Many companies adopt corporate responsibility policies that within them take accountability for both understanding and managing the environmental impact of their business. Increasing levels of legislation and consumer awareness have made this move a necessity. Many companies, however, find developing an appropriate strategy to deliver on the “mission statement” complex and challenging.
Indeed, whilst many companies are keen to devise and pursue a strategy many fail to understand the key drivers and focus significantly within the business, without fully understanding the relationship between a successful environmental policy and an organizations supply chain. This failure to engage, particularly with procurement, can be a major barrier in achieving corporate responsibility targets.
The relationship between supply chain and the environmental footprint of the business is considerable. The UK National Health Service for example recognize that 60 percent of the total NHS carbon footprint is generated by procurement. (18% comes from travel and a further 22% comes from energy usage). Failure to engage procurement will make achieving environmental targets challenging if not impossible.
Once the relationship between procurement and corporate responsibility targets are well understood the staff managing the activity from the commodity managers to the buyers themselves need to become equipped with the right tools, information and processes to help deliver.
Commonly existing strategies and processes need to be overhauled – it’s not just enough to inform the buyer to “buy green”. Sustainable procurement policies must take account of social and environmental considerations ensuring they get as much visibility as cost and quality in the sourcing process. Cost concerns can become a significant stumbling block. It’s a misnomer to think that sustainable procurement means more expensive procurement. There are savings to be had whether at the time of the initial buy or throughout the products life-cycle.(e.g. storage and disposal costs).
Once an organization has decided upon its core environmental policies its imperative that the transactional team are appropriately equipped – whilst not an exhaustive list consider the following requirements:
• Policies and guidelines – these should describe how procurement functions in order to meet objectives.
• Training in standards and legislation
• Appropriate Performance measurement – deployment of key performance indicators coupled to objectives to measure progress.
• Effective material and supplier evaluation tools which includes environmental requirements as part of the decision making
• Suitable supplier contracts and agreements that encompass sustainability
• Communication to the existing supply chain of business expectations
• Commodity information such as catalogues or material specifications that facilitate the procurement of appropriate alternatives.
As organizations look for enablers to help them meet their broader strategies, sustainable procurement will become a key weapon. Buying green however is more than a mindset and requires both organizational change and suitable tools and skills. Industry is well equipped – standards such as BS EN ISO 14000, coupled with government think tanks, legislation and an increasing number of industry associations are providing the framework upon which to deliver on the promise all that’s required for business is to act.