The Benefits of a Sustainable Procurement Policy

Operating sustainably is now no longer optional for organisations, but an essential part of doing business. Read on to discover the consequences of maintaining unsustainable practices, and why every business can benefit from having a strong sustainable procurement policy in place.

As discussions around climate change and sustainability gain momentum, there are increased expectations for companies to prove they are making meaningful change. Consumers, investors and even governments want to know what companies are doing to minimise their carbon footprints and ensure that their operations and supply chains leave minimal trace on the environment.

What is a Sustainable Procurement Policy?

A sustainable procurement policy puts sustainable, ethical business practices at the heart of the procurement process. It’s about ensuring that the goods, services and utilities your organisation procures and uses deliver benefits to society, the environment and your own organisation.

In practice, a sustainable procurement policy makes operating sustainably a prerequisite of doing business with your organisation. This ensures that the suppliers you choose meet your ESG standards and business ethics.

What are the Benefits of a Sustainable Procurement Policy?

The benefits of a sustainable procurement policy are multi-fold.

First, your organisation will directly benefit from sustainable procurement, in terms of reducing carbon emissions, cutting waste, lowering energy consumption and driving value.

Having a sustainable procurement policy also has a knock-on effect throughout the supply chain. It uses your buying power to leverage and drive behavioural change in your suppliers, encouraging organisations who want to do business with you to adopt more sustainable practices.

In addition, having a sustainable procurement policy is the only way to be a truly sustainable business – as 80%+ of an organisation’s carbon footprint comes from the supply chain. For organisations looking to achieve true Net Zero emissions, and for those who want to make credible claims about their sustainability, sustainable procurement is an essential part of the process.

Having a robust sustainable procurement policy in place can also protect your organisation from some of the key reputational and regulatory risks associated with unsustainable business practice. It will also help to ensure your business is ahead of the curve – putting you in a good position to adapt to changing ESG legislation.

Regulatory Risks of Unsustainable Practices

The direction of travel is clear. It seems inevitable that legally binding sustainability standards will soon be incorporated into global trade agreements, competition law, corporate finance, mergers and acquisitions and supply chain management.

Investing in a sustainable procurement policy now can help to ensure your business is in a strong position to react to strengthening regulations.

Harming Reputations with Unsustainable Supply Chains

Unsustainable supply chains are increasingly coming under scrutiny from conscious consumers.

Having an unsustainable supply chain is clear evidence that one or more areas of a business’s operations may not be prioritising  the planet. This can call into question the ethics and morals of all affiliated organisations who benefit from the partnership.

Having an unsustainable supply chain can cause substantial reputational harm on businesses who have made efforts to cultivate and portraying a sustainable image as it undermines their own efforts and dedication to a greener and sustainable future.

In addition to harming the individual businesses associated with unsustainable practices, this can also have a knock-on effect on entire industries – breeding cynicism amongst potential consumers about the sustainability of other organisations in the sector.

A sustainable procurement policy will significantly reduce the risk of this happening to your organisation.

Sustainability – Focusing on the supply chain

McKinsey says that 90% of companies’ impacts on the environment come from supply chains. This highlights the essential need to look beyond your own business operations, to the supply chain, if you really want to make meaningful change.

In addition to making your business greener, a sustainable supply chain can also cut costs, whilst improving its efficiency and ESG performance.

This safeguards your businesses future and ability to develop and grow, as the pledges made by governments towards Net Zero seem increasingly likely to hamper, or even prevent the growth of unsustainable businesses. Indeed – the pressure for businesses to cut carbon emissions and operate in environmentally-aware ways will only continue to grow.

In the green future set out by governments across the globe – there is no space for organisations who are not engaged with sustainability in a meaningful way.

Make Sustainable Change with Gateway 

Looking to improve your green credentials? Implement the right sustainable procurement programme and build a greener future with our support.

Using our specialist software, we can calculate your supply chain emissions, identify GHG hotspots – allowing your business to benefit from in-depth Scope 3 (Supply Chain) analysis on all your suppliers to gain complete visibility over your carbon footprint.

From implementing the ISO20400 standard and improving ESG credentials, through to finding a way to achieve Net Zero – we can help. Whatever industry you’re in, we will collaborate with you to identify your business’s needs and provide a bespoke procurement solution that will make you a greener, more sustainable organisation, while delivering real value.

To find out more, please get in touch today