Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy
How Companies Can Benefit From Sustainable Procurement
Key take-aways
- Reduction of waste through sustainable practices.
- Shift towards renewable energy to reduce dependency on fossil fuels and lower carbon emissions.
- Enhanced resource efficiency by using recycled materials, contributing to reduced landfill waste.
Many businesses are shifting towards sustainability due to the perceived benefits when applied to the actual processes in procurement and supply chain. However, what are the benefits of sustainability?
In this article, we will discuss what sustainability means in business. We will tell you the benefits that you can gain from integrating sustainability within your business operations. Additionally, we will also discuss the challenges you may face when you start shifting towards sustainability.
Once you are done reading this article, you will grasp why many businesses are pushing towards sustainability due to the benefits you may gain by integrating it. Additionally, you will be able to know how you can adopt it while also being aware of the challenges you may face along the way.
Sustainability in the Business Landscape: What is it?
Many professionals nowadays often use the word sustainability. However, many just use the word without really knowing what it is. Sustainability refers to how businesses operate without having a negative impact on the environment, society, and the economy.
Business sustainability, also known as corporate sustainability, is the management and coordination of environmental, social, and economic demands.
The sustainability practices of businesses are commonly evaluated against the environmental, social, and governance metrics. Investments in ethical practices may initially cost a lot. However, it will lead to improved public relations, recruitment, branding, and increased profitability.
Right now, as many people are continuously demanding sustainability in every sector, businesses are seeing both pressure and opportunity in establishing their goals regarding sustainability.
Due to this, many businesses are now starting to integrate sustainability first within their procurement activities. This is due to the fact that procurement plays a huge role in the company as it entails acquiring goods that fulfill the company’s needs.
Sustainable Procurement Benefits
For you to easily grasp the benefits of sustainability, we have categorized it into three categories which are economic, environmental, and social benefits.
1. Environmental Benefits
One of the main benefits of adopting sustainability within your business operations is the reduction of waste. As sustainability entails the idea of “no waste” all the surpluses and leftovers can be used for another purpose.
Additionally, moving towards more renewable sources of energy reduces the dependency on using fossil fuels as well as helps reduce carbon emissions.
By using recycled materials made from waste, we can improve resource efficiency and help reduce the waste sent to landfills.
Other environmental benefits include:
- Reduction in Energy Consumption
- Limits the negative impacts of purchasing from non-certified sources
- Restoration of biodiversity
- Protection of wildlife
2. Social Benefits
For social benefits, the number one is working with suppliers who engage with communities to ensure a better life for all the people working for the supplier. Thus, this will have a ripple effect on many more lives.
Additionally, strict procurement requirements can help eradicate child labor and ensure that everyone is given equal treatment and a fair wage.
Other Social Benefits Include:
- Spread awareness about climate change
- Improves the well-being of people
- Enhances community engagement
- Eradicates unjust labor practices
- Pressures the market to be responsible for their actions
3. Economic Benefits
Businesses can increase their profits by adopting a total cost of ownership approach to life-cycle cost. Also, businesses can meet or exceed the requirements set by national or international laws if they operate responsibly.
Complying with environmental regulations and applicable laws is now becoming sustainably oriented. By adopting sustainability in business operations, the company can be ensured that its product is future-proof. Companies may incur penalties such as imprisonment for company officials if they refuse to comply with government requirements.
By adopting sustainability you can provide your workers with a safe environment. Thus, you reduce the risk of injury, absenteeism, and worker error which can cost your company greatly. For instance, a pest control company that uses pest control business management software to run the business will be more efficient with the distribution of its resources. This increases both employee and customer satisfaction, which improves the overall local business environment.
Sustainable procurement initiatives can also give you a competitive advantage as it improves the company’s reputation. Furthermore, the use of resources can lead to cost savings, lower environmental impacts, economies of scale, and improved return on investments.
Other Economic Benefits Include:
- Ensures the security of the supply
- Ensures business continuity
- Gain savings through efficient resource usage
- Demand management
- Minimize business risks
Challenges in Sustainability Faced by Companies
Here are some challenges in sustainability that companies may face.1. Supply Chain Transparency
It is only possible for your company to adopt sustainability if you have a transparent supply chain. Companies must show a detailed view of a product’s life cycle from the sourcing of raw materials and the delivery of their products. It is only possible to take significant action if you know where and when to start. One of the main sustainability issues that many businesses face today is the need for accurate, improved, and inclusive data as it describes and provides the company with where they are standing when it comes to its sustainable goals.2. Circular Economy
The circular economy is the key to solving almost all sustainability issues that many companies face today. Waste is becoming valuable, thanks to this economic principle as we can stop using virgin resources and adding pollution which can only be done by closing the loop. The circular economy principle aims to renew natural systems and reduce waste that contributes to pollution. Thus, companies must find a way to align their business objectives with this economic model.3. Collaboration
As the world is increasingly facing environmental challenges, it is important for companies to work together to ensure sustainability. We must know that we are all part of the same global community. Hence, our actions, big or small, can have a great impact on the world. Companies must develop strategies that will enable them to lessen their environmental impacts. We must take note that sustainability is a collective action for us to acquire positive change.Conclusion
Adopting sustainability in your business operations can give you lots of benefits. However, it is also normal that you will face a lot of challenges once you start striving for sustainability.
Sustainability necessitates systematic change. Thus, all the stakeholders in a company must agree to integrate sustainability to address sustainability issues that many industries are facing today.
If you want to know where and when to start adopting sustainability, then go no further. Our Sustainable Procurement Course will help you with everything about sustainability. Our course will teach you how to embrace sustainability while also maintaining high profitability for your business. So what are you waiting for, enroll now!
Frequentlyasked questions
What is business sustainability?
It is the management and coordination of environmental, social, and economic demands.
Why is sustainability important?
Sustainability is important to future-proof companies against risks regarding disruptions in the supply chain, depleting resources, and labor issues.
Why are many companies starting to embrace sustainability?
Companies are starting to embrace sustainability due to the perceived benefits that they can gain and the demand they are getting from the government and their customers.
About the author
My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.
