18 Must-Have Negotiation Skills For Procurement Professionals
Sustainable Procurement Operations — The Ultimate Guide
Sustainable procurement operations are the foundation of sustainability in procurement and supply chains. But how does it work and be implemented?
In this article, we will discuss how sustainability works in procurement. Additionally, we will show you the priority issues in sustainable procurement strategy.
After you finish reading this article, you will know the importance of knowing the implementation of sustainability in your procurement and supply chain processes. Furthermore, this will allow you to start drafting or creating your own sustainable procurement.
Sustainability in Procurement Defined
Sustainable procurement is the approach where it integrates environmental, governance, and social factors of corporate responsibility into the procurement process of a company. In simple terms, it uses processes that have the lowest social, economic, and environmental impact.
Sustainable purchases have more sustainability in the materials they are made from and have a low environmental impact than those procurement processes that have the normal procedures of purchasing materials.
While it is one step further in protecting the environment, many companies, especially small to medium size companies, are willing but not yet ready to employ sustainability in their supply chain as it costs a lot.
Furthermore, having a sustainable procurement saves you more money as it intends to reduce waste and use it to create new products.
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Sustainable Procurement Operations and How it Works
Sustainable procurement operations involve the normal procurement processes in which you will find a supplier to acquire your needed materials. However, the difference is that you will check the sustainability of the suppliers, materials, and processes in your procurement.
Sustainable procurement operations enable the company to find the best supplier that aligns with its corporate social responsibility objectives. Additionally, it allows companies to make their processes have a lower impact on the environment by reducing carbon emissions.
Sustainable procurement operations work from the beginning by identifying the materials you will need while also considering their environmental, social, and economic impacts.
In order to successfully streamline the process and align it with your company’s objectives, you must create a sustainable procurement policy. This will allow you to implement sustainability in your procurement and integrate your ESG goals and objectives within it.
The Three Pillars of Social Responsibility
We keep saying that we should align the environmental, social, and governance (ESG) goals to the procurement process. However, many of us do not know what this is
ESG is also called the three Ps of social responsibility which are the people, profit, and the planet. This highlights the core dimensions of a strong CSR policy and develops a more effective sustainable strategy.
1. The People Pillar
The people pillar covers all the issues that are associated with personnel management functions in an organization. When we talk about the people pillar, it focuses on three dimensions which are Corporate, Character, and Community.
The need to make an effective team with committed team members and harmonious relations is a requisite of a solid pillar.
Also, maximizing the contribution of each employee in the organization can be achieved through a rigorous HR policy.
You must take note that the people pillar will only be effective when it embraces the community in its sustainable vision. This ensures that the organization helps the local community where it is built.
2. The Profit Pillar
Of course, the profit pillar is always present when it comes to an organization that is built to gain profits. Just like the people pillar, it can be broken into three dimensions which are Sales, Service, and Strategy.
In order to generate a sustainable profit or income, it is crucial for an organization to have an effective sales stream, a service that generates genuine value for its customers, and a strategy to ensure the highest possible return.
3. The Planet Pillar
The role of organizations on the planet cannot be understated. Just like everyone else, organizations need to value our planet, especially those industries that have high carbon emissions.
The use of resources and the disposal of waste of organizations should be managed by these organizations to further protect the environment as the future generation will inherit it.
Six Priority Issues in Sustainable Procurement Strategy
The sustainable procurement strategy is developed to ensure that all staff involved in the acquisition of goods and services consider how they can enhance and protect the environment.
The sustainable procurement strategy lays out the six priority issues which are the following:
- Optimize the use of natural resources
- Efficiently manage wastes in the supply chain
- Effectively manage the delivery of goods and services
- Manage the carbon impact of an organization
- Collaborate with suppliers and departments to raise awareness of sustainability
- Ensure that the living wage and ethical considerations are followed
These issues are selected due to their significant contribution environmentally, socially, and economically to the stakeholders, vendors, and the local community.
+ What is sustainable procurement?
It is the approach where it integrates environmental, governance, and social factors of corporate responsibility into the procurement process of a company.
+ What are sustainable procurement operations?
This is the approach where the organization ensures the sustainability of the suppliers, materials, and procedures in the procurement process.
+ Why is a sustainable procurement strategy developed?
It is developed to ensure that all staff in an organization recognize their duties and responsibilities environmentally, socially, and economically.
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