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Category Management — The Ultimate Procurement Guide for 2024
- Integration of the planet, people, and profit pillars of sustainability into the procurement process.
- Environmentally-friendly acquisition of goods and services to meet daily operational needs, selecting suppliers meeting sustainable criteria to promote sustainable development.
- Reduction in energy consumption, waste reduction, lower carbon emissions, improved resource efficiency, protection of wildlife, restoration of biodiversity.
Sustainability in specifications allows businesses to ensure that they are following their sustainable requirements to achieve success in sustainability. However, what is it?
This article will tackle what sustainability means in procurement. Additionally, we will tell you the benefits of sustainable procurement in your business and how you can integrate sustainability into your specifications.
Once you are done reading this article, you will have a deeper insight into the specifications which will help you to clearly define your sustainability criteria. Thus, ensuring that all your suppliers and processes can meet your sustainability goals.
Defining Sustainability in Procurement
Sustainable procurement refers to the integration of the planet, people, and profit pillars of sustainability into the procurement process.
Basically, when we talk about sustainable procurement, it means the acquisition of goods and services in an environmentally-friendly manner to fulfill the needs of the company for its daily operation.
It involves selecting suppliers that meet the sustainable criteria or standards of your company, with the goal of promoting sustainable development and reducing negative environmental and social impacts.
Sustainability in procurement ensures that the sustainable values of a company are upheld throughout the product and service life cycle.
Furthermore, using new technology in sustainable procurement is crucial to achieving sustainability within your business operations. By integrating new technologies, the company can reduce its negative impacts and improve its procurement by automating some of its processes.
Benefits of Sustainable Procurement in Your Business
We cannot deny the fact that sustainability in procurement needs a huge amount of investment, especially when you are just starting your sustainable journey.
However, the benefits that you will gain are for the long term. Thus, it outweighs all the expenses you spend to achieve sustainability. Here are some of the benefits of sustainable procurement in your business.
1. Environmental benefits
- Reduction in Energy Consumption
- Reduction of waste
- Reduce carbon emissions
- Improve resource efficiency
- Limits the negative impacts of purchasing from non-certified sources
- Restoration of biodiversity
- Protection of wildlife
2. Social Benefits
- Spread awareness about climate change
- Eradicates child labor
- Equal treatment at work
- 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
- Ensures the security of the supply
- The total cost of ownership
- Compliance with environmental regulations
- Safe environment for workers
- Improve brand image
- Ensures business continuity
- Gain savings through efficient resource usage
- Demand management
- Minimize business risks
If you want to read more about the benefits of sustainable procurement, click here.
How to Integrate Sustainability in Specifications?
Sustainability specifications are the written requirements that lay out clear instructions in order for your project to meet its sustainable requirements successfully. Additionally, it helps ensure that your procurement processes are conducted responsibly, ethically, and sustainably.
Once you select your preferred sourcing strategy, you need to create your sustainability criteria. This choice should consider contractual agreements, such as the loss of a significant chunk of business or the inability to handle rising demands.
The most efficient way to ensure that sustainability risks are incorporated into procurement decision-making is to integrate sustainability features within these documents. It is best to align this with important internal stakeholders who can help you with practical and technical considerations.
The main goals and procurement strategies of the sustainable procurement strategy will serve as the basis for the sustainability specifications. The impact priorities will be addressed by the sustainability criteria, which will then translate into precise demands that will be forwarded to the suppliers.
The specifications should be objective and verifiable. They should be clearly defined without any risk of bias and should allow fair competition among the suppliers who will take part in the bidding.
Additionally, it must clearly outline the sustainability criteria that suppliers must meet as well as how their performance will be evaluated.
Specifications can be of two different types:
1. Mandatory Specifications
In this type, an offer will not be considered if the specified minimum requirements are not fulfilled.
For you to identify if there are enough suppliers in the market who can match the sustainable criteria, it is crucial to conduct extensive market research on the supply before making sustainable criteria.
Unless the requirement is an absolute necessity for the company, the danger of restricting competition and excluding qualified suppliers should be avoided.
2. Preferred or Desirable Specifications
Preferred or desirable specifications are used when there is a lack of assurance over how the market or suppliers will react to the sustainability standards.
Prior to establishing any preferred criteria, it is crucial to decide how suppliers who provide more sustainable alternatives or match the preferred criteria will be assessed because their proposals will be compared against one another.
In some circumstances, it is beneficial to request that suppliers offer products or services that are more sustainable than those included in the requirements as it will promote innovation.
This strategy should only be used if the organization is willing to consider other options. This strategy might also work better in situations with multi-stage procurement procedures.
You can decide which type of specifications are useful for your products. We will show you the various types of sustainability requirements that you can use in your specifications:
- Descriptive requirements – Specifies a characteristic of goods or services such as organic or sustainably managed wood.
- Performance requirements – Includes a definition of the way goods or services need to be delivered in order to optimize social and environmental impacts.
- Functional requirements – Defines the proposed function to be fulfilled by the goods or services such as the strength of concrete blocks.
In general, we recommend combining performance and functional criteria since they allow suppliers to suggest the most effective technological solution for the desired performance or function.
Do you want to learn more about sustainable specifications in procurement? Then try our Sustainable Procurement Course! Our course will guide you with all the techniques and tips on how you can foster sustainability in your procurement process. So what are you waiting for, enroll now!
This comprehensive article explores the concept of sustainability in specifications, providing insights into its meaning, benefits, and integration into procurement processes. It emphasizes the importance of clear sustainability criteria and specifications to ensure that businesses can effectively meet their sustainability goals and engage responsible suppliers.
What is sustainable procurement?
It means the acquisition of goods and services in an environmentally-friendly manner to fulfill the needs of the company for its daily operation.
What are sustainability specifications?
These are the written requirements that lay out clear instructions in order for your project to meet its sustainable requirements successfully.
Why are the specifications important?
Sustainable specifications are important as it helps ensure that your procurement processes are conducted responsibly, ethically, and sustainably.
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.