How to build a sustainable procurement strategy that works

A practical guide to building a sustainable procurement strategy, from identifying material priorities and setting objectives to engaging suppliers and measuring progress

Organisations are setting increasingly ambitious goals around carbon, social value, responsible sourcing, human rights and other sustainability issues. But setting an organisational target is one thing. Working out what it means for procurement teams, individual categories and suppliers is another. 

This is where a sustainable procurement strategy comes in. 

A good strategy connects an organisation’s wider sustainability objectives with the decisions procurement teams make every day. It identifies where procurement can have the greatest impact, sets clear priorities and provides a practical route for turning ambition into action. 

And procurement has considerable influence. UNEP estimates that public procurement alone accounts for 13-20% of GDP in many countries, representing around $9.5 trillion in annual global spending. Spend on that scale can change what whole markets make, and how they make it.

But influence alone doesn’t deliver results. A sustainable procurement strategy needs to show how that influence will be used. 

What is a sustainable procurement strategy? 

A sustainable procurement strategy is your plan for making environmental, social and economic issues count in the procurement decisions your organisation makes every day. 

ISO 20400, the international guidance standard for sustainable procurement, helps organisations integrate sustainability into procurement and align their approach with wider organisational goals. 

A strategy should go further than stating commitments. It needs to identify priority issues, establish objectives, embed them into procurement processes, define responsibilities, engage suppliers and measure progress. 

It’s also worth distinguishing between a sustainable procurement policy and strategy. A policy establishes principles and expectations. A strategy explains how those commitments will be put into practice. 

Why do you need a sustainable procurement strategy? 

Without a clear strategy, sustainable procurement can become a collection of disconnected activities. 

One team may focus on carbon, another on social value and another on modern slavery. Suppliers may receive different requirements from different parts of the organisation. Sustainability questions are added to tenders, but the information gathered isn’t always used to influence decisions or improve performance. 

A strategy brings these activities together. It helps procurement teams understand which issues matter most, where they should focus their time and how their work contributes to wider organisational objectives. 

It also provides greater clarity for suppliers and creates a route from sustainability commitments to measurable action. 

Step 1: Understand your organisation’s sustainability priorities 

Start with what the organisation is already trying to achieve. 

Review existing business and sustainability strategies alongside relevant commitments on issues such as: 

• net zero and carbon reduction 
• social value 
• human rights and modern slavery 
• equality and supplier diversity 
• circular economy and waste 
• nature and biodiversity 
• responsible sourcing 

Client expectations and relevant legislative or regulatory requirements should also be considered. 

The aim isn’t to copy these commitments into a procurement strategy. Instead, identify where procurement can meaningfully contribute. 

For example, a corporate net zero target may have significant implications for categories involving carbon-intensive materials, manufacturing or logistics. A social value objective may create opportunities through recruitment, local employment or supply chain diversity. 

Connecting organisational priorities with procurement activity gives teams a clearer idea of what they need to achieve. 

Step 2: Assess procurement impacts, risks and opportunities 

The next step is deciding where to focus. 

Not every sustainability issue is equally important across every procurement category. Applying identical requirements to construction, IT, catering and professional services is unlikely to produce useful results. 

A materiality assessment can help identify significant sustainability risks and opportunities across categories and subcategories. These might include carbon, waste and biodiversity alongside labour standards, employment, human rights and supplier diversity. 

Spend can form part of the assessment, but it shouldn’t be the only consideration. A relatively low-spend category may still present significant environmental, social or reputational risks. 

At Action Sustainability, we used this approach with the National Trust, reviewing procurement documentation, interviewing more than a dozen Director-level stakeholders and running workshops across four key category areas. The resulting materiality heatmaps identified sustainability priorities at category and subcategory level, giving teams a practical way to understand where action was most needed. 

Rather than trying to tackle everything, this allows procurement teams to concentrate resources where they can have the greatest impact. 

Step 3: Set clear sustainable procurement objectives 

Once priorities have been identified, translate them into clear objectives. 

Broad commitments such as “buy more sustainably” or “work with sustainable suppliers” give procurement teams little practical direction. 

Instead, connect organisational ambitions with specific procurement objectives and measures. For example: 

• Organisational priority: Reduce carbon emissions 
• Procurement objective: Reduce supply chain emissions within priority categories 
• Action: Introduce category-specific carbon requirements and supplier engagement 
• Measure: Establish a baseline and track reductions over the contract period 

The same process can be applied to circular economy, biodiversity, social value, human rights and supplier diversity. 

Objectives should reflect the risks and opportunities associated with individual categories rather than applying every target to every procurement exercise. 

Step 4: Embed sustainability into procurement processes 

This is where the strategy becomes part of everyday procurement. 

Sustainability should be considered throughout the procurement lifecycle rather than added as a questionnaire when a tender is about to go to market. 

Depending on the category, this could include: 

• challenging demand before buying 
• incorporating sustainability into category strategies 
• engaging suppliers before specifications are finalised 
• including relevant requirements in specifications 
• using sustainability criteria when evaluating bids 
• carrying commitments into contracts, KPIs and supplier reviews 

Timing matters. If sustainability is first considered at the tender stage, opportunities to reduce demand, consider alternative solutions or engage the market may already have been missed. 

Bringing sustainability into procurement earlier gives both buyers and suppliers more scope to identify practical solutions. 

Step 5: Bring suppliers into the strategy 

Suppliers will often play an important role in delivering sustainability objectives, but simply passing targets down the supply chain isn’t enough. 

Organisations need to understand supplier capability and communicate clear, consistent and proportionate expectations. 

Early market engagement can help procurement teams understand what suppliers can currently deliver, how quickly the market is developing and whether proposed requirements are realistic. It can also identify opportunities for innovation before the specification has been fixed. 

Once a contract begins, engagement should continue through performance reviews, improvement plans and collaborative initiatives where appropriate. 

The strategy therefore needs to consider not only what you expect suppliers to deliver, but how you will work with them to get there. 

Step 6: Build sustainable procurement capability internally 

A strategy will only work if the people responsible for implementing it know what to do. 

Procurement professionals don’t need to become experts in every area of sustainability. They do need to understand the organisation’s priorities, recognise when an issue is material and know where to find the right expertise. 

Support could include training, category-specific guidance, practical tools and templates, clear responsibilities and closer collaboration between procurement and sustainability teams. 

For example, our work with Siemens Mobility UK included evaluating procurement operations against ISO 20400 and considering client, legislative and regulatory requirements. This helped identify strengths and opportunities for improvement, which were translated into a practical action plan. 

Embedding sustainability into existing procurement processes and building internal capability helps make it part of business as usual rather than a separate exercise. 

Step 7: Measure performance and keep improving 

A sustainable procurement strategy should explain how progress will be measured. 

Start with an appropriate baseline. Without knowing where the organisation is now, it can be difficult to demonstrate improvement. 

It’s also useful to distinguish between activity and outcomes. 

The percentage of procurement staff trained, suppliers assessed or contracts containing sustainability criteria can show whether the strategy is being implemented. But these measures don’t necessarily show what has changed as a result. 

Outcome measures might include carbon reductions, waste avoided, improvements in working practices, jobs or apprenticeships created, increased spend with diverse suppliers or reductions in identified supply chain risks. 

Both types of measure can be useful, but the aim should be to connect procurement activity with the outcomes the organisation wants to achieve. 

Progress should also be reviewed regularly. Priorities, legislation, organisational goals and supplier capabilities change, and the strategy needs to evolve with them. 

Where does ISO 20400 fit into a sustainable procurement strategy? 

ISO 20400:2017 – Sustainable procurement – Guidance provides an internationally recognised framework for integrating sustainability into procurement. 

It covers principles including accountability, transparency, ethical behaviour and respect for human rights, as well as areas such as risk management and priority setting. It’s most useful as a benchmark: hold your current approach up against it and the gaps are hard to miss. 

ISO 20400 is a guidance standard rather than a certification standard. Its value lies in helping organisations structure and improve their approach, not in working towards a certificate. 

It also needs to be applied in context. A sustainable procurement strategy should reflect the organisation’s sector, priorities, supply chain and level of maturity rather than simply following a checklist. 

What makes a sustainable procurement strategy successful? 

There is no single strategy that will work for every organisation. 

The strongest approaches start with the organisation’s actual sustainability priorities, focus on material risks and opportunities and translate those priorities into practical procurement decisions. 

They also give people the capability to deliver them, establish clear expectations for suppliers and measure whether procurement activity is producing meaningful outcomes. 

Above all, a sustainable procurement strategy should be useful. It shouldn’t create another layer of process that sits alongside procurement. It should help people make better decisions and use the organisation’s purchasing influence where it can make the greatest difference. 

If you’re developing or reviewing your sustainable procurement strategy, get in touch with Action Sustainability to find out how we can help turn your priorities into practical action across procurement and your supply chain.