6 key steps when implementing a sustainable purchasing strategy.

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??As pressure comes from increasingly competitive markets (with knowledgeable consumers) coupled with compliancy and legislative requirements many organizations are viewing corporate responsibility as an increasingly important aspect of their business. With sustainability being a key part of this framework organizations are looking to how they can implement “green buying” practices. For many organizations developing a mission statement is the easy part but putting it into practice can be daunting.

However as with any business change project getting the right approach can pay dividends. This guide looks at 6 key steps to consider when developing your sustainable purchasing plan.

1/ Get senior sponsorship – getting senior stakeholder support is crucial. You are much more likely to succeed if your senior management is supportive. This support should clearly articulate the importance of the project, its goals and timescales. This support must be visible (with senior executives seen to be directly involved) and communicated clearly to the organization. Senior support can add legitimacy to your project and assist in communicating its objectives and successes.

2/ Team up – your sustainability projects will need resources – you’ll need project managers and most likely a cross functional team. Consider your training needs at this point – does your in-house team have the knowledge required – will you need consultants or will you need to send your team for training. Ensure that the size and number of projects is suitable for your resource pool – don’t try and commit to something you don’t have sufficient resources for or you’ll most likely fail.

3/ Choose your targets carefully. Your organization will most likely have a set of related objectives or goals. You may wish to start with smaller projects in order to gain momentum that can be communicated back to the organization to gain credibility. Consider commodities or products that represent quick wins and where the environmental impact can be easily demonstrated. Ensure that as with any projects you utilize lessons learnt in order that you can re-invest this knowledge in future projects.

4/ Know where your starting from – as with any improvement projects its imperative that you have a baseline – your company has set objectives to improve but do you actually know your current environmental footprint? If not find out! This could be statistics around energy consumption, CO2 emissions, recycling rates or related costs. By knowing where you are you can set yourself meaningful and more importantly measurable targets.

5 – Communicate and engage – ensure you have a plan on how you will communicate your successes. Establish a plan that communicates how your team will delivery against the business strategy. Ensure that you regularly and simply explain your progress for example explain how environmentally friendly alternative products can support your strategy and save costs – look for things that engage your stakeholders and encourage participation.

6 Measure your success – Develop a set of KPI’s that help track the changes you are implementing. Collect appropriate data that can support your initiatives and assess the impact (cost savings or improving your environmental footprint). Don’t rely on subjective commentary use hard facts.

Is sustainability really being taken seriously by business?

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Whilst there has been an undoubted rise in the development and marketing of corporate social responsibility (CSR) many organizations could still be accused of developing and nurturing their staff without focus on how activities such as sustainability should be incorporated into day to day activities. This has the result of producing employees, whose only methods and skills are to succeed and capitalize on markets and make profit and to do so with little minimal focus on social and business responsibility. For example while many organizations may be able to quote their social/environmental mission statements how many executives can quote statistics and KPI performance relating to these strategies?

Corporate Social Responsibility however is playing an increasingly important role in many boardrooms. Many businesses are establishing corporate and social responsibility (including sustainability) strategies as measurable objectives within their corporate plans. These objectives are not self-contained but are typically promulgated throughout the organization within various disciplines from operations to sales through to supply chain.
Corporate responsibility becomes just that – everyones responsibility. The mounting awareness by external stakeholders (primarily shareholders, customers and more importantly those with legislative powers) regarding topics such as the impact of CO2 emissions, ethics and biodiversity are leading organizations to develop strategies that can help minimize their own impact and drive change in an attempt to resolve the issues at the heart of the concerns. Clearly many large organizations are beginning to take corporate responsibility seriously.

It does albeit, I believe, require a facilitator and competitiveness and compliance are two key ones.
But what of SME’s? How much are they contributing and are they too developing appropriate strategies. As with many initiatives the challenge for SME’s will be customer and compliancy based. Likely to be affected are:

  • Those supplying to markets where the customer is applying pressure for change through buying power
  • Or the customer/business utilizes sustainability criteria as part of their sourcing process and a failure to comply would result in lower revenues.
  • Those supplying products or services which may be affected by legislative controls.

For supply chain professionals whose companies are adopting corporate and social responsibilities rest assured supply chain and in particular procurement can and in most cases will be at the heart of this.
But is business really taking sustainability seriously or is it just a different approach to in the pursuit of improvements, which can be explained away as a social conscious?

For example consider that once targets are set and KPI’s established benefits can be measured and once improvements become realized, marketed within the marketplace and used for competitive advantage. Consider how CSR contains many issues from climate change, ethics, sustainability, bio-diversity etc etc. CSR could be explained as a catch all that enables organizations to switch easily from one consumer cause to another.

It could be argued that Social Responsibility can be explained away as merely doing good business, this is especially true where CSR compliancy can be a stopper to entering the market. In time supply chain improvements touted as being sustainable can be easily communicated as targeting, for example, biodiversity.
Another issue is the rationale behind such initiatives. For example cap & trade markets were launched some time ago to faciliate Co2 reduction. But It could be argued that carbon trading has resulted in just rewarding the heaviest polluters with carbon credits to match historic production

Initiatives like carbon trading do not initiate changes in processes or strategies indeed it could be argued that they sustain a “business as usual” approach.

One things for sure for near term future corporate responsibility will be increasingly present in most businesses and in most industries. Supply Chain teams will need to develop the policies, processes and measures in order to support the initiatives and demonstrate performance.

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