of sustainability, resilience and long-term value creation. As businesses navigate an increasingly complex global landscape marked by evolving societal expectations, regulatory pressure and environmental concerns, the role of sustainable procurement becomes more significant than ever. By fully embracing sustainability and effectively integrating it into procurement practices, organizations can not only mitigate risks and increase operational efficiency but also foster innovation, drive competitive advantage and build lasting relationships with stakeholders across the entire value chain.  

For a comprehensive exploration of the key trends and issues in the sustainable procurement landscape, check out the full 2024 Sustainable Procurement Barometer

About the Author

EcoVadis EN

EcoVadis is a purpose-driven company whose mission is to provide the world's most trusted business sustainability ratings. Businesses of all sizes rely on EcoVadis’ expert intelligence and evidence-based ratings to manage risk and compliance, drive decarbonization, and improve the sustainability performance of their business and value chain. Its AI-powered risk mapping, actionable scorecards, benchmarks, carbon action tools, and insights guide a resilience and improvement journey for environmental, social and ethical practices across 200 industry categories and 175 countries.

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