One of the most frequent questions I get asked by clients is how to “sell” sustainable procurement to senior executives. My first instinct would be not to “sell”, but rather create a demand pull by encouraging your execs to think about the business issues. Here are a few tips.
Develop an understanding of what drives your organisation to be sustainable. For example:
Who are your shareholders and what are their policies on Environmental and Social Governance?
This is what city people call ‘sustainability’. If there is any doubt that institutional investors take this stuff seriously, take a look at BlackRock’s white paper.
Who are your customers and what are they asking for?
A simple internet search of your key customers and their sustainability policies should start to build evidence of customer-led sustainability objectives.
Are you really thinking about supply chain risks?
Any well-governed organisation will have a risk register and a risk management process. Some don’t consider carefully enough the risks that lie deep in the supply chain. It’s not only reputational risks, such as those experienced by many players in the retail sector, but also the risk related to disruption of your business fails as a result of something bad happening such as modern slavery or extreme weather events.
How much of your organisation’s revenue goes to your supply chain?
My guess is the figure will be between 40% to 80%. No matter how shiny your corporate responsibility policy and strategy is, you can’t deliver it without the contribution of your supply chain.
You need to know who your suppliers are, what are their strengths and weaknesses and how you need to develop the supply chain to meet your needs. This takes time. Springing a load of new requirements on your suppliers will likely push the price up. Predicting what you will require in the future will encourage them to compete around your requirements.
Sustainability should not cost you more, but bad procurement will. You need to align your supply chain to your sustainability goals in a strategic and prioritised way.
The international standard ISO 20400 helps you to do this and I commend the standard to you. You can find plenty of free resources on this standard on the not-for-profit website www.iso20400.org There are plenty of examples of sustainability objectives saving money, take a look at this one from Anglian Water.
These are but a few examples of drivers recommended by ISO 20400. A great way to engage in a conversation with senior executives is to conduct a ‘drivers exercise’.
Start with consideration of all the drivers highlighted by the standard and give them a score to indicate how strongly your organisation is driven by each of these. I have facilitated dozens of sessions like this with boards and executive management groups, they never fail to come up with something and the different perspectives around the table encourage your senior leadership to have a business led conversation about sustainability, possibly for the first time.
So, don’t try to sell your case by running around trying to make people feel guilty, align yourself with the business drivers and encourage your leaders to work it out for themselves, then congratulate them on their visionary leadership!
Shaun McCarthy is an independent advisor, author and speaker in the field of sustainable business policy and practice. He was awarded an OBE for services to sustainability and the London Olympics by Her Majesty the Queen in her 2013 birthday honours list.
Organisations deliver most of what they do through their supply chains. Shaun McCarthy OBE asks how do we procure for the greater good and really embed social value?Read Article