When I started on my journey in sustainable procurement 16 or so years ago it was a new and burgeoning field that was not clearly understood. Those interested in adopting an approach seemed to focus very heavily on the carbon and climate change narrative.
In that period, we’ve had a credit crunch, recession, Brexit, and a pandemic. A lot to pack in over 16 years. Sustainability in business has evolved from something delivered by tree huggers, or flip flop bangle wearing lefties (as one client once told me) to something that is now seen as responsible business.
It has gone from just being about carbon and climate change, to developing further into social value, equality and diversity, labour exploitation, and the circular economy amongst a huge range of other things. While climate change rightly gets lots of publicity, there is a greater awareness that we need to be more sophisticated and understand that all sustainability impacts are interconnected and have a multiplier and positive feedback loop effect on each other.
Responsible and sustainable business is not possible without considering supply chain impacts. So, how well is this understood and is the term ‘sustainable procurement’ still relevant?
Sustainable procurement was first introduced as part of the Procurement Taskforce back in 2006 and looked specifically at how the public sector could use it’s procurement spend to drive real benefit in the supply chain and the economy.
Fast forward to 2022, and there have been numerous models and standards, flexible framework, BS8903, ISO 20400, and several other names given to the principles, ethical procurement, sustainable procurement, procurement with purpose, and responsible sourcing to name but a few.
Regardless of the badge or terminology, the underlying requirement is the same. Using your procurement spend to address environmental, social, and economic impacts that occur due to your demand. So how has thinking changed during my time in the discipline?
The following evolution diagram shows how businesses have been developing their journeys over the last few decades.
Most businesses start with a set of sustainability commitments that can be measured and reported by their own business. There is a real breadth of commitments from purely climate change related commitments to a more balanced sustainability approach including people, planet and profit.
Next up, businesses may then decide to include sustainable procurement and in most cases, this means looking at Tier 1 and the direct impacts. The main aspects of procurement will focus on the procurement process itself including the prequalification and tendering process. There may be some work around measuring the impacts and this is where we see the introduction of social value considerations and the increasing need to report procurement outcomes in this area such as carbon calculations, training, and apprentices etc.
The next stage though, is where I feel industry is going next and that is the sustainable supply chain. Don’t get me wrong this still involves procurement but in its wider sense. The scope starts to move to indirect impacts as well as direct and with increasing legislation for due diligence in the supply chain and the increase in ESG focus.
Businesses need to move further away from sustainable procurement being seen as a tick box and transactional activity to one that recognises that supply chains are living breathing entities that contribute to the welfare and success of the final product or service. This next step in the evolution sees the introduction of innovation, technology, collaboration and moves further away from purely contract terms and conditions as a mechanism to deliver success.
The final aspiration is that we see supply chains recognised as part of the wider value chain. This sees sustainability embedded in the heart of every product and service lifecycle.
Think about a sandwich, the customer, distributor, the producer, the supply chain, and connected investors will all have sustainability requirements woven through the production and delivery of this simple product
The key here is that the supply chain is not only concerned with the producers need – i.e. their direct client, but can help throughout the value chain by supporting with innovative ingredients, packaging and delivery options. The supply chain impact and the scope for procurement is woven through the heart of the sandwich value chain.
Whether you are at the beginning of your sustainable journey, just dipping your toes into procurement activity, starting to now think about supply chains or aspiring to have the sustainable value chain model, it is important to understand you need to give you and your business time and resource to evolve and understand that supply chains are key to success. So whatever label you give it, whatever standards you use, understand that when you now talk sustainability, supply chain impacts come with the territory.
Action sustainability can support you with your supply chain journey wherever you are on it.
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